Basware CEO: 90% of Companies Can’t Pay a Supplier on Time

Nine months into his tenure at the helm of Basware as CEO, Jason Kurtz told Karen Webster the dynamics between buyers and suppliers are ripe for improvement.

CFOs grapple with suppliers’ requests for payments that come in across a dizzying array of different channels — paper invoices, PDFs, e-mails and even faxes. 

Suppliers, of course, want timely payment. But that’s no easy task given the buyers’ operational complexities, especially with multinational enterprises. On-premise and cloud-based technologies are hallmarks, and a pastiche of procurement systems crowd the back office.   

As a result, “90% of companies out there cannot pay a supplier on time,” said Kurtz, noting that the pain points are in place across all manner of industries and verticals. 

Overcoming the Inertia

And yet, a level of inertia continues to inject friction in the buyer/supplier relationships, said Kurtz.  

In a market saturated with AP automation providers, many executives have found that their invoicing, procurement and ERP upgrades and initiatives have drained time and money over the past several years. Those initiatives have not delivered the ROI that had originally been promised. In the present environment, as interest rates have soared, the cost of capital is high, remote workforces are the norm, and executives are re-examining how technology can help them collaborate with their suppliers.

Observed Kurtz, “a lot more treasurers and CFOs are interested in our products and solutions,” that streamline workflows and integrate the sending and receiving of data, documentation and buyer/supplier payments.  

There’s an added tailwind in the fact that new regulations in Europe mandate the electronic transmission of invoicing and payment data as soon as next year. Kurtz emphasized that Basware is seeing robust demand from enterprises for a single-source supplier in countries such as Spain, Poland and Germany where eInvoicing regulations are in place or are mandated to be in place over the next several months.  

The ability to improve cash flow and pay vendors on time, said Kurtz, can and will prove to be a strategic differentiator in B2B interactions. In many markets, supply chains are still constrained, even after the pandemic. He offered up a scenario where a supplier only has a limited stock of inventory on hand and will choose to sell those scarce units to the buyer who’s proven to be a good partner, forthcoming with speedy payments.

Where it Begins 

The improved buyer/supplier interactions, he told Webster, start with eInvoicing. Making it easier for suppliers to send invoices, for those invoices to be acted upon by the buyers — and to start the transaction process itself — improves the continuum of sending and receiving payments.  

“By ‘ingesting’ better,” he told Webster, of the invoicing process, “whether it’s paper or a PDF, that can automate and streamline the process and get you to much better efficiency and effectiveness. That’s a big theme, and a big friction that we work on.” The Basware Network, he added, also offers buyers a single point through which to connect with all of their suppliers, enabling those suppliers to receive purchase orders and send invoices electronically.

Integration of Paper and Processes

Data, of course, lies at the heart of it all, and, as Kurtz contended, the quality of that data is critical. In integrating paper and digital channels, he gave a few examples of how data and analytics can lead to better efficiencies within an organization. Basware, he said, through Basware Insights, helps client firms embrace touchless invoice processing, while SmartPDF invoice capturing service extracts data from PDFs and turns that data into eInvoices.

“We benchmark our customers and see where their points in the process that we should add automation, including the AI coding of invoices as they come in,” he said. 

“The data that we capture,” he continued, with a look ahead, “gives us the opportunity to keep on adding more services and capabilities.” 

He noted that payments represent a significant opportunity on the long-term roadmap, as Basware touches thousands of buyers, millions of suppliers and 180 million invoices, representing 500 million euros annually.

Consolidation on the Horizon 

The AP automation industry itself is ripe for change, too, said Kurtz. Simply put, it’s time for the ranks to be thinned. In every country, there are local players, and of course, there are bigger, multinational providers, too, and many enterprises buy AR offerings from one supplier, AP solutions from another vendor.

“There are too many players in the space right now,” he told Webster, “particularly in the enterprise segment, which is where we play. There’s got to be consolidation.”

In fact, he said, the market itself wants to see a single company on the scene that can deliver a continuum of services and offerings, spanning procurement AP and invoice and accounts receivable automation while adding payments into the mix.  

“We’re the best positioned to do that,” said Kurtz, “because that’s where we focus — and we have a head start in terms of the number of customers and volume….to become the 800-pound gorilla and consolidate the industry.”

Basware, for its part, will seek to acquire companies rooted in providing order-to-cash solutions. 

“That’s the future,” he told Webster, “and that’s what’s definitely coming.”

As he told Webster, “there’s more of a need for technology than ever before…and when you think about the [AP automation] space, it’s amazingly resilient — and it’s amazing how fast it’s growing, and how big the opportunity is.”