The Three Reasons Why Businesses Still Use Paper Invoices

Growth of automation in the accounts payable space was fairly haphazard until recently, but with the coming of the pandemic, the concept has gotten a lot of traction. Businesses, no matter how big or small, need to get paid, and if writing a check and depositing it in the bank is no longer an option, then an alternative must be found.

The advent of remote work and the sudden urgency for a solution that can help businesses get paid without processing checks in the office has been good for Beanworks. The company sells accounts payable (AP) automation software infused with artificial intelligence (AI) to process invoices and get them approved and paid faster.

“Accounting teams usually always worked in an office,and almost never at home,” said Beanworks Co-Founder and CEO Catherine Dahl in an interview with PYMNTS’ Karen Webster. “That is what’s triggered the most recent wave of people interested in this.”

While difficult to quantify, numerous factors are believed to be fueling the automation uptake, including duplicate and fraudulent invoices and employee expense abuse. Surprisingly, although they might seem like important considerations for businesses, Dahl said they’re more like minor irritants.

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“The pain points that really kick in are approvals and payments,” she said. “That’s what is prompting people to start looking, and when they see that duplicates aren’t being paid anymore, all these fraud protections, those are really just the icing on the cake.”

That’s not to say customers aren’t appreciative of such benefits. On the contrary, the ability to easily spot errors in invoices is a big selling point that can help to realize enormous savings over time. Webster wanted to know how important a role AI plays in AP automation, and Dahl recalled how one HVAC business owner was able to quickly spot a big error on one of his invoices to a regular customer.

Read more: Beanworks Bolsters Accounts Payable Offering With AI

By performing a quick search, he found another job he’d done on the same property, pulled up that invoice, and saw the price was indeed wrong. And it was all done in seconds. On the other hand, if he didn’t have Beanworks’ software and was forced to go to an office to check his records, there’s every chance he just wouldn’t have bothered.

Dahl said identifying that single mistake saved the customer $600. Considering the software only costs him $3,000 a year, the implication is that if users can spot a few more mistakes, it will more than pay for itself.

AI can potentially do a lot more than just flag errors though. Dahl revealed Beanworks is currently working on a “touchless processing” product called BeanFlow that relies on optical character recognition technology to read invoices, including each line item, and scan them into the system. The benefit of this, she said, is users will be able to build up a history of interactions with each vendor and eventually begin to manage large volumes of invoices by exception, as opposed to manually processing each one.

See also: What No One Saw Coming in AP Automation and What Comes Next

“You can do it in a really robust way where you have just one person managing a huge volume of invoices,” Dahl said. “That will only work when you have AI in place that can look for patterns and pick up any anomalies.”

Webster asked if it’s possible to integrate Beanworks’ AP automation tools with automated accounts receivable (AR) systems. Beanworks was acquired earlier this year by the business process automation firm Quadient, the parent company of YayPay, which specializes in AR automation.

Read more: Quadient Purchases AP Tech Firm Beanworks

Dahl said since she’s had the chance to work so closely with YayPay, she has developed a vision around the whole idea of AR-AP connectivity. If the two systems can talk to each other, they can offer compelling benefits for users. So, for example, when a vendor sends an invoice with YayPay to a customer that’s using Beanworks for its AP, the system is able to send alerts at both ends. Users can see the invoice is being processed, when it has been approved, and finally, receive confirmation that it has been paid.

There are benefits for CFOs too, Dahl said. They can now use a single tool to see all entities on both sides of the ledger, making their job of managing the businesses’ money that much easier.

“You need to be able to manage payables as the cash going out and receivables as the cash coming in,” she explained. “So, if you could put those two together, you can give the CFO a much better picture of their cash management in one place.”

The biggest challenge for Beanworks now, Dahl said, is to try and raise awareness of these benefits. She told Webster she came across many companies struggling during the pandemic trying to patch together their own automated solutions, scanning documents and creating shared folders so everyone can view them, attaching email approvals and more.

“They’ve invented systems themselves in a really chopped up way,” Dahl said. “So, we spend a lot of time trying to get in front of the heads of finance departments. We want to show them there’s a way to do this that doesn’t involve piecing together different abstract technologies like Dropbox just to get paid.”