Just over a year ago I decided to leave my job at a successful payments company to start my own company. The decision wasn’t easy with a family and three children in London. So why did I do it?
It always struck me that paying suppliers was a pain everywhere I worked, both startups and large companies.
The problem is different depending on the size of the business. At startups placing an order was easy but keeping track of spend against plan was hard because there was no link between the order, the payment and the (usually excel-based) forecast. It was always very easy to overrun the budget.
However, with large companies, the ERP system kept a tight leash on spend, but placing an order and getting an invoice paid was always very painful. I can’t count the number of times I had to apologise to my suppliers and try to explain why they still hadn’t been paid.
It was only after my experience at Worldpay that I started digging into this issue. Here I was at Worldpay, making consumer online card payments even faster, cheaper and better, but why was nobody doing this for B2B payments?
My initial assumption was that somehow accounts payable people just didn’t care. That assumption felt a little lazy so I started talking to as many accounts payable people as possible to get their perspective. It turned out that I couldn’t be more wrong. They care deeply and don’t like paying suppliers late anymore than I did.
The real problem was that there is usually absolutely no link between the original order, the invoice and the final payment. Somehow the accounts payable people are supposed to work out whether the invoice is correct and can be paid, but not before lots of emails, phone calls and documents are sent around which, in today’s world of cloud seems like a total waste of time. Oh and if you find the invoice is not correct, then good luck trying to find out what the correct amount to pay is.
It turns out that an average company spends £10 per invoice figuring that all out, but some companies spend a lot more. 100 billion B2B invoices are sent each year globally so that is a lot of potentially wasted effort!
In the last year we have been working with our first customers to find the best way of solving this problem. The solution we came up with has three parts:
- We keep just one version of the order online which is used by both buyer and supplier and which serves as order, invoice and payment trigger. This avoids any confusion about who is owed what when and how it all links back to the budget
- We put a human face on the invoicing process. Yordex is designed as a collaboration tool where real people can ask questions, confirm delivery or leave comments. This helps resolve issue quickly and avoids the “us versus them” dynamic.
- We used an innovative approach and modern technology to make the process as intelligent as possible. Our order, we call it a Smart PO, knows what needs to happen when so it alerts the right people when actions are overdue and it can make the payment automatically when everybody has approved it
The service is live and we are very grateful to LoveCrafts and Treniq to help us shape it.
We’re now in the process of talking to companies with similar issues. If this is you or you know people that have this issue, do not hesitate to reach out.