The impact of automation on accounts payable and finance
Bankless Times is happy to be a media partner of SPARK19, where industry-leading organizations discussed how to achieve their goals by putting utility data to work. Organized by Urjanet, a global leader in utility data aggregation, the conference will take place again in 2020.
One of the keynote sessions was delivered by Michael Praeger, CEO of AvidXchange, a provider of accounts payable and on-demand invoice management solutions. Watch The Data That Fueled The Fire below.
Bankless Times also conducted an email interview with Mr. Praeger.
Provide me some background on AvidXchange, what were the formative experiences which led to its creation?
I’ve always had an entrepreneurial mindset. Early in my career in venture capital, I realized that if I could find a way to solve the daily challenges companies were facing by using technology to automate paper and labor-intensive business processes, I would be able to add great value and help accelerate their ability to grow. This thought ultimately led me to found two different software companies before landing on the idea that became AvidXchange, helping businesses to automate the accounts payable process and eliminate paper invoices and paper checks.
There are still many companies employing old, manual processes. Take me through a typical early conversation you have with such a company, their concerns and how you address them.
The main hesitation companies have when it comes to automating their accounts payable process is the fear of change, and the idea that automation means less control or eliminating long-standing AP traditions. Once we’re able to show businesses the impact of our technology and services, they realize we’re actually giving them more visibility and control than they had before while also helping to prevent fraud, which typically occurs with paper invoices and paper checks. While the conversation has evolved since fintech and cloud-based applications have become more prevalent, we still have a long road ahead when you consider that about 70 percent of SMB vendor payments are still being made via paper check.
When such a company signs on, do they have to communicate any changes to their suppliers and clients or does the technology take care of that on its own?
Once a company becomes an AvidXchange client, we aim to go live in 45 days with a standard implementation. The AvidXchange Customer Onboarding team supports our new customers and is equipped to make the transition as quick and smooth as possible. Following the initial onboarding, our Supplier Services team contacts vendors on behalf of the buyers, many of which are already a part of our 500,000+ supplier network and receiving payments directly from AvidXchange. We make sure suppliers are paid on time and in the method they prefer (including multiple electronic payment methods), and most importantly, ongoing support is readily available to customers with our dedicated team of +300 who are solely focused on supplier enablement.
Talk about how the recognition technology you employ to read invoices has improved. Discuss other key aspects of the technology and how they enable you to provide an exceptional solution.
As we have grown, so has our ability to manage the increased volume of invoices and achieve a touchless process through a combination of multiple technologies. The technology we use today looks significantly different than what was available in 2000 when AvidXchange was founded. From the initial receiving of an invoice to scanning, indexing and payment, each touchpoint is set in place to ensure accuracy, primarily relying on various forms of rapidly evolving Optical Character Recognition (OCR) technology and machine learning as the first foundational step to capture invoice information.
You employ integrations with more than 100 different accounting systems. What if any are the technological challenges of integrating different models?
We currently integrate with nearly 150 accounting systems. While a one size fits all solution would certainly be easier, each accounting system and the industry it’s built for is unique, so our approach to building a new integration varies, presenting its own set of challenges for our team to solve for. Whether it is a full API integration of the AvidXchange suite or any combination of our services, our tech team is dedicated to creating a seamless user experience. The type of integration is typically driven by the capabilities and availability of API access to the accounting system we are integrating with.
How are you working to improve the product moving forward? What are the biggest industry developments on the way that most excite you?
We are in a constant state of evaluation when it comes to our services. How can we make the customer experience even more positive and continually provide a greater impact on their business? Are we consistently addressing the needs of our customers and adapting appropriately so our products are intuitive and user friendly? Making changes based on customer feedback is key to our success and why we’re able to continue on the company’s rapid growth trajectory.
In terms of industry developments, the increased discussion around disruptive technologies and their impact on B2B fintech is a very exciting opportunity for us. We just published a new white paper discussing the future of fintech and how businesses are embracing innovations like artificial intelligence, big data and blockchain as more decision-makers recognize the potential benefits for their organization. The B2B payments market is predicted to reach $200T by 2028, so our area of opportunity only continues to grow as awareness around emerging fintech spreads.
Talk about your presentation at the Urjanet conference.
I had the opportunity to speak at the recent Urjanet SPARK conference in Atlanta to share how utility data has impacted our business, and how we’ve been able to provide that same benefit to our customers through AvidXchange Utility. Data has been our primary catalyst for innovation, and we’ve helped our customers better use their data to achieve sustainable growth. Partnering with Urjanet allows us to analyze intelligent utility insights that lead to heightened awareness of energy use, greater control over costs and overall energy usage stability. Utility Bill Analytics and Reporting (UBAR) also helps identify areas of over-usage, pinpoint gaps in efficiency and better forecast for the future. It’s not just about lowering costs, but also reducing time spent on the manual tasks associated with utility payments and making data-driven decisions.