The Company On A Mission To Stop Us Touching Our Invoices

The role of the CFO has changed.

From scorekeeping to business strategy, the CFO's role is in flux. Historically, chief financial officers checked balance sheets and P&L statements and were responsible for the financial audits and regulatory compliance.

But in recent years, large enterprises have saddled controllers and chief accounting officers with more than these duties. CFOs are increasingly guiding other C-suite executives in making the best choices for a company's personnel, sales plans, supply chains, etc., projecting the cash flow in a clear and pithy way.

Therein lies the problem.

Manually processing thousands of invoices is an arduous task. Incomplete data, calculation errors, and duplicate invoices are only a few challenges that CFOs face. And slow processing and confusing invoices can lead to late or erroneous payments and failed forecasts.

Suppliers are also gaining the upper hand. They are in demand due to increased constraints on the labour and supply markets. This means that they hold more leverage and are likely to favour customers that make payments as stress-free as possible for them.

But eroding the credibility with suppliers in a world where cash is king doesn't need to be the outcome for CFOs.

Why Now?

There has been recent clamour in e-invoicing due to several countries, especially in Europe, issuing e-invoice mandates to fight tax avoidance, also known as the 'VAT gap.' For example, according to France's latest ruling, companies subject to VAT must accept e-invoices from 1 July 2024.

Recently, I spoke with Jason Kurtz from Basware, the company that automates invoice processing for companies. DHL, HP, Mercedes-Benz and others bank on Basware AP (accounts payable) Automation to deal with more than 170 million invoices a year.

Kurtz told me that CFOs need to come to terms with the ramifications of these mandates and why invoice automation helps companies stay compliant as they scale.

What Is Touchless Invoice Processing?

"If we found out that the finance or accounting team at one of our customers had to manually copy and paste the PO number to an invoice, we'd consider that as a broken process," said Kurtz.

This is what they refer to in the industry as 'touchless invoice processing.'

Basware's AI/ML-powered solution, automatically pulls data from PDF-invoices that businesses receive – with near total accuracy thanks to 'SmartPDF' technology. Think of it as a 'metal detector' for finding invoice data from your email, but in overdrive."

Machine learning ensures that the automation programme fills in recurring fields from similar vendors, improving over time as an algorithm keeps tabs on invoice patterns. Basware AP Automation then automatically pairs PO-backed invoices with purchase orders, goods receipts, and other required matching points.

As for non-PO invoices, Basware uses AI coding that pulls recognised data from previous invoices (such as supplier name, address or amount) and they are automatically sent to authorised individuals for review. This system gets even more accurate by training itself over time.

Once matched or approved, the application sends them to the Enterprise Resource Planning tool for payment without any human interaction whatsoever.

So, the invoice is literally touchless – hands-off, completely automated, and does not require anyone in the CFO's office to do anything unless there is a discrepancy, e.g. – price difference.

This modular approach has the added benefit of fitting in with a company's current IT infrastructure.

"Today, the one-size-fits-all approach no longer works," Kurtz argued. "We realise that companies use many different systems for many different purposes; such as making payments, updating stock in real-time or tracking deliveries to the door. For any CFO to get a holistic picture out of any back-office environment, these systems should communicate and complement each other."

Touchless invoicing delivers significant efficiency for the bulk of a company's invoice volume. According to data, firms have been able to reduce invoice processing times from 11 days to just one day.

The Modern CFO

No question, the reduced workload allows companies to save money. And tangible outcomes score major brownie points with AP clerks, who see the pieces of automation fall together like a Tetris game.

A tech company for 40 years, Basware has a great heritage of being a business led by talented engineers. In fact, it still serves its very first customer - a department store located in the centre of Helsinki, Finland - for whom it processed its very first invoice when invoice processing was nascent in 1985.

"But today, we're so much more than that," explained Kurtz. "The last few years have been about our journey to the cloud - building a foundation for digitisation."

Kurtz is executive chairman at Basware and advisor from Accel-KKR - the investment firm that helped delist Basware from the Helsinki tech stock exchange last year. He's taken the helm as interim CEO as the company looks for a permanent replacement.

"Our privatisation has allowed us to write our own destiny as we pursue our next growth phase to truly build the best-in-class SaaS business for the office of the CFO."

In the backdrop of tightening macroeconomic conditions, the modern CFO is lumbered with the challenging task of cutting costs and avoiding supply chain bottlenecks while investing in innovation to drive revenue growth.

Hence, it's little surprise the world feels the uplifting wind of touchless invoice processing. Automated processes have given invoicing a new lease of life to make it just... happen.