In this third year of CFO’s Tech Companies to Watch, we found a notable shift in the applications being offered by vendors. In every functional area of the companies that made our annual list — process management, recruiting, travel expenses, receivables management, and compliance among them — the goal is unearthing the real story behind the data to make more intelligent decisions.
The entirety of the list appears in the April/May 2019 edition of CFO magazine. We are revealing the first 10 companies on CFO.com, one per day. Our first three tech companies to watch were FortressIQ, Behavox, and Completed.com. Today, we look at YayPay, an accounts receivable automation solution.
The idea for YayPay crystallized for serial entrepreneur Anthony Venus when he was still in the thick of running London-based Meridian Equity Partners.
“We had a long list of accounts receivables [AR] outstanding and we didn’t have an automated way to get them resolved,” he explains. “I looked around the office and realized we had great sales and marketing software and all this automation in the front office. But in the back office and finance, all we had was an ERP system. It was great, but it was simply a record-keeping system that didn’t automate very much.”
After selling Meridian in 2014 and taking a year off, Venus—with the help of YayPay co-founder and chief technology officer Eugene Vyborov—started working on a solution to a common AR problem: getting paid on time. The two took the scaffolding of their idea to TechCrunch’s Startup Battlefield contest, and made it into the finals, which further solidified their resolve.
“We looked at the entire order-to-cash or credit-to-cash cycle—credit assessment, invoicing, collections management, payments, cash applications and the analytics surrounding that whole process,” says Venus.
The pair started with automating communications—setting up various workflows with different kinds of messaging. The YayPay software-as-a-service collections offering, designed for companies handling up to 500,000 invoices per month, is simple but elegant. Once an invoice goes into the system, AR can set parameters around automatic communication. For instance, a payment reminder can be emailed 14 days after invoice creation. If the email isn’t opened after five days, another trigger alerts finance to give the customer a call. If the customer doesn’t respond, responsibility for the unpaid invoice shifts to a manager. Since all of these steps happen without human intervention, invoices are less likely to drop through the cracks.
In addition, an analytics component coupled with machine learning helps users understand which customers are most likely to pay and when, making cash flow easier to predict, says Venus. Employees can be three times as productive as they would be using traditional AR tools such as spreadsheets and email, Venus claims.
Every invoice goes into a single dashboard, which shows real-time days sales outstanding, payer trends, and collection activity, among other data. This information is aggregated so the AR staff gets a prioritized list of accounts and customers for collections. Customers are rated on an A through F scale based on historical payment data and the amount of outstanding invoices. This, along with other collections information, is available to sales, potentially helping improve customer service and the overall sales cycle, says Venus.
“We have sales users [of YayPay] and they’re interested to understand if the customers that they have sold to actually paid,” Venus says. It avoids disagreements with finance later on “when they find that the customer hasn’t paid. We’re able to loop them in early on in case finance needs their cooperation to give customers a nudge.” Customers benefit from YayPay too because they can pay their invoices by credit card or ACH through the service’s customer statement portal.
YayPay, which officially launched in 2017, is integrated with a variety of ERP, billing, and customer relationship management platforms, including NetSuite, Sage, Quickbooks, and Salesforce.com.
Venus says YayPay has lots of room to grow. “Right now, penetration in the accounts receivable automation software market is only 5%, with 95% of organizations using spreadsheets and people. Ten years from now when we look into the back office it’s going to be a very different place.”