Need an AP ally?
  • Using this to pass one unique identifier from all demo forms. Helps us wrangle the ways a demo can happen in tag manager/GA.
  • This field is for validation purposes and should be left unchanged.

Trends in Purchase-to-Pay for Non-Profit – Expanding Your Role as a Financial Strategist

Webinar Transcription

Britt: We are on Trends in Purchase to Pay – Expanding Your Role in Non-Profit as a Financial Strategist. My name’s Britt Davey and I’m the marketing program’s coordinator for AvidXchange. I’ll be the organizer for today’s event. Today we’re hosting the webinar with The NonProfit Times. There’s a little bit of technical glitches on their end, though, so I’m gonna be starting the webinar off. If you have any questions during this webinar, feel free to ask them in the questions box on the right-hand side of your screen. And after the webinar, we’re gonna send you our eBook on 4 AP automation success stories from nonprofit professionals, and we’ll also be sending out the recording and the slides for the webinar tomorrow. And now I would like to present our speaker for today, the VP of Supplier Solutions at AvidXchange, Henry Ijams.

Henry: Well, thank you very much, Britt. It is a pleasure to be with you because today I’m gonna try to empower you to become financial change agents at your nonprofit. We’re all in the business of raising and putting all of that money that we use in our organizations to the best use. Today I’m gonna try and give you some best tips and tricks about how you can be more financial responsible and better stewards of the money that you are using. And I do want to hear from you and I do want your dialogue.

Britt: Henry, we’re getting a little feedback on your phone.

Henry: Yeah, I want you to see if we can mute John. There we go. I am going to ask you to ask me questions during the session. I love questions. We’re gonna take some of them during the session. We’ll take some of them after. To do that, you go to your Control Panel in the Questions tab and unclick it and you type in your question in that tab. To let me know that you can hear my voice and are ready to start today’s session, I want you to type in the word “Go” in the Questions tab. So go and find that Questions tab, look for the little twisty and type in the word “Go”. I see them coming in now. You guys are excellent, you can hear my voice, and we’re ready to begin.

Okay, so as Britt mentioned afterwards, we’re really excited to be sharing our 4 AP automation success stories for non-profit professionals, and we’re recording this session so you can share with your colleague after this session. My name is Henry Ijams, I’m the Vice President of Solution at AvidXchange, and you’re gonna learn a little bit more about us. I have also been in another world and recently have joined AvidXchange. Prior to my job at AvidXchange, for 15 years I was at Purchase to Pay, Accounts Payable and payment automation consultant and analyst for PayStream Advisors. So I’m speaking just today for a lot of my extensive experience working with nonprofits in many different kind of sectors from health care, to higher education, to charitable, to the American Red Cross, to the small, to the large. So I’m gonna be trying to share some best practices that I’ve seen in those organizations as a lens to help you think about how you are gonna guide your world forward.

So who is AvidXchange? This is our advertisement part, but it’s really quick. Sixteen year history, lots and lots of customers, and probably what you need to know best is that AvidXchange helps organizations automate Accounts Payable without having to do the paper pushing or the manual processing anymore. And that is so strategic in moving forward with getting your finance operations and your procurement operations more automated that it’s the topic of our session today. AvidXchange is a very sophisticated fast-growing business and a lot of our customer focus is specifically focused on helping nonprofits. So we’re gonna talk a little bit more about that in a bit.

So the Avid story is pretty interesting because originally the company started to help organizations automate procurement operations. But we found out that what our customers really wanted is the controllers wanted us to help their organizations automate their Accounts Payable operations. And so it’s so much pain around the paper, of approving and processing manual invoices that get lost in divisions and desks. And we are one of the most successful companies in the history of iTech. And we’re on the Inc. 5000. We’ll do nearly double our growth this year because customers are jumping on our platform that does two really important things for you, automate the invoicing process, automate the payment process of how you pay your suppliers. And this is what the main story is today. This is what the most innovative controllers, Accounts Payable, and CFOs of nonprofits are looking for.

Today we’re gonna be talking about the trends in AP. I’m gonna be giving you quick ideas on how to optimize and bring in these best practices into your organization, and really I want you to leave you with five tips for a successful career. I hope that all of you will stay in your organization that you’re at today, but here’s what I know. We are a career-switching world and you’re likely gonna have many different employers in your job and in your career, so I want to equip you with personal tools, not just give you ideas of how to fix the organization you’re in, but to become a lifelong change agent. Sounds fun? I see some questions here. Keep them coming.

All right, so here’s what we know about the trends and the changes in AP. Here are the things I want you to think about. Who are the stakeholders you serve in your organization? What are you doing to simplify your Accounts Payable process, where do you stand on the path to innovation, and how are you personally preparing for these coming changes? So let’s dig into these and what they mean for you.

So what does your world look like? Is it the finance office, is it the back office? If I asked you about your day when you get home tonight after a long day at the office and I said what do you do, who do you serve, you might say, “Yeah, I work in accounting, I work in procurement, I work in operations.” But I want you to think more broadly about that today. I want you to think that your job is to solve Accounts Payable problems for everyone in your company. AP is not just a function inside of our central office. AP touches most of our employees that buy stuff. And even more important to that, it touches our managers who drive our businesses, who run our operations, and so we should be supporting them. This is what the innovators have figured out. And so rather than thinking about our job as solving the invoice problem, and getting invoices posted, and getting the accounting right, I want you to think about the future of what it could look like. And here’s what’s really fun about this. The today’s best practices is empowered by automation in technology, and when we think about this path to perfection, specifically about nonprofits, many of you probably feel like you’ve fallen behind.

Bigger companies or more sophisticated organizations, the for-profit world, they always seem to have budgets to do stuff and we don’t have budget to do things. That’s about to change for your world because of companies like AvidXchange, and we’re not the only one. In fact, I want you to go out and look at other service providers in this space because I want you to realize that doing things the way you’ve been doing them internally and thinking internally would be like saying, “I’m never gonna buy anything from Amazon,” and ignoring what’s happened in the last 10 years. You said, yeah, we can buy books online, we can buy stuff online, and guess what? Many times it’s cheaper, better, and faster than the way we used to do it. So why would I ignore innovation?

So I created this three-step model after serving literally thousands of companies and benchmarking many, many, many organizations over 15 years and bucketing them into three buckets: Novice, Mainstream, and Innovators. A lot of my non-profit clients felt that they were novices. Here’s what it means to be an innovator. An innovator has a high degree of electronic processing and a low degree of manual effort. Mainstream companies have scanned invoices, sometimes the back end. Sometimes they have electronic pain but that’s not majority. And here’s what’s different about the mainstreamers. They haven’t gotten to the majority electronic processing in anything that they do. The innovators have not only gotten to the majority electronic, but in the rare example, the innovators have 90% electronic invoices and more than 80% electronic payments. And that means that they typically eliminated extra work, not only in Accounts Payable in accounting, but throughout the organization so that people don’t think of AP as kind of a bottleneck or a pain anymore. And so the basic automation strategy today that mainstreamers follow is if you have a decentralized division company, the only way to pass a specialization is to centralize that process because you want consistency.

The next piece in that strategy is the digitization. How are you gonna digitize your invoices, electronically? And for many of you, that means scanning the mailed in invoices or allowing invoices to come in electronically via email that could then be moved around your organization either via email or via electronic methods so that you could streamline your approval process. Getting the invoices may not be the pain for you, but getting them to Accounts Payable and getting them approved properly may be the pain.

So as you think about your division, your department, where would they say they have pain? The innovators don’t think of just the pain in AP. They think about the pain holistically for the people who do the work in our organization because these are our customers. And that was really related to who are the stakeholders that you serve? Your internal stakeholders are your customers, the people that are delivering the services for your non-profit.

And the last piece in a basic strategy is that you have a plan related to moving electronically your suppliers. And there’s a number of reasons for that. And one of them is pretty neat, is it gets them interested in doing business with you electronically. If you pay them electronically, what we’ve learned at AvidXchange, is that they’re three times more likely to give you an invoice electronically. How about that?

So don’t bite the hand that feeds you. Give them what they want. They want electronic payments, then they’ll give you what you want, electronic invoices, which, don’t let me get too confused with all this electronic processing, it could be just email your invoices into me. But email them into you means that they’re going to be digitized so that no one in the organization has to key them anymore. In this day and age, what we can tell you is that the mainstream organizations have realized that data entry inside of an Accounts Payable organization doesn’t make any sense. And I’m gonna show you of why in a bit.

So the basic automation strategies we talked about, use third party manage your invoice receipt process. Whether it’s by electronic scanning or electronic invoicing through a portal, use optical character recognition technology or electronic invoicing to manage that invoice processing, automate the approval workflow so that it flows through organization without anybody having to touch it. It automatically reminds a busy manager, “Hey, you need to approve this invoice. It’s been sitting on your desk for a week or two.”

And the last piece here, electronic payments via ACH or Card. And the benefits that the mainstreamers and the innovators pick up here, savings obviously, and more supplier on-time payment which means more satisfied suppliers which means when you called the supplier and say, “Hey, Mr. Supplier, we need service on our business,” they remember you and they’re gonna serve you first. Now, I’d like to, at this point, paint the picture between the novices of visual. My customers usually love visuals.

It’s grilling time in the Carolina, where I live. It’s back to school and we’re doing football. We’re doing tailgate. Are you gonna be tailgating this weekend? I hope so, a little cornhole, a little playing outside. So which grill do you want? Do you want this old Weber on the left here or do you want the optimized strategy? The optimized payment strategy is more flavors than you’re offering today. If you’re a small business, traditional nonprofit, you’re mailing out a bunch of checks, you’re manually signing them, you’re doing some ACH and a little bit of wire. The optimized payment strategy can use the cards, virtual cards, purchasing cards, and early payment discounting as well as the aggressive use of getting your on your ACH program.

But here’s what we know. The organizations that are trying to do this on their own generally hit about 20% e-payment adoption. There is an avid exchange. Our adoption of e-payments is more than 50%. So we’ve defined this into a simple optimized payment strategy. What is it? Lowest cost, improves the needs of suppliers, and it provides you some benefit. What’s the yield for you? Here’s the cool thing. At AvidXchange, we’re sharing that benefit yield with about 40% or 50% of our customers. In other words, organizations like you are getting a benefit from moving electronically with your suppliers. In the cost of lowering your cost of managing the invoice process and/or some kind of a shared incentive with you, our customer, based on the yields that we generate by converting to electronic payment.

And so there’s three steps we go through to do that. The first thing is you evaluate your overall payment mix. Figure out the gap of where you are today. Let’s say 25% of your invoices are being paid electronically. And if I told you you could get this 50%, what would that yield?

And the last piece, execute a plan to close this opportunity gap. So whether you do that with AvidXchange or someone else, what I’m getting at is if you’re doing 20% or 10% electronically, you’ve got a lot of way to go, huge way to go. So what are you gonna do? Okay, so when we think more broadly here about purchase to pay, Accounts Payable automation is being moved too, and this is what we’re learning from the innovators through purchase to pay. You’ve probably heard that term but weren’t quite sure what that meant at your organization.

It changes our thinking from thinking about when the AP invoice comes in to thinking about a purchase begins when someone wants to buy something, what we call the purchase request, because at that time we want to capture their accounting codes, their project codes, and get the purchase approved so that we can begin an electronic approval and so that when the invoice comes in, all we need to do is match against the electronic approval, and that way we don’t need to bother our approvers at that moment. So what we’re kind of doing is flipping the model, and I’m gonna use the Amazon model again, when I go to Amazon it’s not like a go to Amazon and buy the book and then it comes, I get the invoice and I pay. No. When I go to Amazon, I set up my payment so when they ship the book it fills me.

Now, in AvidXchange, we have the ability to do that. Your buyer wants to buy something. It gets approved by the approver. When the invoice comes in, we ask the approver, “Did you receive the book?” We make the electronic payment. You see how we flipped it?

Here’s why it’s so important. Your customer, the manager in your division or the department, he wants to put in the accounting strain when it’s most important to him, when he wants to buy something. The invoice comes after the fact. He got the goods. Twenty days later he gets this invoice, is like, oh yeah, did we get that? I forgot about that. It’s not important anymore. It’s important to them before they buy. It’s much easier to get them to complete the accounting. And so today, empowering you for this transformation, means that we’re gonna transform you into a financial strategist.

If I think about the difference between finance and accounting, I want you to become the future-looking individual and fundamentally finance is a forward-looking organization and a forward-looking process that does forecasting, budgeting. And, frankly, CFOs that we talk to and CFOs that we surveyed, this is what they value much more than just accounting, because accounting is backward-looking, but finance is budgetary and forward-looking. So the strategist, where I want to see each of you, is to become a finance strategist, not an accounting strategist.

So what do I mean by that? Well, it means just what I was talking about, driving improvements in customer care by moving your transaction thinking from getting the approval at the end of the transaction, shifting this to the front. This is an aspirational thing. You may not do this all at once. You may just automate your Accounts Payable first. But what we have seen from the innovators is that they don’t give you a case study. St. Joseph Hospital, Irvine, California, a roll-up of a lot of different hospitals in Southern California and a little bit into Texas, they had distributed AP operations in each of the hospitals. But they realized if they centralized it they could automate. They did that with the help of a service provider. Then once they got there, they realize, wait a minute, there’s a lot of invoices that are ad hoc invoices under $1,000 that don’t fall under a purchase orders. What can we do to get rid of those or simplify those? So they developed a purchase request system where they’d say, “Hey, if you want to buy something, just go into this online system, tell us what you want to buy, approve it, and that way when the invoice comes in we’ll just match it against the purchase request.”

So when I think about your role in this transformation, is that you’re trying to drive this transformation to make more happy customers and members inside of your non-profit, whether you have non-profit members or non-profit donors, whatever kind of not-for-profit you are, you’re trying to drive most value out of your back office operation so you can put more money to work. And that means, to do it, less paper and more organizational support, because they’re gonna love you more because you’re making their job easier. The person who brings me an electronic process that I just need to go on my iPad or my phone and I’m sitting at my son’s football or lacrosse game and I can approve an invoice, that’s satisfaction to me. Or the CEO of your organization needs to approve all the invoices over $10,000 but is traveling, hey, when he’s at the airport, he can look through a cue that shows all open invoices that are ready to be paid. He goes into an online panel on his phone and he goes okay to pay, okay to pay, not okay to pay, submit. He doesn’t have to be in the office to sign the checks anymore. Signing checks, that’s so ’90s.

So we’re moving touchless transaction, we’re making it easier for our stakeholders, and the last two here, well, they’re a little subtle but they’re important. Britt I think if we mute John, that’s gonna solve the problem of the echo there. There we go. Number four is first-pass processing. This has to with your exception rate and there’s an easy way to measure this. The number of invoices that your staff have to touch more than once, do a survey for a week, have your AP staff look at every invoice that they entered this week, and mark off the ones they had to touch more than once, where it was a repeat job. They tried to enter it, they couldn’t enter it, bad accounting data. They couldn’t enter it, no PO. They couldn’t enter it, missing purchase order if there is one. They couldn’t enter it, don’t know which department it belongs to. Couldn’t route it to the right department because there’s no department on it, new vendor not recognized, duplicate invoice, all the things that slow you down, have them pick how many they do that are exceptions and divide that by the number of invoices that they process. That’s your exception rate, plain and simple.

When I’m a consultant, that’s basically what I do when a team does time and motion studies. Why do you care? Because exception invoices cost four to five times the rate of the clean one. The ones that get put in the first pass only cost you, on average, $6.45, but these exception ones are costing $25 because they have to be reworked two, three and four times. They require phone calls, emails, sneaker patrol.

The last one here is engaging your Accounts Payable staff and here’s what our customers are telling you. The millennials don’t want these jobs anymore and your world is going to change. So you’re gonna be hiring more millennials in AP because we’re gonna have retirement. People are gonna be moving into different jobs. We’ve got to automate this if we want to move our organization forward because we’re not gonna be able to find people to do these jobs. And it’s gonna make your jobs of these staffers, they’re gonna like it more. Accounts Payable is gonna be more engaged. They’re gonna want to be in Accounts Payable. It’s not gonna be, “Oh, I gotta go to Accounts Payable where they’re buried in paper.” It’s gonna be, “Oh, that’s an exciting place to work. They solve problems. They’re a service organization.”

So back to the stakeholders, who are your stakeholders? I want you to also think about your suppliers as a stakeholder. And, for you, I also want you to think about your purchasers, whether you’re having a purchasing department or not. The non-profit organizations that look at this from the perspective of your customers, these are the ones that are more holistic at thinking about transforming the whole process and moving towards purchase to pay. The pay stream, we called it Perfect AP, and I’m gonna define that for you.

What is “Perfect?” Well, you know what perfect is. It’s like my wife is perfect, of course, right? My kids were perfect until they were five maybe, entirely without flaws, defects, shortcomings. Is your finance and procurement process perfect? Absolutely not. We know that. That’s the exception was asking to quantify. Well, what could it be?

Well, most organizations have an exception rate in the first pass processing. That’s about 80%-85% of the invoices can be processed on the first pass. And those 15%-20% that can’t are causing you all the headache. So that’s why you want to change it, because it’s not only headaches, but it’s time and money. So the innovators decide, “Let me solve that”, and what they do is they try to bring in innovation. Now, you know what this is, this is the Google car. And I saw I guess it was Uber’s released just today the driverless taxi in Pittsburgh. Now, it’s not live yet but they’re testing it and it’s kind of gee-whiz stuff, right? The P2P invasion is that, yes, there’s gonna be driverless trucks, that trucker’s actually looking at an iPad, but that change is gonna come to AP.

And so let’s go to our first poll question and learn about our audience’s perception of this change, what it means for them. So we want to know, “Have you adopted cloud-based accounting in your organization?” Because we’re gonna look at this change happening in non-profit and see where you are as a group and give you some sense of what’s happening outside because we know Google, and Amazon, and Uber are all doing super neat stuff, but does that really apply to us? And the reason we want to look at this is because we want you to think not that that’s gee-whiz anymore but it’s here and now.

And here’s when I’m gonna tell you more of the Avid story. Remember I said that AvidXchange has 6,000 customers? Guess what? A huge number of them are non-profit that prior to doing business with us where we transformed their Accounts Payable operation, they didn’t think Accounts Payable was strategic. They didn’t think about potentially letting us open their invoices for them and getting rid of the paper and the manual data entry. They didn’t think that that was an opportunity.

After showing them the future, here’s what we saw. Our audience poll is in, 36% of you are already using cloud-based accounting like Blackbaud and other tools that are now in the web. Congratulations, folks. You are actually way ahead of General Corporate America. You thought you were behind. No. You know why you’re ahead? Because you’re small and you’re nimble. IBM, it’s very hard for them to go to the cloud, but for a smaller non-profit, it’s much easier to go to the cloud. That means, as an indicator, you are much more ready to go to electronic processing in your Account Payable operation, because AvidXchange can integrate with 35 immediately tomorrow different accounting systems. That’s just the ones that we have immediate integration. Then we have integrations with over 200 accounting systems that can be done within 45 days. So for those of you who already moved electronic and web, we can hook you up tomorrow. For those of you who are looking into it, amen, because there’s a terrific opportunity for you to move there. All right, let’s move on, Britt.

All right, so you’ve got cloud-based accounting. That’s awesome. So what does that mean for your goals in Accounts Payable? Are you gonna go paperless? Are you trying to drive efficiency? Are you trying to drive savings? And how are you gonna achieve those goals? Hopefully you want to do all of these things. You don’t want to just go paperless with efficiency, but you’re also gonna drive savings and that’s what I to think about. I want you to think about heroic efforts like this guy carrying this giant fish that weighs 800 pounds. It’s possible. The financial strategist can do it. You can do it. But because these are an explosion of new solution and because of things like cloud-based accounting and third party partnerships with companies like AvidXchange, you can start to manage your processes and your partners and not manage the people and the paper. It’s a mind shift. I think you get it. It changes your world because we’re not thinking about AP as just a paper now. You’re thinking about, “Hey, this is an overall process. How could I manage this more holistically and better?”

And unlike Obi-Wan Kenobi who just waves his hand and says, “You will not pay attention to that paper in the corner,” now we’re gonna bring innovation in a real way. How many of you have one of these in your office? This has changed the way you make coffee in your office or maybe you use one of these at home. This is called mass customization. I can get coffee in the flavor I want, I can get tea, I can get decaf, I can get mild, bold, Vermont, green tea, all the different flavors because we’re changing the way we operate. We’re making our world today more convenient to our stakeholders. So perhaps you’ve seen the explosion of these kiosks. Many of you are listening to this broadcast perhaps from your mobile device, a tablet, couldn’t have been doing that before, so why aren’t we doing AP this way?

The thing is you can and perfection is here now. A perfect invoice for you should be one that is processed against an electronic order, purchase, or requisition. It didn’t come to an AP and it wasn’t a surprise. It was received centrally, it rarely needs to be approved. It goes right into the system touchless and it posts your accounting in the first pass. The exception rate that you have today, which is 15% that don’t post, is essentially zero because you’ve taken out all the friction. You’ve made it easier for your approvers to do the way they want to do business. And this leads to perfect purchase to pay. Again, it’s touchless and we can transit these purchase requests right to the supplier immediately.

And the cool thing is this changes our whole paradigm. We can start controlling how we buy and this means improved functionality, and we get pre-approval, and we monitor against our budget. Now, budget is a great topic in non-profit world. We have a limited budget to play with every year and we don’t want to go over it, and this is the time of year where we start getting a little sensitive. We’re heading into Q4 and some of our departments are starting to ask us, “Hey, how much have I spent in this division and how much have I just spent on that?”

They want visibility to the reports. How about if you had the tool built in where you could track these budgets and give them access to their own budget tools? Well, that’s part of what you can do with perfect purchase to pay. You can give them better budgeting tools and when they go overspend on a certain spend category, it will tell them, “Hey, you can’t do that purchase request because you’re over limit.” The last piece here before we get to your questions is five tips to a perfect career. Number one, become an expert in process, not processing. That’s the difference between accounting and finance. Finance is thinking about the overall process, accounting, thinking about the process. The innovators focus on the process improvement continuously. Can you do that? I know you can.

Now, here’s an example. Okay, health care, gosh, we hear a lot about health care, and how it’s so antiquated, and I just heard a story on the radio how the deductibles are going up, and we’re paying more and it’s costing us more to go to the doctor’s, and 40% of people have $1,000 or more deductibles. Good god, and so Telemedicine is answering. You can go to the doctor today. In fact, I did this. I don’t know, maybe in your area they have it already. A couple of months ago I had a problem when I was traveling and I wanted to talk to my doctor. I sent a message into their online portal and the guy actually did a Skype call with me. I thought I might be getting the flu but he wanted to look at me in the eye, got on the phone for two minutes, and he says, “I don’t think you have the flu. You’re in Phoenix, Arizona. There is no flu. I went to the CDC site. There’s very little flu there.” This was in the summertime. He’s like, “No, there’s no flu in Arizona. I think you have a virus. Sleep it off, call me in 24 hours.”

I just saved a doctor’s visit. I didn’t have to go to the emergency room. Telemedicine is changing the way you do business. This is what we do at AvidXchange. We are transforming Accounts Payable for our customers, for our 6,600 customers who don’t have to touch invoices anymore. They don’t even know what are paper invoices anymore. We’ve gotten rid of it. It’s all digitized, it’s all electronic. They love us! Talk to my competitor, even those guys, as rotten as they are, they need this.

Number two, develop success goals and measures for your own career and how you’re gonna measure success. Hey, if you’re gonna automate something, then prove it. How are you gonna know you did it? So what gets measures gets improved and also, at the end of the year, you can say here’s what we did and here’s what we saved.

I’m gonna give you some ideas. Maybe you heard this before, there’s four steps. And, by the way, you don’t have to memorize all this, because we’re giving you this in the recording. By the way, if you want to ask another question, type it in the Questions tab. We’ll be getting into it very shortly. So measure what’s broken in your business to make SMART goals, specific, measurable, attainable, relevant, and time-based.

Here’s how it works. Hey, it costs us $7.50 to process each invoice. The broken invoice is the exception, the 15%, theirs cost us $25. We want to drive our exception rate down to 10% by the end of March in 2017, now I’ve hit a SMART goal. It was specific, measurable, attainable, relevant, and time-based, and I put a time box on it. It’s gonna have a measurement. It’s gonna save us this amount of money if I do this and I drive my exception rate down by 5%, it’s gonna save us this amount of money. Cool? So what does this mean specifically in hard dollars for you? The novice is process invoices an average 45 days and it costs them $12 for an invoice. The mainstreamers process in 23 days. Those are the paper-based organizations. And, look, the innovators do it in six. Look at the cost. Innovators are using AvidXchange. AvidXchange charges anywhere from $1.55 to $2.25 per invoice processed in our system. My core question for you is can you do it cheaper than we can? And 99% of the time the answer is no, so why are you still doing it the old way? Why aren’t you looking at a third-party partner who can do it for you cheaper, better, faster? If you’re not asking that question, your boss is.

Item number three, engage your donors, stakeholders, approvers, and suppliers. Your ecosystem wants you to do business differently. So include them and think about how you’re gonna automate your process. The innovators discover not just what they’re doing in their own world, they lift their head up, look around, and this means engaging those internal users to get some scores. Maybe you can do a satisfaction survey. Here’s an easy one. If you set up an email process to people that email you when invoices come in, set an inbox, and every 5th inbox hit, send out an email with a satisfaction survey, or every 20th, or every 100th invoice, and offer $100 Amazon card or $5 Starbucks card for people who take the survey. You will get amazing feedback from your customers about what’s wrong with AP. You know what’s wrong inside your department. They’ll tell you what’s wrong with the process.

This means it has to be now, right? Today it’s all about now. We want Amazon Prime, we want it to show up at our house in 24 hours. This is the world we live in. Paper is not now. Paper is very not now. So give written stakeholders what they need so that they can solve their own problems.

And, lastly, I want you to be thinking about achieving perfection. So build momentum by fixing something that gets the process moving. For a lot of our customers at Avid, it starts with payment actually. We automate their payment, then we do their invoices, because we can solve their payment pains quickly, and move to the electronic really fast, and get them to 50% electronic in just months. We got an army of people that are absolute experts at converting your suppliers to electronic payment. Over 200 of them are dedicated to call your suppliers. If you’ve got 100 suppliers or 5,000, it doesn’t matter. We throw it into our network. We got more than 330,000 suppliers in our network. We got a lot of your suppliers already in our network. The ones we don’t, we get them on the phone, we communicate with them, and we get them electronic, plain and simple.

And the last one here is you are a leader but now become it for the rest of your organization. You took the time out to come to this session. So take a long-term holistic approach and, you know what, innovative organizations are driven by people like you, change agents. Become that innovative finance person. And this means you gotta energize the rest of your organization. You’ve got to create vision for them and excitement. Am I getting you excited about the change? I hope so, because it’s not something for tomorrow. It’s here today. And it’s not something like, “Oh, we’re non-profit. We’ll never get there. We’re behind the times.” Those days are over. We can’t hide behind our old processes anymore. Our donors expect more. They expect us to be on the cutting edge. Look, political campaigns are a nonprofit organization and they are the most sophisticated use of technology of any organization. Think about the canvassing that’s going on in political organizations. Unfortunately, think about the wasted amount of money that also goes into political organizations. It could be put to better use but they are highly innovative. You can be, too.

I also want you to think about in non-profit, in my experience, a lot of us, we tend to have a more bureaucratic as opposed to entrepreneurial culture. It’s harder for us to drive change. We tend to have a lot of meetings by consensus. If you have a meeting with more than six people in it, you should cancel it, because you’re not gonna get anything done, unless it’s a presentation. Say here’s what we’re doing. But a meeting to solve problems does not involve a big group of 12 people, 15-30 people. It involves a small team. So take those 20 people that you need to involve and break it up into smaller workgroups. Have a master steering committee? Then break it up into smaller subgroups. That’s how we control bureaucracy and move more nimbly.

It’ll be our last poll question. Have I intrigued you enough to say, “Hey, I’m curious about AvidXchange, AvidInvoice, AvidPay, AvidBuy, AvidUtility.” Did I mention we automate all of those? We automate your invoice process, the purchasing process, the payment process, and if you have utility bills we’ll give you incredible automation for utility bills, give you incredible amount of detail about the utility bills and analysis, what it means, much more than you’re doing today for a half an hour demo because you’ll learn a lot. And before you go and study more, maybe you should take a look at what these modern solutions look like today.

I hope that you’ve learned something. And what do we see here today? Britt summarize for us.

Britt: All right, Henry. So, actually, if you’re just listening in, we did launch a poll question on your screen. So just make sure you answer that, where do we go from here, if you’d like to see a demo or if you’re just here to learn. And we do have John, the CEO of NonProfit Times on the line. John, are you there?

John: Yes, can you hear me?

Britt: Yes, we can, John.

John: Great, thank you. Henry, that’s a very informative session. We have some really great questions. The first one is for small organizations particularly, can you mix and match electronic with paper, because they have customers who insist on getting printed statements?

Henry: I love it, I love it. Paper and electronics co-exist, and for those organizations that want electronic processing and paper processing, these are parallel. Here’s two examples. One example is we want to make electronic payments but we still need to write checks. Absolutely, you will continue to write checks, because you need a check for a check request. Something needs to be done at that moment that day. For statementing, even better, here’s what those suppliers want. Not only can you prepare an online statement, but you can give them and print out invoice images from this imaging system. So if the invoice came in paper, it gets converted to electronic, but, John, it can be reconverted back to an electronic link that can be shared with the supplier.

So, yes, paper and electronic processes do co-exist, because, frankly, not all of our suppliers are gonna be 100% electronic. Most of them can send us email, however.

John: Another question revolves around convincing the leadership in your organization that updating technology will benefit them enough to make it worth the investment. What tips can you offer people to make that argument?

Henry: Oh, I love it. ROI is so important and we live in a numbers-driven world. So start with how much does it cost per invoice and what your senior leadership wanted to know, where are the hard dollar savings? Soft dollar savings are interesting. That’s where, “Oh, well, we’ll save some time in Accounts Payable. Or division five we’ll spend less time approving invoices.” Okay, where’s the hard dollar there? The hard dollar means, typically, we’re gonna either do cost avoidance, we’re not gonna hire an additional resource in accounting when we grow, or we’re gonna reallocate a resource to a different function. So hard dollar would be, “I’m gonna take an Accounts Payable specialist or an accounting specialist who’s been doing accounts payable work and I’m gonna use them to do budgeting and forecasting.” Your senior leadership wants to see hard dollar estimates of where the savings are gonna come from.

It’s not enough to say, “I’m gonna save $5 an invoice.” It has to be, “I’m gonna save $5 an invoice and we’re gonna reallocate some resources.” Next question.

John: This one really is combined with two of them, Henry, and it concerns security. It’s how does an organization assure staff, donors, and even regulators that the financial transaction being made electronically are secure?

Henry: I love it. Not only is AvidXchange developed in what we call a 16 security model, our Chief Information Officer is interrogating and trying to do service attack on our organization, but the control processes around access and change of password means that certain information can be blinded from individuals. Let me give you an example. One of our recent clients, the legal department needed to have their invoices not be viewable by anybody in Accounts Payable but only by the legal staff. AvidXchange has a profiling system that gives right to access certain information to certain levels, so you can say the CFO can look at everything but the Accounts Payable specialist can only look at invoices for this kind of supplier. This is the kind of access control rights that our clients can enable at the implementation.

John: If you move to the cloud issue strongly advocated, Henry, and something happens to the financial status of the vendor, who owns the data?

Henry: All of the data’s always owned by our customers. We’re just trusted housers of the data and you’re entrusting us to maintain its security for failsafe, for disaster, and so we have multiple locations where our data is stored. And you have at any moment in time the ability to download the data continuously every month. It’s archived essentially forever. And if we’re having a challenge with our system, you can go into our core database. We maintain a data warehouse that you can get the data out of at any time.

John: This is an interesting question because a lot of organizations, face it, is in terms of the electronic transmission of statements, how do you handle recipients who claim they didn’t get it electronically and insist to be mailed, or you keep repeatedly send them electronic statements? Is there anything you can do to improve that process?

Henry: This is a tricky one when you’re doing outbound email, and so AvidXchange is primarily focused on Accounts Payable. If you’re doing statements to your suppliers, I’m not sure what statements they’re speaking of, because generally suppliers are gonna give us an email address that we can verify, but it is an interesting one. As we move more electronic, we have to verify that it was received. So I’m gonna use an example of the stamping automation that AvidXchange uses on inbound invoices. Invoices that come into the email address where they’re processed at AvidXchange are not only time stamped but acknowledged. Every invoice that comes in, we send back out an email to the supplier saying, “We have received your invoice on this day and time,” to verify that the invoice that they emailed through the waves got to us.

Those verification logs are posted to our clients’ portal so that they can see all the inbound invoices any given day and look at the invoices that came in before they’re indexed.

John: This is a good question from a lot of the respondents who wrote in and wanted to know about the kind of computer systems that an AP system should use. Do you recommend any particular kind of systems and does AvidXchange integrate with different accounting systems?

Henry: Well, as I mentioned, we’ve got well over 30 with direct integrations where we can hook it up instantly, and over 200 that we can hook up in several weeks after building the transfer protocol, specifically to your need because we have 6,000+ customers. We’ve already integrated any accounting system known to man. Do we specifically recommend an accounting system? No, but we want you to move to accounting systems that are forward-looking, growing, and are moving towards a web-based application, because that is where ERP systems are going, into the cloud. So we want to hear that yours is moving to the cloud.

John: Sorry, Henry, do these electronic payment systems require a different kind of computer in terms of the standard one that organizations may have? Do you need more power? Do you have to look at a different configuration? Or can it pretty much fit into an existing hardware?

Henry: That’s a great question because it’s all browser-based. From the user experience, your stakeholders can review and approve invoices on everything from a Galaxy phone, to an iPhone, to an iPad, to a PC, to a browser. The internal system of Accounts Payable, it doesn’t matter what system we’re talking to. We integrate to whatever accounting infrastructure you have whether it’s an older mainframe to the most modern PC or cloud-based system.

John: Great. I think that’s all the time we have, Henry. I know that I’ve learned a lot about Accounts Payable and I don’t think it gets the attention it deserves. I want to thank you for sharing your expertise. Ladies and gentlemen, this ends our session. You may hang up your handsets.

Interested in learning more from an AP Automation expert?
Hosted By:
Henry Ijams
VP of Supplier Solutions at AvidXchange