CFOs Seek Out-of-the Box Solutions to Invoicing Inefficiencies

OpenEnvoy CEO Matthew Tillman sees a familiar pattern among the finance leaders and teams his company serves. They’re all inundated by invoices their finance teams must reconcile manually, and internal process stopgaps don’t seem to be working.

“Usually by the time [a CFO] is looking at software vendors, they have a pretty serious pain point — at least one, if not many — that they’re trying to solve,” Tillman told PYMNTS’ Karen Webster in a recent interview.

Among other problems, they’re losing money due to paying duplicate invoices — sometimes amounting to millions of dollars. And turnover on their finance teams is a big problem: digital natives are intrigued by a job in finance but resistant to fingers scarred by paper cuts and the sheer boredom of staring at screens of invoices to be processed.

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The resulting frustrations are reframing the conversation around accounts payable and accounts receivable, Tillman said. Chief financial officers who would have been hesitant to embrace automation are facing more pressure than ever to contain costs. They’re starting to realize that investments in process efficiency now can yield big dividends later.

The market is shifting from “‘Can you do these things?’ to ‘How quickly can you do these things?’” Tillman said.

Haste Makes Waste

As Tillman sees it, tools from OpenEnvoy and other software vendors are gaining popularity because of a broader trend: relying on inefficient ramps in the “go-go” era when growth at all costs was in vogue. Now that the market has substituted net revenue as the primary metric for valuation, firms are pivoting to focus on quickly boosting margins.

According to Tillman, duplicate invoicing is a significant area for waste reduction, and it’s beyond the relatively simple task of identifying exact invoice dupes.

“That’s the tip of the iceberg for large corporations, because you would think that you’re able to catch the duplicate invoices because you spent so much money on whatever reconciliation package, and it turns out it’s just not working,” he said. “That’s because duplications aren’t just when the invoices are identical — that’s a fairly easy thing for a technical person to solve. It’s really about processing each line item.”

AP Speed is a Priority

In times of scarcity, companies feel pressured to pick up the payments pace. Historically, large manual outsourcing firms handled the auditing and reconciliation of line items against contracts. In today’s AP environment, that takes too long, Tillman said. Automation makes the process not only more efficient and effective but also faster.

In addition, growing via mergers and acquisitions presents a new set of complications. Incompatible processes and legacy enterprise resource planning platforms add to the inefficiency, and the burden of sorting it all out often falls on the CFO suite.

Better Cash Management

Tillman says automation gives companies better control of their cash as businesses look for ways to optimize liquidity and manage flows better.

“Solutions that are inherently preventative are going to offer a better return on investment than those that are based on claw-backs and legacy operational procedures,” he said.