Aravo Announces New Solution for Procurement Professionals to Eliminate Payment Errors, Reduce Off-Contract Spend, and Increase Corporate Cash on Hand
San Francisco, CA, April 27, 2010 – Aravo, the leading provider of on-demand Supplier Information Management (SIM) software and services, today announced the results of their recent research into the most popular supplier initiatives launched by Fortune 500 companies for 2010. The research found that the top three supplier initiatives year-to-date are (1) increasing electronic funds transfer (EFT) enablement; (2) eProcurement enablement; and (3) supplier risk assessments.
The primary driver behind the top supplier initiatives is to increase corporate cash on hand. According to Aravo’s analysis, more than 80% of supplier initiatives launched in the last quarter across the Aravo community of more than 1.5 million buyers and suppliers, focused on increasing cash flow. This analysis differed from a similar study conducted in 2009 in which supplier risk assessment topped the list.
To help companies optimize cash flow, Aravo also announced today the availability of Aravo SIM for AP Enablement. Fortune 500 companies miss out on billions in savings each year by simply not taking advantage of supplier incentives and discounts tied to early payment of invoices. Aravo’s AP Enablement solution allows procurement teams to realize these savings opportunities by ensuring that accurate contract information, payment terms, and remit-to addresses exist in enterprise AP systems. This, in turn, not only increases cash on hand, but also prevents supply disruptions due to missed supplier payments.
Aravo’s supplier initiative research was conducted between January 1 and March 31, 2010, and included analysis of an average of over 250,000 supplier interactions triggered each day across the Aravo community. Supplier interactions include workflows, data metrics and analytics that monitor, measure, and evaluate supplier performance. Interactions were evaluated across a wide range of industries, including financial services, healthcare, consumer packaged goods, pharmaceutical, aerospace, defense, energy, and retail. The findings support recent research by REL, a division of the Hackett Group, which found that the 1000 largest public companies in the U.S. could increase cash flow by an additional $709 billion by improving operational efficiencies across their supply chains through improved inventory management, on-time receivables/payment initiatives, and improved accounts payable management.
“The bold headlines may be gone, but most companies remain deeply concerned about cash practices. REL’s research found that 94% of survey respondents consider cash flow optimization to be important or very important, with multiple initiatives underway to improve a least one of the four most important cash-management areas: accounts receivable, accounts payable, spend management and inventory optimization,” said REL President Mark Tennant.
Aravo’s SIM for AP Enablement gives AP and procurement teams up-to-date and accurate payment terms, remit-to addresses, and banking account information when making payments to suppliers. This is achieved by synchronizing and continually updating supplier data between the vendor master or procurement system and the accounts payable system. The solution is delivered as a Software-as–a- Service (SaaS) application so customers need not worry about burdening their IT department with another enterprise application. The service is available now for $80,000 per year for a minimum two year commitment, and includes implementation, support and training.
“Aravo will be rolling out enhanced AP enablement solutions to a range of clients over the next few months, and we are seeing a clear focus on cash flow optimization across multiple industries,” said Tim Albinson, Aravo CEO. “Our customers tell us that an average of 20% of supplier spend is off-contract. The resulting economic losses are significant with many suppliers over-paid for off-contract transactions. Conversely, many reliable, on-contract suppliers aren’t getting paid because AP systems contain inaccurate, outdated information. By integrating AP systems with the Aravo SIM platform, companies can address both of these costly issues while improving their cash position and minimizing needless supplier disruptions.”
Aravo SIM for AP Enablement eliminates payment errors and ensures procurement teams spend on-contract by providing synchronized and continually updated supplier data between the AP system and vendor master or procurement system. Key features include:
- Continual supplier information updates
- Supplier information validation from trusted third party sources
- Approval of supplier information before entering into AP system
- Synchronization between AP and other systems that maintain supplier data.
The world’s best-run businesses utilize Aravo’s Cloud-based Supplier Lifecycle Management solutions and Supplier Risk Services to find and manage trading partner relationships, reduce supply chain risk, ensure global regulatory compliance and lower the cost of managing suppliers by up to 72%. Aravo launched the market’s first SIM/SLM solution in 2004 and has been the leading innovator in the space ever since. Customers such as General Electric, Accenture, and Boston University rely on Aravo to manage information and processes for over 2 million global suppliers. Aravo is based in San Francisco, with offices in Chicago, Dallas, New York, Portland, Monterrey, Mexico and Ahmedabad, India, and is backed by over $50 million in investment from Cisco Systems, Big Sky Partners, and others. For more information regarding Aravo’s award-winning solutions please visit our website at https://aravo.com.