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Quickbooks Users: How Automating Payables Saves Time & Money

Webinar Transcription

Henry: How automating payables saves time and money, what QuickBooks users need to know. Hello, my name is Henry Ijams and I’m the vice president of product management at AvidXchange in Charlotte, North Carolina. Prior to joining AvidXchange, I was a industry analyst and consultant, and I helped literally hundreds of companies their accounts payable process. Today I’m delighted to be joined by Lance Conrad, our director of business development for QuickBooks. Lance is a former QuickBooks business development leader with several years of financial management software and payments experience. Welcome, Lance.

Lance: Thank you, Henry.

Henry: All right. Over the next 30 minutes, we’re gonna tell you what we’re seeing happening in the marketplace related to QuickBooks and accounts payable and give you some sight about how you can go paper free in your finance operations. Along the way, we’re gonna show you how you can approve on the web, from mobile devices, including three case studies, and we’re gonna hear from you and we’re gonna hear some questions and answers. So we’ve left some time at the end to take your questions.

What do these three consumer products have to do with automating accounts payable? Well, here’s what we know. These three items are in decline. It may be a surprise to you, but bar soap, ground coffee, and alkaline batteries are disappearing from grocery shelves. Why? Because there’s a consumer shift. I think you can understand it when I talk about some of the themes. Bar soap is giving way to body wash, ground coffee, well, we all use Keurig now, K-cups becoming a household name. And well, whole bean coffee is pretty popular too. And well, with batteries we’ve got more mobile devices. So many Lance, I can’t plug them all into my nightstand charger.

The world is changing, and it’s changing in finance operations, too. As we know, checks are declining in business to business payments, but even more beyond that. We’ve got a new era of employees that are coming into our finance operation and what this means is well, the consumer world is changing pretty fast. There’s also some change in our operations, a bit… yes, a little bit more slowly.

But here’s the thing, changing your accounting system is not on the table. QuickBooks Enterprise, QuickBooks Desktop, are fabulous management accounting tools. Why would you wanna remove them when they do the good job really well? How can you enhance them? That’s what we really wanna think about today. And so for most of you, I believe the imperative is to find ways to make your business more nimble and take advantage of new opportunities, especially for attracting say younger workers without changing your accounting system. So Lance, can you tell us what it’s like today with the paper-based accounts payable process?

Lance: Sure Henry. These are really the steps that most QuickBooks users face on a day to days basis. They receive the invoice by mail. It could be 20 or 30 pieces of mail a day. They’ve got to open the mail, they’ve got to match it to a PO, and then they have to route it around the departments within their company to make sure that these invoices are approved. Once they’re approved, they’ve got to be coded, and then once they’re coded to the correct department, they run through finance and then are individually, believe it or not, entered into QuickBooks.

Once they hit the post at the GL, they’re ready for payment. Once they’re approved for payment, now another process has to happen. There is a printing of checks, there’s stuffing of checks, and there is the actual postage and mailing of checks. Then there is the stapling of the check, of a copy of an invoice, copy of the check, in a paper file ready for any type of vendor inquiry. Once a vendor comes in now usually the AP person has to go into that file and start a research project.

Henry: It doesn’t sound too friendly. Let’s talk about after AvidXchange and automation of accounts payables.

Lance: Well as you mentioned, Henry, QuickBooks is a fantastic financial management software platform. What we can do is we can enhance that by removing all the paper and have it fully integrated into QuickBooks. No longer do you have to worry about receiving mail, coding the invoice, going through approval process or routing the mail. Our process takes all of that out of your system. Yes, you’re still in control of how it’s coded, and we will hard wire that into our system, and it goes through the approval process. Once it passes through the budget, a full upload of all of those invoices now electronically appear in your bill center. No more loading it one at a time. You enter it into your GL and all you have to do is approve for checks. Once those checks are approved they go to us for payment, we reach out to your vendors, and we pay them either through check or electronic transfer.

Henry: Wow, sounds pretty revolutionary. Let’s talk about the benefits that we see from automating this bill pay inside of QuickBooks. We’re gonna talk about the top three benefits and, as I mentioned, we’re gonna have a couple of case studies to share, and I’m gonna give you some real live demo of how it actually works.

So after automating your AP process, here’s the core things you wanna think about. Yes, it’s paperless. You’re saving time and money. First we want to talk about streamlining your process. How about web based approval? Certainly, you can’t do that in QuickBooks today. How about improved insight into your data? Where are the invoices? Can you see the invoices that are sitting on an individual’s desk? What if that guy is out of the office? And they call accounts payable, “Hey, where is that payment? We haven’t received it yet.” These solutions give up to dated reporting, allowing you much better visibility even before the invoices are entered.

Then lastly here we’ll talk about fraud in just a moment and how to reduce fraud in accounts payable, and it’s growing. But the first key benefit of why most companies want to automate accounts payable is to reduce the operating cost. Let’s take a look. PayStream Advisors, the analyst firm that I have founded, we calculated that the average cost for invoice was nine dollars and this is from a survey that we did literally hundreds and hundreds of customers, most of them QuickBooks users. Why does it cost so much less, it seems almost unbelievable?

Lance: It’s surprising when we show this slide to our QuickBooks customers, how they agree with the costs. It does look like it’s just an enormous cost per invoice, but all understand all in, it’s a lot of manual process that drives their cost up. With our economies to scale we can bring that invoice cost down to $1.50, and even the payment we can bring down to 68 cents. Quite honestly you can’t even do that in an office and break even with the postage.

Henry: Right, but with the millions of payments that we’re processing every day, this is how we can do it. It’s $1.50 an invoice and 68 cents a payment. So the core question you might wanna ask is, well, what drives up that cost? And when we think about the cost, it’s the manual labor. It’s the pushing of the manual approvals, entering the bill, handling inquiries, making those payments. That adds up, for most finance organizations, 62% of the cost. My core question for you listening today is, what are you going to do to replace the team members who’re doing your manual process today when they leave? Number one, because you have an aging workforce who’ve been doing it the old way. The second one, how will you reallocate the team members once they’re not processing invoices? What are you gonna do with that extra time? Because, you know what, it adds up to four hours a day for pretty much more than half the time of what an accounts payable or a bill management specialist is doing. Lance, can you share a case from AvidXchange and what they benefited from moving forward with automation?

Lance: Brandywine is a great example. This company was a bit reluctant to come into the age of automation. They really didn’t understand how they could improve their process, but once they saw how easy it was to implement our products into QuickBooks and how much labor they saved and how easy it was to answer vendor questions when they asked when their payment was going to be made, where their process was in the cycle. They could easily go into our portal, bring that customer up, and understand exactly where that payment was or that invoice in their process.

Henry: Wow, and the CFO of Brandywine was super impressed. I know it was hard for him to move away from the manila folders that he was comfortable with. It was a really easy process. He thought, “Hey, I just come in once a week, I grab the manila folders and sign and review.” That fell apart when he traveled. That fell apart when he was at home and he needed to answer a question.

So today there’s four, I’m sorry, five ways that Avid invoices come into our system. Your invoices can come in via paper. What does that mean? AvidXchange maintains a post office box in two locations: Charlotte, North Carolina and in the west coast. Those post office boxes for all of our thousands of clients comes into our bill processing center where the paper is scanned and moved into our system where we extract and analyze the data.

AvidXchange indexers or coders do that work domestically here in the US. Nothing is offshore, Donald J. Trump is very happy. But in addition to that, you can scan the invoices locally and move them into the network, your suppliers can email them to Avid exchange. And most recently, suppliers can use the vendor portal to upload those invoices directly. The portal even goes further than invoice upload and allows the suppliers to view the invoice status and pay history when they wanna find out did they get paid. Along the way now we’re gonna give you some more details of actually how this works. Lance, can you walk through how we take that data that came into the AvidXchange system and import it inside of QuickBooks?

Lance: Yeah, for all those that are in QuickBooks each day, this is a very familiar screen. Normally, what an AP manager would do is enter these bills manually into the enter bills screen, but now all they need to do is go into the company tab, find AvidXchange, and then import those invoices via batch. So 30, 40, 50, 100, even up to as many as you like, there is no limit can be imported up into your bill screen ready for approval for payment in just a click of a mouse.

Henry: Wow, that’s pretty slick. So now that you’ve just gone paperless in AP. You’re the controller, you’re the CFO, what are you gonna do with that staff member’s time? And from Gary at Brandywine, he talked about improving sales margin. He talked about using this staff to work on projects that he couldn’t get to. One client had a team work on the lowest profitable customers, the bottom 10%, and do some analysis on how to improve pricing. It turns out after they raised the price 15%, they didn’t lose but two customers and generated an additional $100,000 a year.

That’s how you could… that’s power. Once you free up time, you’ll find ways to use them. What our clients really tell us that they love about this system is it provides them scalability to grow their business, and with this economy growing the way it is, lots of new business opportunities.

This automation that we’ve developed at AvidXchange means that you don’t need any IT resources to develop it on your end. There’s no hardware to buy and we’re gonna share with you how the mobile interface helps you make payment approvals. Of course, it’s 24/7, because this is a web based application so no matter where you are, when you’re working, you have access to the system.

And what our customers really tell us is it provides them three times more processing capacity with the existing staff that they have without having to add new people. That’s a lot of opportunity. So let’s take a look at what this actually looks like in the AvidXchange system. Lance, can you walk us through how this actually works?

Lance: So what you’re looking at here, Henry, is a view of what an approver would get. If you’re on an approver cycle to approve invoices, you would find in your inbox on your email a link that says “invoices are ready for your approval”. You hit that link and this is what you see. These are all the invoices that have been assigned to you for approval and you click in, let’s say to this top one, and you wanna see what that invoice is and you wanna get it ready for approval.

Henry: Okay, let’s take a look. So we’re now drilling in on this one. What am I looking at here?

Lance: What you’re looking at is a specific image of the invoice as well as all the header information. And by the way, this is what we do, we load this type of information into the left side of this view and we also scan an image into the view. So the approver can see line items, the approver can see pricing, and they can see the PLO that’s attached to it, to make to make sure that everything’s in place for approval. Once everything’s in place, then they just go to the top of the screen and hit approve.

Henry: Wow. So the left panel is the data that was extracted from the system by the staff at AvidXchange, and then you hit approve and you’re ready to go. That sounds like it’s just so simple.

Lance: It’s as easy as that.

Henry: Well, as we mentioned, this tool also allows you to use this on your mobile phone. So I’m gonna give you a little demo of how that actually works with a case study from one of our clients.

All right, so yes we talked about AvidXchange is in the cloud and it works anywhere, any time. Mike Cannon has a problem. Justin has just texted him to say that the materials for a job starting tomorrow have not been paid and he’s on credit hold. It’s 7:00, Mike is waiting in the stands of his son’s basketball game, and just when he starts thinking about shooting off a note to his finance manager, he realizes he can pull out his phone and log in to see what’s going on with this invoice.

Now Mike remembers the issue has to do with IHD supply placing him on credit hold due to several invoices being charged to the wrong department, Brookdale. The department has been changed, so it looks like Susan, it’s finance manager, is taking care of that. Now Mike wants to send a note to his VP, Bob, about this late invoice, and Bob has to approve this to get this done so they can get the materials delivered to the job site tomorrow.

Mike uses Siri on his Apple phone to message to Bob through the Avid invoice comment. He needs Bob to approve this. Okay? While he is in AvidXchange, he also wants to take a look at the invoices to verify that the freight amounts are correct. With inside this mobile portal you can look at the actual invoice. Mike looks up, his basketball game still hasn’t started, Lance, so while he’s still got some time he’ll take a look at some other pending invoices in his invoice queue. Good, this utility one is set up a payment. Their account previously had been shut off, so it was due to late payment, so he wants to make sure this one is all taken care of.

Everything is all set, Mike logs out, and well guess what? The basketball game has just started. It’s time now for our next case study. This one comes from the Wilton Companies, and here’s what we know. Over 90% of the paper invoices were being sent directly to the community and then stamped, signed for approval, and finally sent to corporate for payment. You can imagine the delays that that created, Lance, right?

Lance: Right.

Henry: Their early adoption of the Avid invoice enabled them to transition to an automated AP process long before most of their competitors, which for them, they tell us, created a competitive advantage. They were able to optimize this and able to process 10,000 invoices and growing very rapidly by nearly 50% in just 5 years. No longer drowning in their inefficient process. Wilton Companies moved to payment processing with Avid’s data.

So the last piece here is gonna talk about the payment side. What’s wrong with doing payments the way you’re doing it today? Well, you might not know much about check fraud, but we’re gonna to share some of what’s happening with check fraud. And guess what? It’s on the rise. Paper checks are really the giant source of check fraud. Lance, can you tell us why? You know a lot about this coming from Intuit.

Lance: At QuickBooks, the Intuit side, the biggest area for fraud was around the checks because you can easily manipulate checks, and also there is a lack of control around the paper use of checks. So a very opportunist way to bring fraud into the picture is through the check payment process.

Henry: Okay, so here’s an example. A small business accountant, Carol Maddox, was involved in a case recently where counterfeit checks were being drawn from one of her client’s accounts, complete with Maddox’s forged signature. Now there are other ways of doing fraud, some what you may have heard of called check washing, which means you change the dollar amount on a valid check by stealing the check out of the mailbox, changing the payee and the dollar amount.

These are surprisingly, well maybe not surprising in our day of fraud, they’re on the rise. So Carol had a new way of thinking about doing this, and it’s called moving electronic. Automation helps prevent fraud by eliminating the paper process, but also adhering on the business side, who signed this check? For a lot of our clients, there’s remote sites, and invoices can be approved and forged by an employee signature. Who actually approved it? Is that really Bob Smith’s signature, especially when he’s got that squiggly thing?

And every invoice now in the automated environment can be scrutinized even before it’s entered into QuickBooks using the AvidXchange workflow process. And even better, AvidXchange uses positive pay. Positive pay is where the dollar amount of the invoice is compared with what clears the bank with what the actual amount written. Checks are returned that have differing dollar amounts, so even if the check was washed and the payment amount was changed, it won’t pass muster with the bank because it will be rejected. We share that information with the clearing bank. So let’s summarize. You have a way to graduate to a paperless process and Lance, I think you can share how this actually works. How do we migrate electronically to Avid Pay?

Lance: Through QuickBooks. So what you’re looking at right now is really the pay screen. This is where all the bills have come up and are ready for pay. So as a QuickBooks user, now you go into this list and you approve these for pay. Instead of now going to the check writing piece of the QuickBooks functionality, what you do is you go back into the company file, find AvidXchange, and export this file into your Avid Pay portal, and then automatically we will reach out to your vendors and pay these vendors by check and/or electronic payment.

Henry: Cool. Even more, the portal allows you to search for any vendor, give you full invoice visibility on the payment, and even the image of the check item that you can see on the Avid Payroll. So here’s how it’s summarized, what Lance just said. You send the client payment file to AvidXchange, we determine what suppliers are already in our network… by the way, we’ve got 360,000 and growing by 1,000 a week at least. If they’re in our network, we pay them electronically through the payment method that they’ve selected, and if they’re not in our network we either enroll them or mail them out a check. We never hold on to a check, it goes out same day if they’re already not enrolled.

So, recapping. Do we wanna go back to the old way, Lance? I’m gonna pull out my Mr. Coffee and we’re going to buy some ground coffee and then we’re gonna get some bar soap and alkaline batteries. Or do we really wanna move forward with a paperless AP? You can see the benefit here. Hopefully, you’ve given some consideration to what this means to move 100% electronically, with 100% data capture, enhancing the workflow, passing this automatically into your QuickBooks with no manual data entry, freeing up all this time in your system. And so, it’s time now for your questions. And Brittany, can you tell us what questions have come in while we’ve been presenting to today’s session?

Brittany: Yes, we’ve had quite a few questions come in. The first question was asked by Alan, and he wants to know long AvidXchange has been in business.

Henry: Oh, it’s a great question. Of course, we’re ready for that kind of question. We don’t like to advertise too much, but as you can see, as I mentioned, we’re up to now 360,000 suppliers, we’ve got 6,000 customers. AvidXchange is not a small company. We have almost 900 employees, all of them in the US.

And what we’re really able to do here is bring together all of the software and tools in a combined solution. It’s not just software, it’s not just the integration of your QuickBooks, but it’s the team behind you that manages both the invoice capture process and the payment process of how we engage your suppliers. Along the way, 120 different accounting integration, you can’t fool us. If you don’t have QuickBooks or you have some flavor of QuickBooks you don’t think… we’ve seen them all, you can’t fool us. What’s the next question?

Brittany: Okay, thank you. The next question is from Jim, and Jim says that during the demo you talked about managing purchase orders and wanted to know if you could talk a little bit more about how that works.

Henry: Okay, excellent. Well, Lance, do we handle purchase orders?

Lance: Absolutely. We have a two-way match within our system, so if you use our purchase order system, it will go through the matching approval process along with the invoice.

Henry: Excellent. In this example you can see, they’ve got the PO number and then you can drill in on the PO number to look at the PO line. What’s the next question?

Brittany: Next question is from Tamara, and Tamara asks, “What tracking do I have for the payments made and tracking process?”

Henry: Okay, I think I have a slide on this one which talks about… Yeah, you can see the workflow that happens. This is the workflow screen, you can see actually how the invoice was routed. And on this slide, you get a detailed history of what happened with the invoice and the approval process.

We also have a pay screen that gives you full visibility of all your payments, both historical and upcoming, so you can see what payments are pending and what payments have already been made. That pay history is also part of the AvidXchange supplier portal, which means that suppliers can log in, see all of their pay history, pay dates, and how they were paid in our system. It also allows them to download remittance details if they wanna post it directly to their accounting system.

Brittany: Great. Thank you, Henry. And the next question is from Paul, and it’s asking, “Its financial review season and auditors are coming in next month. How can automation support that audit process?”

Henry: Well, one thing that auditors really love is that it’s really hard to manage the auditing of paper invoices, and they have something called accrual. I know all the accountants on the phone know about that. One of my clients had so many invoices, you know how they measured the accrual? They got out a ruler and measured how tall the stack of invoices was. And it turns out they were actually pretty accurate when they did it because it turns out it’s something like $10,000 an inch. Isn’t that funny?

But what they love about AvidXchange is you give them access to a read-only visibility. They can run reports and look at all the approval steps and drill in and have 100% visibility to all the invoices including looking at individual invoice images, all online. Speaking of images, you have the ability to download images from the AvidXchange portal and save them onto your hard drive for your own needs and purposes.

Well, that’s the end of our session. We don’t have any time for more questions. However, we are always open for questions at AvidXchange. Please reach out through our channels that you registered through this webinar and come back too and view another AvidXchange webinar to learn about how we can automate your accounts payable and payment processes. From Charlotte, North Carolina, this is Henry Ijams.

Lance: Lance Conrad.

Henry: And we look forward to seeing you at a future event.

Interested in learning more from an AP Automation expert?
Hosted By:
Lance Conrad
Quickbooks Director of Business Development at AvidXchange