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Maximize Your Channel Success with Effective Global Payment Systems
November 12, 2009Vaughn AustVP, Product Management
www.hawkeyechannel.com
Why cash payments? Partner perspective
Vendor perspective
Challenges of global payment systems Process Inconsistency
VAT/GST liability
Security
Bank account validation
One client’s success story
Making global payments work for your company
Agenda
2
AG
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“...Cash flow issues in the channel are coming up as a growing problem...
...for solution providers the trick to remaining solvent during the six to 12 more months it is going to take to see real improvement in the
market is going to revolve around cash flow and managing costs.”
Robert Faletra, ChannelWeb, July 2009
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© 2009 hawkeye, all rights reserved.
www.hawkeyechannel.com
Hawkeye Channel PracticeA
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Improvingthe Value of
Channel Relationships
Channel Strategy
Insight
Assessment
Best Practices
Channel Programs
Enablement
Performance
MeasurementChannel
Collaboration
Growth
Reach
Profitability
new!
www.partnerconduit.com
www.hawkeyechannel.com
Over a decade of success in the ChannelA
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1996 Cohesion, Inc. founded
1998 Hawkeye Group founded
2000 Hawkeye acquires Cohesion
2003 Hawkeye expands into Europe
2007 Hawkeye expands into Asia Pacific
hawkeye’s mission
To develop and execute innovative, technology-enhanced channel marketing strategies and programs that allow our clients to deliver incremental channel growth in terms of mindshare, channel solutions, and indirect sales.
www.hawkeyechannel.com
NA payment disbursement since 1996Global payment disbursement since 2005
Disbursement HistoryA
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…to EMEA:
$25.8MM
…within EMEA:
$76.5MM
…to Latin America: $1.3MM
…within North America:
$509MM
…to Asia Pacific:
$1.5MM
2009 = $775MM est.2008 = $614MM2007 = $450MM
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WHY CASH PAYMENTS?
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Partner Perspective
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Solution providers are focused on business critical processes in these challenging economic times and cash flow and on time payments are more important than ever before.
Partners want:
On time payments
Payments in their preferred currency
Consolidated payments for multiple programs
Clear visibility into benefits
Clear, consistent and understood process
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© 2009 hawkeye, all rights reserved.
www.hawkeyechannel.com
Vendor Perspective
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Vendors are focused on reducing costs and increasing partner satisfaction.
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© 2009 hawkeye, all rights reserved.
Program Managers & Operations Managers want:
Reduce/eliminate partner complaints
Focus on program success
Finance Directors want:
Focus on other finance functions
Global tax liability painlessly addressed
Cost efficient payment process
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CHALLENGES OF GLOBAL PAYMENT SYSTEMS
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Why are global payments so difficult?
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Many challenges with global payment systems can be traced to several factors:
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© 2009 hawkeye, all rights reserved.
1. Process inconsistency
2. VAT/GST tax liability
3. Security
4. Bank account validation
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Process Inconsistency
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Process Pain Points
Multiple programs, duplicated effort
Different sources of payment information
Different VAT/GST tax advice and resulting processes
Different methods of collecting bank account information
Front line support knowledge
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© 2009 hawkeye, all rights reserved.
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VAT/GST Tax Liability
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Hawkeye Disclaimer
We are not tax experts, but are simply pointing out best practices that we have implemented for global, fortune 100 technology clients
Global VAT/GST Tax liability
More than 130 countries have these taxes
Vary between 5% and 25%
Partners are required to invoice the Vendor for the value of the award
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© 2009 hawkeye, all rights reserved.
www.hawkeyechannel.com
Security
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List of security considerations that Vendors should consider (whether a third party vendor or “do it yourself”)
How is Partner personal information stored?
• Encryption, storage and retention policies, access
Partner account entry – beneficiary name
If third party,
• Are they SAS 70 certified?
• Are they GAAP compliant?
Vendor Bank Account
• Access – signature and authorization policy
• Batch control and auditing
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© 2009 hawkeye, all rights reserved.
www.hawkeyechannel.com
Bank Account Validation
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Bank Account Validation
Routing Methods are different
• SWIFT
• IBAN
• ABA
Upfront/Online versus Backend
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© 2009 hawkeye, all rights reserved.
www.hawkeyechannel.com
SUCCESS STORY
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The Situation
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The company had programs in over 100 countries and had been using regionalized vendors and internal, regionalized Accounting centers to process ~$1 billion in payments annually to over 8,000 partners.
The challenges for this company:
VAT/GST taxes
Inconsistent Process
• Across regions
• Across programs (both different and same regions)
• Same partner receiving different payments
High internal costs
Long payment lag times
Let’s look at how the company addressed each of these concerns.
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Global Payment Processing Needs
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The company was hoping that a single, global payment platform and process would help them with the following:
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© 2009 hawkeye, all rights reserved.
Reduce processing time
Reduce transaction costs
Ability to consolidate multiple payments
Robust administrative metrics
Reduce payment exceptions
Standardize payment communication to partners
Decrease Help Center volume
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VAT/GST Taxes
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Accounting firms process
Always pay VAT/GST to local governments and reclaim at the end of the year
Physical VAT/GST invoices
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© 2009 hawkeye, all rights reserved.
Why?
“Market Penetration Services” are a cross-border, non-taxable item in the supply chain
Electronic invoices are legally acceptable in many countries
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Process ConsistencyS
UC
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20© 2009 hawkeye, all rights reserved.
Payment Pending Notification Email
Bank Acct Info Collection & Real-
time Validation
Payment Confirmation
Dynamic Online Invoice or Invoice
instructions
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New Process Dynamic OptionsS
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21© 2009 hawkeye, all rights reserved.
After submitting or confirming bank details, dynamically display mailing instructions for a partner invoice or ask the partner to enter their invoice online, based on program and country. VAT was inclusive or exclusive, based on program and country.
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Process Transparency - Partner Global Benefit StatementS
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22© 2009 hawkeye, all rights reserved.
At-a-glance summary of all Pending and Paid benefits
Drill down for detailed transactions
Multiple currency and Multiple language enabled
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Where the Company/Vendor Cut CostsS
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23© 2009 hawkeye, all rights reserved.
COST
SAVINGS
Reduced Invoice Audit
DocumentManagement
Help DeskGlobal Payment
SystemGlobal Benefit
Statement
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Vendor Cost SavingsS
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24© 2009 hawkeye, all rights reserved.
Customer Service Savings
Delivery & Audit Savings
Management Savings
38%
67%
20%
Savings/Payment $26.13
30-Day Payment Delivery SLA ~40% 95%+
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Benefits of the New Payment System for Vendor
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Standardized, single global payment platform
Reduced payment cycle time
Predictable delivery of payments
Improved partner satisfaction
Consolidation of multiple payments
Reduced transaction costs
Centralized reporting and tracking
Consistent banking data collection
Intermediary banks enabled in payment process
Standardized payment communications
Online, consolidated reporting
Decreased Help Center volume
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Benefits of the New Payment System for Partners
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Consolidation of payments
Improved cash flow with faster payment
Provide bank details once
Strong communication
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© 2009 hawkeye, all rights reserved.
Managing fewer payments
Standardized, predictable cycle
Online tracking of payment process
Payments in local currency
Greatly improved partner
satisfaction!
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KEY POINTS/DISCUSSION
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Evangelizing and Building a Global Payment System
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Planning and implementing a global payment system can be a real challenge. These important points will get you started:
1. Obtain key stakeholder buy-in and sponsorship
2. Define and prioritize Global Payments as a project
• Centralize operations budget
3. Audit and question current tax-related processes
4. “Operationalize”
5. Start with pilot
6. Survey, measure and improve
7. Roll-out programs in batches
8. Reduce cost and increase partner sat
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Key Points
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These are key best practices for an effective global payment system:
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© 2009 hawkeye, all rights reserved.
1. Centralize
2. Standardize
3. Validate banking information upfront
4. Utilize electronic invoicing
5. Require partners to invoice for Market penetration services
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Questions, Discussion
30
KE
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© 2009 hawkeye, all rights reserved.
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Vaughn Aust www.hawkeyechannel.comVP, Product Managementvaust@hawkeyeww.com+1.425.902.5146
THANK YOU
© 2009 hawkeye, all rights reserved.