A cloud service that automates the processing of invoices was seen as a threat by accounts departments, said the company’s CEO. “If you get through to the accounts department most of them put the phone down because they recognise it’s a job killer,” said Roger Gregg, CEO of Invitbox.“But if you get in front of the owner or the CFO it’s pretty well received.”
While internal bookkeepers were resistant, Gregg said he had seen strong interest from accountancy firms offering “virtual CFO” services since Invitbox launched five months ago.
“We’ve had a lot of accountants start to roll this out across their clients because it manages to allow them to pass back savings and it makes the accountant’s life a lot easier,” Gregg said. Customers included Kelly Partners, Lawler Partners and MyCFO. Gregg estimated the average cost of processing an invoice was between $8 and $30 due to the labour-intensive data entry process.
Restaurants and bars often sent manually scanned invoices to accounting firms which would print out the invoices, enter the information in the accounting program and file the invoice. Invitbox’s service “removes all data validation and entry from accounts payable”, Gregg said.
A restaurant using the service asked suppliers to email their invoices as PDFs to an Invitbox email address. Invitbox then took a photo of the invoice, stored it in an online archive, stripped out the data and added a general ledger code for each item. Invitbox then held the invoice data for approval before sending it to an accounting software or a point-of-sale system.
Invitbox could automatically import data into Adept, Xero, Saasu and MYOB accounting programs. Invitbox could cut the cost of processing to 50 cents and the time from days or weeks to seconds, Gregg claimed.
“We have a client that processes 40,000 invoices a year in the hospitality sector. They are predicting savings of $220,000 per year,” Gregg says. Invitbox has focused on the hospitality industry due to the high volume of invoices it generated.
A commercial kitchen could receive 50 to 70 invoices a week, Gregg said, who spent several years working in hospitality. Part of the appeal was moving to a paperless accounts receivable workflow. Hospitality chains had small warehouses of paper from managing their accounting. “From day one there’s no paper in your office. You literally stop receiving paper invoices,” Gregg said.
Accounting firms liked the audit trail for each invoice and the ability to search across all invoices in the online filing system, Gregg said.
Invitbox stored invoice data in Australia at Fujitsu’s data centre in Sydney for seven years or more, depending on the customer’s regulatory requirements. “It’s a massive market. Instead of having a bookkeeper for $60,000 a year you spend $12,000 a year with your accountant,” Gregg said.