Expense reporting, that horrendous process whereby harried and time-poor employees bundle together the copious quantities of paper receipts they have and then try and battle a horrendous legacy system in order to file their expense report (and, hopefully, get reimbursed). Expense reporting is fundamentally broken and this is why high-flying vendor Expensify seems to be growing like weeds.

But, while expense reporting is certainly a very important part of an organization’s process requirement, it is only one part and is itself a subset of the broader accounts payable (or AP, to those who work in the area) function. It is this broader AP space that Tipalti is looking to digitize.

Tipalti is a global automation solution for supplier payments – the company aims to streamline all the different phases of supplier payment workflows into a single cloud platform. From payee onboarding and vetting to tax and regulatory compliance, payments to suppliers anywhere in the world in a wide range of payment methods and currencies, early payments, supplier payment status communications, to payment reconciliation and AP reporting, Tipalti aims to cover it all.

The company just announced the introduction of Touchless Invoice Data Capture and AI-Based Approval Routing technology to its accounts payable platform. This enables invoices to be fully digitized with no intervention by accounts payable, making invoices approval-ready and ultimately payment-ready, meeting the needs of finance teams straining to cope with the scale of their organizations’ growth.

How it works: OCR meets AI

Tipalti scans invoices from emails and then automatically populates the required fields such as invoice number, supplier, quantity, and rate – including data in 27 languages. Once an invoice is added to Tipalti, the optical character recognition (OCR) technology supporting the Touchless Invoice Data Capture capability hopefully eliminates the need for manual processing. If the invoices scanned through OCR aren’t a 100% match, an escalation layer provided by Tipalti automatically routes the invoices to a managed service that manually reviews invoices, checks fields for accuracy and populates any missing fields. Machine learning of past invoice history enables OCR match rates to improve over time. This ensures invoice data capture remains completely touchless for the AP team while also assuring processing accuracy.

The AI-Based Approval Routing engine then proactively assigns the bill approval sequence based on patterns learned from historical approval sequences. Email notifications are automatically routed to the appropriate approvers to action, ensuring compliance with the organization’s existing internal control processes.

The ROI of automation

The return on investment of this new approach can be significant. Estimates provided by Tipalti (who is obviously just a little biased but, still…) suggest that an organization processing 500 invoices a month could save over $100K annually by rolling out touchless invoice technology alone. Chen Amit, CEO of Tipalti articulates the base proposition:

Manual invoice processes stymie today’s finance organization and hold back the CFO from helping the business scale rapidly and be more successful. By applying the latest OCR and AI technologies, along with managed services to address any exceptions, businesses can finally modernize their finance operations with a touchless invoice process. Directly integrating these features within the end-to-end supplier payments process means that AP teams will have significant time freed to focus on other business critical tasks.

The customer benefit

One customer that has been using this functionality already is Xometry, an online marketplace for custom machining and manufacturing. Xometry’s CEO, Laurence Zuriff, is bullish about the benefits:

Tipalti’s unified approach to the entire invoice-to-pay process has enabled us to scale more efficiently and cost effectively. With over 1,000 supplier invoices each month coupled with our anticipated growth rate this year, we need to reduce as much manual processing of invoices as possible. Tipalti streamlines the entire the supplier payment workflow, which is critical to our operating model and the ongoing relationships with our manufacturing partners.

Point solutions or complete AP automation?

I’ve long been a fan of expense-reporting automation plays such as Expensify and ReceiptBank, and wondered how Tipalti sits alongside these vendors – complementary or competitive? Tipalti’s answer:

Expensify focuses on expense management whereas we focus on supplier payments so we are really complementary solutions. Similar with Receipt Bank which focuses bookkeeping for receipts and invoices.

In terms of the broader questions around best of breed versus platform plays, the company had this to say to justify the value of a complete solution:

Tipalti is focused on serving fast-growing and mid-sized finance organizations around the world, who have more complex, high volume accounts payable and supplier payment operations. These companies typically are spending well over 40 hours a month managing their entire supplier payments workflow and also require strong financial controls to manage tax compliance, regulatory, fraud, payment error, and audit risk. Tipalti solves this by providing one unified cloud solution that encompasses and automates their entire AP process, from supplier onboarding to tax compliance, invoice processing, OFAC regulatory checking, global payment execution, supplier payment status communications, and finally AP reporting and payment reconciliation. Because of this unique holistic approach, we typically wipe out 80% of the workload related to managing the AP operation while eliminating 66% of payment errors and protecting from tax, regulatory and fraud risk. Companies use us to run their finance operations efficiently as they grow and scale, so that their CFO can focus his team on more mission critical initiatives.

And in a more obvious criticism of a standalone solution versus its own holistic one, the company suggested that:

Other systems may only help with one standalone process such as payment execution (sometimes with only one or two payments methods), where we focus on the end to end AP function, and pay out in 6 different payments methods (US ACH, Global ACH, Paypal, wire transfer, check, prepaid debit card), in 190 countries and in 120+ currencies. We even offer early payments if your suppliers want to be paid prior to the invoice due date.

MyPOV

Have no doubt, a standalone expense reporting solution may just be an offering that automates a discreet single function, but if that function is sufficiently broken and time-consuming, that brings massive value in and of itself. While I don’t quite agree that Tipalti is complementary to these discrete solutions, that doesn’t mean Tipalti is likely to disrupt them. Many organizations don’t want, or can’t implement holistic AP systems, but can leverage a tool like Expensify. For those organizations, the value that Expensify delivers is sufficient. For those organizations prepared to take a look at AP in totality, Tipalti is certainly worth investigation.

Ben Kepes

Ben Kepes is a technology evangelist, an investor, a commentator and a business adviser. Ben covers the convergence of technology, mobile, ubiquity and agility, all enabled by the Cloud. His areas of interest extend to enterprise software, software integration, financial/accounting software, platforms and infrastructure as well as articulating technology simply for everyday users.

Leave a Reply