Conduent has launched FastCap to assist organizations in improving their working capital. FastCap is offered as a managed service leveraging its subject matter expertise in accounts payable and procurement and applying a set of tools (both proprietary and third party). These tools research and analyze large data sets, including accounts payable (AP) invoices, procurement spend data, and contract data. The service is priced entirely on an outcome-based pricing model dependent on the improvement in working capital achieved.

Conduent’s FastCap service covers:

• Contract audits
• AP post-payment analysis and recovery
• Vendor statement solicitation
• Freight audits
• Spend forensics.

Extending Beyond Contract Audits to Accounts Payable Recoveries

Conduent has always had a strong contract analytics group focusing on legal contracts. The company has a tool, going back to Xerox days, that can handle millions of documents and search for keywords, etc., to identify key leakage areas. Conduent used the FastCap tool for one client to identify $8m in recoveries opportunities related to contract compliance.

Conduent is now leveraging that tool to data found in finance and accounting processes to look at contracts and invoices to identify erroneous payments, duplicate payments, open/unapplied supplier credits, contract/PO terms compliance, pricing errors, and missed discounts. FastCap uses 12 different algorithms to analyze AP data.

In addition, vendor statement reconciliation is another way of reducing the level of unreconciled items between organizations and their key suppliers, resulting in working capital improvements. Here, Conduent’s accounts payable audit teams analyze statements to identify credit recovery opportunities. This can involve combing through millions of records to validate statement credits and find the root causes of issues. The level of credits that companies can be owed can be huge, with their having little or no knowledge of this. Either the client or Conduent can handle the resulting discussions with the client’s key suppliers.

With freight audits, Conduent is leveraging a third-party tool to analyze and check freight statements from major carriers to find inappropriate billingsConduent has recently done this internally and estimates it has identified over a million dollars of savings.

FastCap is also used for procurement spend forensics. With spend forensics, Conduent personnel use the FastCap tool to analyze spend in targeted categories, typically in areas such as IT, facilities, and contingent labor and then provide recommendations and opportunities for quick wins. The client typically provides 1-2 years of spend data and enables Conduent SMEs to understand the buying process and systems used.

Achieving $20m in AP Recoveries

Conduent currently has eight clients using its FastCap solution. The strongest interest has been in the AP recovery audit solution. Conduent estimates that it has delivered over $20m in recoveries for clients to date. For one client, a mid-market organization, Conduent identified 210 duplicate payments to suppliers on an analysis of 12,567 transactions over an 8-month period, preventing duplicate payments of over $3.4m. There has also been some keen interest in the freight audit service, which is similar to an AP recovery audit in being low-hanging fruit.

Perhaps the most prominent of Conduent’s FastCap clients is an auto OEM, a longstanding major F&A client, that also uses Conduent for various procurement services. In its freight audit work for GM, Conduent was able to find erroneous payments that another provider missed during their audit.  Conduent also showed the client what changes could be made to prevent these from reoccurring by working with freight carriers to make sure they are more accurate in the future.

The FastCap Service Offers a 90-Day Timeline for Initial Recovery of Funds and Zero Up-Front Costs

The FastCap proposition is based on speed of recovery and outcome-based pricing, specifically:

• Speed and minimal disruption: Conduent offers a 90-day timeline from data collection and analysis to initial recovery of funds from suppliers
• Zero up-front costs: Conduent offers the FastCap solution with a managed services wrapper on 100% outcome-based pricing. The gainshare level on recognized savings differs slightly according to the service.

There is also a growing awareness by finance organizations that AP recovery audits can be useful not only for improving working capital but also for identifying system issues or process gaps. Conduent highlights that it can use FastCap for root cause analysis and then help clients put controls in place. Within BPS, the central value proposition has long moved from solely emphasizing efficiency improvements to helping clients develop more effective business processes; FastCap can clearly be useful here.

High Relevance to Major Multinational Manufacturers

So what type of organization should consider Conduent FastCap?

Clearly, FastCap is a no-brainer for Conduent’s existing F&A client base of around 45 accounts, both within finance and accounting and for wider contract and spend analysis.

However, Conduent FastCap also offers a quick return at zero risk to organizations that have retained their finance & accounting and procurement functions in-house, but lack the tools and expertise and desire to invest in areas such as AP recovery. This service offers a way of rapidly recovering an element of working capital while also identifying loopholes in current systems and processes without the need to adopt a full finance & accounting outsource. This particularly applies to large complex companies with many accounts payable or procurement transactions,

The AP recovery and freight audit offerings are especially likely to resonate for initial engagements.