In FinTech's never-ending path to combating friction, B2B solution providers often take one of two approaches: design a holistic solution that allows a company to entirely replace an entire function with a single, streamlined tool, or design a solution that zeroes in on one particular point of friction that can seamlessly integrate into an organization's existing operations and systems.
When it comes to accounts payable, there is no shortage of FinTechs that have taken either one of these approaches in an effort to address the many pain points of the procure-to-pay cycle. From receiving invoices in the preferred format, to paying suppliers in the preferred rail and enabling both sides to reconcile the transaction, a lot of friction, errors and cybercrime plague AP departments today.
In essence, the invoice is a trigger to initiate payment, a viewpoint that leads many FinTechs to include payment functionality with their invoicing solutions, and vice versa. While the invoice and payment are undeniably linked, Eyal Feldman, Co-founder and CEO of Stampli, suggests that a different position on the invoice should perhaps be taken.
"What we are seeing is that large [corporate] customers, those that already have a financial team in-house and controllers, typically do not want to see payment connected to the way they manage their invoices," Feldman told PYMNTS in a recent interview. "Customers want the freedom to change the payment provider, and not be dependent on the same system."
Instead, he said, the invoice can be seen as a bridge of communication – both between buyer and supplier, and within the buy-side organization itself. From this angle, Stampli has designed an invoice processing solution to facilitate communication between key players in the transaction. That could mean between buyer and supplier, if a buyer has a question about a bill, or between the accounting department and the individual employee who made the purchase.
Invoices are a "collaborative tool," said Feldman, and a major point of friction with invoice management is a breakdown in communication. Addressing that pain point can make accounts payable processes much more efficient, he noted.
Investors agree, with SignalFire, Bloomberg Beta, Hillsven and UpWest Labs recently providing $6.7 million in Series A funding for the company, according to a blog post published last week. The funds will be used to focus on growing its employee base and investing in outreach so it can grow its solution, which uses artificial intelligence and machine learning to tackle problems like data entry and duplicate invoices.
The company designed Billy the Bot, a tool to automate invoice data entry into existing ERP and accounting systems, ingrained with machine learning capabilities that Feldman said can learn the "language" of an invoice that differs from supplier to supplier.
This technology, though, can manage other key issues with invoice processing, including fraud and duplicates.
"There are a lot of attacks into accounts payable – it is where the money flows out," he said, adding that Stampli's solution only enables invoices to be processed if the sender is already within a firm's ERP system. Proprietary algorithms can address risks of invoice fraud, as well as what Feldman said is the bigger issue of double invoices, providing professionals with a visual of the two documents the system has flagged as potential duplicates.
Data security is paramount in any aspect of the enterprise, but indeed, AP is a particular target for fraudsters. With this in mind, approaching the invoice as a means of communication both across and within enterprises can introduce the delicate balance of data sharing with data privacy.
According to Feldman, it is important that the appropriate personnel have the invoice information they need to do their jobs without error, yet it is just as important that professionals don't have more invoice data than is necessary.
"You need to be very careful," he said. "As much as we want to make it a communication tool, we need to respect the fact that not everybody is allowed to see everything that is inside this process."
FinTechs that approach B2B payments friction by narrowing their focus on one process – in this case, invoice management – amplifies the importance of data security. As these tools must be compatible with existing systems in the enterprise, they must facilitate the movement of data between platforms while ensuring that information doesn't fall into the wrong hands.
Indeed, while Stampli's solution is separate from the invoice payment process, the tool relies on its ability to integrate into existing accounting and ERP systems to facilitate the payment of that invoice, as well as for reconciliation, fraud mitigation and other purposes.
But Feldman noted that this approach enables the company to wield the invoice as a bridge between professionals to gain visibility into information that often lacks transparency, while having the flexibility to work with other solutions that corporations prefer to use. It's all about learning the language of the invoice, and using bot technology and machine learning to translate that language for business partners.
"There is a deep repository from which we can learn," Feldman said of the value of invoice data. "It's easy to translate the language of the vendor, to the language of our customers."