Adam Larson: 00:22

Welcome to Count Me In. Today, we're joined by Alex Louisy, cofounder and CEO of Upflow, to explore the evolving b to b payment landscape. Alex highlights the challenges of ensuring timely payments and the need for more modern online methods that give vendors control while improving the customer experience. We discussed the inefficiencies of manual payment process, the benefits of automating invoice reconciliation, and the competitive edge gained from digital payments. Alex also stresses the significant impact of late payments on businesses and offers strategies to encourage customer adoption of new payment methods.

Adam Larson: 00:59

Tune in for actual insights on optimizing your order to cash cycle, enhancing department collaboration, and driving financial success. Alex, I'm really excited to have you on the podcast. And today, we're gonna be covering things about the business, the the b to b payments in that landscape and, because you're definitely an expert in that with your organization, Upflow. And so just to start off, what is the kind of the current state of the b to b payment landscape? And what trends are you seeing emerge, especially as you're looking at a lot of data, you work with a lot of customers, and it's, it's definitely an up and down, especially with the way the economy is today.

Alex Louisy: 01:39

Exactly. So first of all, thank you so much, Adam, for having me today. I think we're very happy to share like, some of the learnings that we've had from working, as you said, with many, many customers and companies trying or actually, actually getting paid. I think the landscape is quite interesting because it's moving fast, right? I think that's the first thing that we would have to say.

Alex Louisy: 01:57

If you look at like all other industries, consumer payments, everything has already shifted in some ways, but B2B is still at the very beginning of like a shift. And that would be what I would say as like the first trend that is interesting to notice is the fact that, like, we're still in the early stage of like a big shift towards probably online payments. Right? So I think if, if we look at this report that we're going to publish on a regular basis, if you look at this specific, session of this episode, the first thing that I would say is that we notice a stark difference between industries, right? Whether it's about DSOs or their sales outstanding, how long does it take you to get paid?

Alex Louisy: 02:32

Or, you know, the kind of like what we call the at risk rate in terms of like the problems that you're just never getting paid by your customers. You can see that there's a wide difference per industry, right? Some industries, typically the industries are toward like technology and subscription based type of business usually have much better terms in terms of DSOs and at risk rate than the more traditional industries. So think about manufacturing or anything that is related to consulting firms. These are like the worst industries when it comes to getting paid on time by your customers.

Alex Louisy: 03:05

Right? Under this kind of, like, first, frame of looking at the the numbers, there's another interesting aspect of it is that if you look at, like, the traditional one, the one that are not performing really well, if you look at, like, one specific industry, then the variance is much larger than in the good industries. Right? And what is interesting there is to think that, like, yes, sometimes you're in an industry where on average, you're not gonna get paid really fast. But if you implement the right strategy, you're probably going to be paid much faster than your competitors or people that are in the space.

Alex Louisy: 03:38

So that would be something that we find quite interesting because I think it tells a lot about the fact that, like, as a finance team, there is things that you can do to actually get paid faster. So that's the first general trend. The second trend that we see in general that we think is fascinating is the fact that whenever you're using, like, modern payment method and specifically online payment method, you get paid much, much, much faster. And that's not a question of, like, whether you're a consulting industry or, the tech industry. This is just across the board implementing online payment method and making the checkout experience for your customers simpler.

Adam Larson: 04:15

Mhmm.

Alex Louisy: 04:15

Accelerates your payment, and that's something that is really interesting for us to think as finance teams as well.

Adam Larson: 04:22

That is very interesting because, you know, obviously we have to get paid to be able to pay our bills, to be able to continue running as an organization. So, that's hugely important. What kind of impact does late pay do late payments have on organizations? And I'm I'm sure if you if anybody works in an organization, they see that impact, but maybe we can talk about, like, can we quantify that a little bit?

Alex Louisy: 04:41

You know, the first interesting thing is that a lot of people actually don't see it. Right? There is the statistics around the fact that, you know, like like probably like like 25% of business go going bankrupt, go bankrupt because of late payments. Right? That's like the kind of moment where you see the reality quite hard, like, and that's where you see it.

Alex Louisy: 04:59

But in general, you know, when you talk to finance teams, yes, it's not perfect. Yes, it takes them like a lot of time. It's a headache because they need to go after unpaid invoices and chase customers. But when you ask them, can you actually quantify how much it hurts your business? They can't really give you an answer.

Alex Louisy: 05:17

Right? And I think this is something that is super important because we look at it from many different angles. But I think like the most basic one would be like getting paid late, and you can put a for anyone working in finance, a weighted average cost of capital on how long does it take you to basically bankroll your customers. Money sitting on the bank account, not on your bank account. There's basically something that you lend money to them, right, in some ways.

Alex Louisy: 05:41

And you can put a dollar value on this. So that's the first thing. But that's not the most obvious one in terms of impacts. The highest impact that we see is in invoices are actually never paid. Right?

Alex Louisy: 05:52

And having a clear visibility on those invoices and the percentage of your revenue that you never collect is something that is important. Now that's something that we often say is that sometimes the accountant's gonna come and just write off some of your invoices. Right? And this is the moment where you actually recognize that you are never going to be paid by your customers. Yeah.

Alex Louisy: 06:12

The point that we have at an operational level is that sometimes we see like invoices are sitting in account receivable for like more than 6 months, 12 months, and maybe did not reach enough. Maybe you don't have a notice chart that comes and say, hey, you have to write off those invoices. But the reality is that as an operator, you know that they're never gonna be paid. And so I think, you know, the approach that we have at Outflow around this is to say, well, that's how we define, like, some kind of, like, at risk rate, which means whether it's been written off or not, just be mindful of like how much of these revenues are likely to never be collected. And that drive those 2 metrics, drive like very clear dollar value on a monthly or on a yearly basis that your business is actually incurring because of bad management on your accounts receivable.

Alex Louisy: 06:59

Just as a spoiler, this amount is usually way higher than you think. And I highly encourage, like every finance professional, to try to think around this. Like we have tools to do this, but you can do this as well, like with a simple spreadsheet because it's way, way higher than what people think.

Adam Larson: 07:17

Yeah, definitely. And I know you have some specific numbers, so I encourage everybody to check out the report. We have a link to your, uploads report in the show notes just to get all the all those numbers that we're we're not boring you with numbers today, but if you wanna check out all those specific numbers, please do that. One of the things you mentioned that, in your first answer was about how technology can kind of with help encourage those payments and get those payments come faster. But when you and I were first chatting a few weeks ago, you mentioned something about technology friction.

Adam Larson: 07:44

And I think that's a big part. Technology friction can impact your late payments in transactions. Can we talk a little bit about that and maybe give

Alex Louisy: 07:50

some examples? Absolutely. I can give you like, an example that is not even about technology, but if you just think about like, what is anti technology, which is a check, right? This is a big friction in how you get paid, right? Like having a piece of paper that you put in an envelope and where you literally have to manually like pick it up in the mailbox and stuff.

Alex Louisy: 08:11

Like when you think that it's 2024, right, it just doesn't make any sense. And I think like in general, if I take this example of checkstyle, like the extreme case, right? But in general, the order to cash cycle and how you get paid by your customers in B2B, this idea that like you send an invoice as a PDF, that the person needs to download it, You know, kind of like open it, up on the due date, etcetera, etcetera. All of these steps are like riddled with inefficiencies, right? And the challenge we have for finance teams is just to realize that it's not about like trying to invent like new payment rails, right?

Alex Louisy: 08:49

We're not saying like, you should put everything on the blockchain or anything that seems like totally crazy, but just like, even like implementing card payments or online payment initiation so that you know exactly what you are paying and not having to do like a kind of a manual cash application. All of that is not a revolution per se. But problem is that as a finance team, when I need to implement that, it's not that easy, right? Because it's accounts receivable. It's your customers.

Alex Louisy: 09:16

You can't really force them as opposed to vendors where it's easier to tell them like, hey, if you want to get paid, here is the process. It's, for customers, it's a little bit different. And I think that one of the things that is very important is trying to have a kind of a global approach on like how you incentivize your customers to pay with the payment method that are best for your business, right, as a vendor. And this is not easy. This is clearly not easy.

Alex Louisy: 09:43

And the challenge that you have is that it can't happen overnight. It's an incremental step. Let's say that you have a 1,000 customers. And if you think that like you're going to wake up tomorrow and say, well, starting now, everyone is paying by ACH debit and I'm going to charge you every when the invoice is due. Of course, you're not going to get it.

Alex Louisy: 09:59

Now, the problem is more around in terms of the incremental steps on how you get there and having a strategy in mind to reduce this friction all the time so that your customers can pay you, easier. The point that I would say, Adam, is that, you know, whenever we talk about late payments, everyone loves to talk about bad payers. And there is this feeling that, like, the only reason why, like, you get paid late is because there's only bad payers out there. Right? But if you've built a business and if everything works well, right, you usually have a lot of good payers.

Alex Louisy: 10:29

Right? People want to pay you in general. Right? Not, like, 100%, but most of them won't. Yeah.

Alex Louisy: 10:34

And so we really wanna flip that kind of, like, vision around late payments to say, hey, how can I make this experience a better experience? Because that's really what it's all about. Making this experience simpler and faster for everyone, customers and yourself as a vendor.

Adam Larson: 10:51

For sure. I mean, if you make it easier and faster, people will be willing to pay because there's no prohibit, prohibitations. Because when you're when you're trying to they just think about as a just a regular b to c customer. If you're trying to check out doing the checkout process and that you find any challenge, there's a lot of probably a large percentage of people unless you really want that. You're like, I wanna go somewhere where this is easier.

Adam Larson: 11:11

And so you wanna make that easy for because because people who are paying a b to b payment are still b to c p type people. Like, they're, they're still a customer, even though they're a business and you wanna make their, their stuff easy for them.

Alex Louisy: 11:24

Exactly. It's, it's interesting what you said because, you know, we often give this example about like, you know, marketer thinking about like the conversion on the website as a funnel. Right? And, you know, you're trying to optimize every step of the funnel. And the payment one is a very important one, right?

Alex Louisy: 11:37

If you try to pay and, you know, it doesn't work, then you're probably going to lose the user or the customer. Right? And very few people think like this when it comes to B2B, when they issue like a 1,000 invoices a month, which means that there is a 1000 payments that are expected to come into your bank account. And that reoccurs usually like every month. Right?

Alex Louisy: 11:56

And so, you can try to think about this, this payment experience exactly in the same way as in the consumer world. And you mentioned the name that I said earlier around the checkout page, right? Yeah. This does not exist in the B2B world when this is the basis of like, Hey, I want to see what I owe to this vendor, the list of outstanding invoices and a simple pay now button. How many B2B invoices are paid like this?

Alex Louisy: 12:20

It's really rare. It's getting to this point where you really like try to optimize this, this experience is really, really important to be more efficient in how you get paid.

Adam Larson: 12:29

Yeah. And so it's very clear that having the right technology in place is very important, especially for these type of transactions. What are some of the biggest challenges that organizations face? Because when you think about it, finance and accounting teams are sometimes the last parts of the organization to get new technology. Part of the reason is, you know, they're a call center, and so a lot of people see them as a call center.

Adam Larson: 12:51

And so they're like, oh, we'll get to that eventually or, you know, it's hard to get actually implement projects within the finance and accounting team. So, what are some of the biggest challenges that you face, especially when you're trying to adapt new technologies within that organization? And, how

Alex Louisy: 13:04

can we overcome these challenges? Yeah. I think it first comes down to the the point that we mentioned earlier about measuring. Right? We hear a lot of people telling us like, oh, this is not a priority.

Alex Louisy: 13:14

Well, once you realize that, like, you have 1 or 2% of your annual revenues that are never collected, or that you're experiencing, like, DSOs are like way higher than the payment terms are on your invoices and that it really hurts your business in terms of working capital, then suddenly you can shift the strategy and say, well, you think that this is not important, but I can tell you that this is really important. Right? The sales people are and revenues are usually like always front and center, right? When they close a deal, they gong to gong, and everyone is having a big feast. But what is happening if you never collect deals that has just been closed, right?

Alex Louisy: 13:50

That just closed. And so, I think it's important to shift that vision and shift the priority as a finance leader to just say, hey, this is the real cost of like what we're talking about. And that's why this is going to become a strategic project. Right? Now, as you said, the finance teams are usually the last one to just kind of implement the new technologies and, and everything.

Alex Louisy: 14:13

I think one thing that is super important is being in the right ecosystem. So having the right ERP or finance tool that can actually grow with your business and can also enable, like, the connection with the right tool that you need. So, you know, if you need an expense management system, of course, it's easier if it connects directly to your, accounting system that you've always been using, etcetera. So which required that you've chosen the right accounting system in the first place. That that that is something that is important.

Alex Louisy: 14:41

And then I think there is also, like, a kind of a tendency from, you know, build versus buy where sometimes, like, you know, we've seen some finance teams trying to get the engineers, get away from the product. You try to build, like, a little payment module as part of their experience, depending on like, who are your customers. But I think this is usually like bound to failure in the sense of the product team is first. It's not necessarily the job to work internally for the finance teams. And then the second thing that I would say is that this requires like, you know, kind of like a lot of dynamic changes all the time, right?

Alex Louisy: 15:15

Because you're going to open a new market with new currencies. You want to implement a new workflow, a new payment method. Of course, if you're selling to customers in the US, it's not going to be the same as Europe. And and so I think one of the challenges is that you need to find the technology that can evolve with your company. And in the same way, like, no one is building a CRM.

Alex Louisy: 15:35

Just buy, like, either Salesforce or HubSpot or, you know, and you do your kind of RFP to know what's what's best for you. I would highly encourage the finance team to just kind of, like, try to see what are the tools that can that they can buy so that they can grow with them towards that goal. And especially in this category of like how you get paid by your customers, it's still like very nascent category. Sometimes like we see people trying to build instead of buying, and I think it's usually leading to, terrible outcomes for, for, for these finance teams.

Adam Larson: 16:05

Yeah. It can definitely lead to some terrible outcomes. So, you know, as you've as you've observed many organizations coming and utilizing a better system and and seeing that and seeing that be successful, you know, are there some, you know, are there some, I know he said it when Boris was numbers, but are there some, like, are there some good revenue things like, hey, they were able to get this much revenue. Like, have you seen those kinds

Alex Louisy: 16:27

of trends as people implement these solutions? Absolutely. I think one of the one of the things that is highly satisfying for those finance teams when it comes to when it comes to cash collection or when it comes to how you get paid is that you can very, very easily measure the impact of like any changes that you implement. Right? So let's say that like you move 20% of your customers on CH David or cards that you charge, right?

Alex Louisy: 16:51

The impact usually on DSO is just the drastic impact. Right? So because suddenly, like all of these customers or the vast majority are going to be charged exactly on the due date of the invoice, right? So it's really easy to measure the impact of such changes, right? But to do this, you need to first implement this new payment methods, and it's not always easy.

Alex Louisy: 17:10

And then you need to have a strategy to roll this payment method to your existing or new customer base. Right? And I think that's where the that's where we'll we'll really like to position the the CFO, not as a kind of a back office function where, you know, it's just about like, all right, so here's a 1000 invoices. We now need to collect it. And then you're gonna spend like, 2 weeks in a spreadsheet and do some case application on the, every day, but more trying to have a holistic approach around, hey, how can I work with the sales team, for example, to explain that maybe giving an incentive for a specific payment method makes a lot of sense for us as a business?

Alex Louisy: 17:47

Right? And that's a different way of like looking at like the role of the finance teams from my perspective, because suddenly like you're front and center in the upper in the global operations of the organization as opposed to being a cat back office function. So I I think you can definitely see the the impact we've seen, like, a lot of finance teams are reporting to the board on the progress that they've made on such changes. Whether it's because they've saved costs, reduced the time to get paid, improve the customer experience because that's also super important. There's a lot of things that are way beyond like just the simple back office function that no one really cares about and no one is really measuring because, you know, it's just things that we need to do and it doesn't really matter.

Alex Louisy: 18:29

So, yes, definitely you can measure that and and measure the impact in a very positive way.

Adam Larson: 18:34

That's amazing. And let's dig into a little bit more about the CFO and their role in this whole implementing this technology and how they can improve their strategy. How you know, what what does the c what how can the CFO take their team from, hey. We're just a bunch of back office people trying to get things done to, hey, we're in the front. We're in the forefront.

Adam Larson: 18:52

We're part of the strategy. We're getting things moving forward, and we're reporting to the board because all the great things we're doing and being a part of the sales conversations. Because a lot of times, sales does their thing, and then they say, oh, guys, do this. But how can we, how can we

Alex Louisy: 19:06

Yeah, absolutely. It's not being an afterthought and just thinking like, oh, we closed the deal and then, you know, we don't know what's gonna happen. Yeah. As opposed to being, being like, more together. Again, I think it starts with, like, more visibility, right?

Alex Louisy: 19:18

The visibility on, like, how important it is for the business, you know? When there was the credit, like, liquidity crunch in, like, in, like, 2 years ago, everyone started knowing the money was not that limited anymore and and the interest rates started to go up. Suddenly, you know, everyone realized that, well, there is no free money anymore. And sometimes people had 1,000,000 sittings on the bank account of the customers that were not even chased, right? And so some companies were literally running out of cash when there was cash available that should have been on the bank account, right?

Alex Louisy: 19:52

And it's classified on the on your balance sheet as an asset, right? Accounts receivable. Well, it's a great asset, but it would be even better if we, there would be like this asset in the form of cash on the bank account. Right? So I think that the finance teams can have this role of like explaining how important it is.

Alex Louisy: 20:08

And, you know, I often tell this kind of like little joke to you, or it was not a joke, but by this little story from my previous job before we started the company where I used to work in a company where as a salesperson, I would sell to customers, but I would never know if they would pay us or not. And sometimes we would sell to many customers that would never pay us and no one was aware. And so closing this loop where, you know, I'm not talking about like flowing back commissions or, you know, kind of like getting to the next step, but just simply this visibility of saying, well, these are the best performers, not necessarily in terms of deal closed, but cash collected. And having this information available is actually a great way to bridge the gap between the sales team and like a finance team, and work together towards objective. Right now, it's usually when you start surfacing those numbers, this will drive also some changes into how the business is run.

Alex Louisy: 21:02

Typically, like I always remember like, something that was quite enlightening for me hearing from the CFO of Carta in the US, Charlie telling me like, well, we've implemented a flow where whenever you close a deal, the default proposition is that the customer has to sign an ACH debit mandate so that we can charge them whatever an invoice is going to be due in the future. Right? And I found this approach really interesting because you suddenly are reversing this approach from, would you send out an invoice and we'll let the customers pay the way they want? So, if they send a check, well, actually we take the check. And if they do wire, we do the wire and move back to the default value proposition is we're gonna charge you.

Alex Louisy: 21:43

Right? And that's how we work. If literally saying in some ways, if you're not happy, you can go and see a competitor. And it's not necessarily the case, right? Of course, you can make an exception.

Alex Louisy: 21:53

Of course, if like there is a big, if this is a big deal blocker. But the reality is that instead of having 5% of your customers on direct debit, you might have 60% of your customers being charged. And that makes a whole difference. But I think as a, again, coming back to your initial question, it requires that the CFO and in general, the finance function is really business driven and one works hand in hand with the business team so that you can then implement the strategy that makes more sense for the business. And it's not the other way around.

Alex Louisy: 22:24

If you just come and say, Hey, we know how to do this. It's not gonna work. So you really need to explain, like, how you do this and then get the right processes in place so you can improve the situation.

Adam Larson: 22:34

I think this is just another great example of how important it is to break down the traditional silos within corporate structure where it's like, oh, you do your role, I'll do my role, and we'll send emails to meet in the middle. No. We like, we can't have those divisions anymore because what you just described is not how many organizations work today. And I think it's hugely important that we have these conversations and that people really start thinking about it from that perspective.

Alex Louisy: 22:57

And it requires, I guess, like the involvement from like the top management and the founders and, you know, you need to have that willingness to say, Hey, we need to work together. Right? There is no point in closing a deal if you know, this deal, it never goes live. If the customer is not happy and if the customer is not paying us because chances are that, like, we are a for profit business. Maybe not.

Alex Louisy: 23:19

But in general, that's the vast majority of like what salespeople do. And there's not too much of a profit if, you know, it ends up never being paid. So I think it's, it's important to have this clearly as a, as a kind

Adam Larson: 23:32

of a general mindset for the organization as well. Yeah. That makes, that makes a lot of sense. And I think the other thing is, is, is, is having the finance team, the finance and accounting team really show the numbers. You know?

Adam Larson: 23:44

They we all know how important cash flow is. And you mentioned, like, during the during the pandemic, people left 1,000,000 of dollars in making calls because they just didn't bother. You know, how important it is to kind of create that saying, hey. Look at our cash flow. Look at what we're missing because of these late name.

Adam Larson: 23:56

This is why we need to do that.

Alex Louisy: 23:58

Yeah. You know, the one of the metrics that we often have in the kind of like, the tech industry is, you know, like the kind of like a cash collection coverage. So you just kind of like have this very simple metric around, this is my monthly recurring revenues, and this is how much we collected. Just having your goal that says, Jason LinkedIn talks a lot about this, but just having a goal that says, well, on a given month, we want to collect like more than a 100 percent, you know, of our monthly recurring revenues. And just having this number that is not necessarily the only one, but one of the key targets for the organization that sit like in the middle of the room on like one of those big TVs where, you know, you have all the sales number and, you know, maybe like some of the product metrics and also having this one.

Alex Louisy: 24:42

I think for me is super important. At least that's what we have here. I mean, I'm obviously a little biased, but I think I think like a lot of companies should have this, this number as objective because it tells a lot as well about the quality of your your revenues. Right? It's easier to issue an invoice than actually getting paid by customers in some ways.

Alex Louisy: 25:00

And it's not necessarily because of the technology, but also because, you know, anyone can issue an invoice, but a customer will only pay you on time and will pay you correctly if the services that you deliver are actually good services, right? So that's also a point that is very important. And that's why also investors are kind of like, very careful about this cash collection, right? Because it tells

Adam Larson: 25:22

a lot about the quality of your business. It really does. And we've been saying since we started, you know, if you're doing a great job and things are going well, people do want to pay you. They want to do business with you, want to continue. And so if people aren't paying, should you look back and say, okay.

Adam Larson: 25:39

First of all, is our technology working? But second of all, are we doing a good job that we want that people want to pay

Alex Louisy: 25:46

us? Exactly. That's, that's, that's the, the overall as I think it's actually closing the loop. And from, like doing business and being paid is part of this loop. It's not, you know, it's just one step in the same way, like sending a quote or sending out a contract or delivering the service is also part of this loop.

Alex Louisy: 26:04

But this loop is like the closing one, and I think we should pay close attention to this one.

Adam Larson: 26:10

So when we're looking at, you know, using technology for B2B payments, is there a certain payment that people prefer over other ones? Is there one that you see that is more effective than others? Like, what have you seen in the data?

Alex Louisy: 26:20

Yep. So I think that this is really, really clear and the, the, the report showed like a lot of details, but if I need to summarize, all online payment method and specifically payment method that allow you to charge your customers are the most effective as vendors, right? So it's really this idea of like, is this push or pull in the sense of, as a vendor, am I pulling money from my customers? Because I charge a car, because I charge like an ACH like mandate. Or am I waiting for the customers to push money to me?

Alex Louisy: 26:54

Right? So that's the other way around. And I think whenever you wait for them to push, it's not that they don't really want to pay you, but just think about this, right? I send you an invoice, Adam, and I say, well, you received this invoice today, but it's only due in 90 days. So now Adam needs to remember or has a system to just make sure that in 90 days, the payment is being triggered.

Alex Louisy: 27:15

And so many things can happen, right? Of course, you can forget about it. But if there's any issue, if there's any additional validation needed, if, you know, all of the steps make it really, really unlikely that like on 19th day, you're going to just make that payment exactly on the due date, right? And so whenever you have a payment method that is online, that allows you to charge your customers, that makes it like way, way easier. Now, what do we often hear from, you know, the market and specific customers, everyone says, well, I want to keep control of my cash flow, so I'm not going to do that.

Alex Louisy: 27:49

Right? But this is exactly same as for us in the consumer world when, you know, I have my credit card on Spotify or Netflix. Right? The reason why I have my card there and Netflix can charge my account every month is because I still have control, not because I control the payment method, but because I control the product. Right?

Alex Louisy: 28:08

I can go in the product and say, well, I want to come sell my subscription. Right? So I would really invite people to think about this in a sense of how can I give customers a possibility to still retain control while having a payment method on file? Right? And it's not that easy.

Alex Louisy: 28:24

It's like you can do this in a product where you say, well, I have a payment method on file, but I also have an interface where on a where I can just go and say, I have 5 invoice outstanding. 4 of them are totally fine, but this one, I disagree and I wanna discuss, but, like, not paying that invoice. Right? If you can provide them with this interface where they can control this, then they're way more likely to give you a way to charge their account. Right?

Alex Louisy: 28:48

Because again, as we said earlier, they wanna pay you. Right? Because they want the services. They want a good relationship. And so what we've seen in many, many times is for 5% or let's say, like, a, like, a random number, but for 5% of invoices that I will not want to pay because I wanna, you know, I wanna, raise a claim or I have an issue with this invoice.

Alex Louisy: 29:11

Because I don't have the technology to do so, for the 95% others, they are totally fine. I'm still going to use that legacy payment method that is in the form of a manual wire transfer or, you know, that I'm gonna initiate myself. So this is the thing that we're trying to kind of like have people think about is how can I give them the technology for me as a vendor to charge them while leaving them the control? Because in that case, you have a much, much better rate. The other thing that you have with online that, you know, is often unnoticed because this is a pure back office function is the cash application process.

Alex Louisy: 29:44

Right? This idea that you need to reconcile a payment with an invoice, and this is done manually or with a software, that is kind of, like, helping you doing so is a total nonsense in 2024. Right? Like, is there someone at Amazon just, you know, matching, like, $9.99 with the payments that we made? Of course not.

Alex Louisy: 30:06

Right? And this idea that, like, there is a disconnect between those two objects is from our perspective does not make any sense. Right? So if you can also use an online payment method where when the payment is being triggered, you know exactly what is being paid so that you can actually reconcile and write that back into your system, effectively doing this cash application automatically. Then this is also a big, a big, we've seen that a lot with high transaction volumes type of businesses.

Alex Louisy: 30:32

If you have millions of transaction a month, you have no other choice. Right? Usually, you have to implement something. But for people that do, like, a 1,000 invoices, you know, we often see them, like, having someone coming in the office every day, opening up the bank account, opening a DRP, and just manually doing this before they can chase. This is also a step that is often like overlooked that people should be looking at because online payments also brings this kind of like capability where you can save time, reduce errors, and in general, like improve the efficiency of your business.

Adam Larson: 31:04

Yeah. I mean, that's a big time. You make it easy for your customers. They'll move forward. You make it easy for your back office team.

Adam Larson: 31:11

It it it's a win win on both sides. You know? And I love asking you this question to people, especially organizations like yourself who are are in there working within in technology and trying to see what's coming forward. What do you look at when you're seeing when you're looking into the future? What excites you?

Adam Larson: 31:26

What innovations excite you about, you know, what's coming in the future years as you you look to improve this process even more?

Alex Louisy: 31:33

Yeah. So I think overall, what is really exciting, but also, like, quite surprising is the fact that, like, we're really, really at the beginning of the curve. Right? Still, like, you know, when you think about 40% of the transaction still done by check-in the US, and the vast majority of this, all of them being offline, it's insane, right? It's 2024.

Alex Louisy: 31:54

Everyone is getting excited about AI. Like 3 years ago, everyone was getting excited about blockchain, and that's amazing. But suddenly when you sit in your chair as a finance person, as you said, you're a consumer as well. Like you have an iPhone or like a smartphone in your pocket and everything, but suddenly having to deal with these processes is crazy. Right?

Alex Louisy: 32:13

And it's nonsense. And very few people realize that, right? So what I think is exciting is that the change is going to occur in the next couple of years, in the next couple of decades. There is no way that, like, we sit here in 2050 and, you know, I'm just collecting a check-in the mailbox, right? So I think this is exciting that the change is happening.

Alex Louisy: 32:31

And why is this exciting? Because I have a, I have a deep conviction that like businesses that will be ahead of the curve, right? The early adopters of like this technology will literally take an advantage over the competitors in this space, right? And I think that's something that is important to you to realize. Now, if I just move away from just this, realization of like the current market and where it's going, the one thing that I find really exciting in this kind of change in B2B payments is the fact that like, it's going probably going to incorporate like the customer experience and payments is going to kind of like redefine and be part of like redefining the customer experience.

Alex Louisy: 33:08

Right? What is what I find really interesting is that I've seen heard so many CFOs and so many leaders telling me like, well, we do everything really nice, right? When we prospect customers, when we onboard them, when they sign a contract, when they use our services, but suddenly when they have to pay, they have a miserable experience. Right? I've heard that so many times.

Alex Louisy: 33:29

And that's true, right? When you get like invoices and you don't even know what you have to pay and it's buried in your inbox, and then suddenly you get those horrible automated email telling you that you haven't paid. Sometimes you've already paid. All of that is a miserable experience, right? And what I find exciting in this kind of like upcoming change in B2B payments is that I really believe that like finance leaders will start thinking about this as well.

Alex Louisy: 33:53

This is part of the customer experience of people interacting with our company and buying our services. Payments will be part of it, right? And to your point earlier today on when you were talking about the role of the finance teams and not being siloed and, and everything, what I find really interesting is that as a finance leader, I can now position myself as literally like same as the marketing person in some ways and say, we want to improve the experience and the brand and the perception that people have and customers have of our business through payments. And I think this is really exciting and really something that is very different from like the vision that people had from Bernstein's a couple of years ago when this was just all about like looking at the past, crunching numbers and not really being part of the business. I think this is something that is really, really interesting to you to consider and position ourselves as finance leaders towards this role rather than a back office role.

Adam Larson: 34:53

Well, Alex, I just really appreciate your insights and just thank you again for coming on the podcast.

Alex Louisy: 34:58

Thank you so much for having me, Adam. It was a great chatting with you.

Announcer: 35:03

This has been Count Me In, IMA's podcast, providing you with the latest perspectives of thought leaders from the accounting and finance profession. If you like what you heard and you'd like to be counted in for more relevant accounting and finance education, visit IMA's website at www.imanet.org.