Your Accounting Costs Are Too High And You Can Fix That
(This post originally appeared on Forbes)
“The Age of Men is over. The time of the Orc has come.” Can you tell I just watched all three Lord of the Rings over the weekend? So I’ve got that quote on my mind. Particularly when it comes to the accounting staff at many of my clients. The age of the accounting staff is definitely over. The time of accounting technology has come. Your accounting costs are too high. And you can fix that.
This isn’t about accounting software. It’s about the latest services that automate the data entry process. For decades we’ve employed staff to enter information into our accounting software so that we can pay our bills and get paid. It’s been an ingrained part of our overhead. But this is changing rapidly. Scanning technology has matured. And so are the innovative, cloud based services that are eliminating the need for human data entry.
These technologies work in a very similar (and simple) way. Instead of your suppliers mailing you their invoices you ask them to e-mail the document as an attachment to a unique e-mail address provided. Once the invoice is received, the document is scanned and filed. Today’s scanning technology has become much more intelligent about recognizing data from just about any format, particularly dollars, dates and headings. The information is extracted and either synchronized to your accounting software (assuming you use the popular brands like QuickBooks, Xero and the like) or sent to you via CSV or spreadsheet.
Who does this? I like these three companies.
Receipt Bank. Its history going all the way back to 2010, this London company has established a strong presence in the U.K and New Zealand and has seen significant growth in the U.S. Pricing is just $25/month/company for 50 vendor invoices and up to $220/month/company for 675 items with additional plans available. Receipt Bank has a “fair usage” policy where even though monthly and annual limits apply, the company states that the limits are not “set in stone” and vows to be as flexible as possible.
Entryless. Headquartered in Menlo Park, Calif., and with a CEO recently named one of the “13 Badass Immigrants In Technology,” Entryless is the Americanized version of Receipt Bank, powerful and growing, although a little less mature. But Entryless is much less expensive – it’s free for the first 300 bills processed per month and then only $10 for each additional 300 bills.
Bill.com. By far, the most well-known of these services, Bill.com has been around since 2006 and is backed by well-known venture capital firms such as Emergence Capital, Icon Ventures and Silicon Valley Bank. The company claims more than 600,000 network members and $19 billion in payments processing per year. The service adds capabilities far and beyond what both Receipt Bank and Entryless provides, including payments processing and integration with more accounting systems. Not only that, but the service has a full-blown accounts receivable management offering where you can enter your data and it will send out invoices directly to your customers, collect payment and support recurring invoices and reminders to overdue customers. All of this comes with a cost, and Bill.com is the most expensive option of the three. Just the accounts payable service with accounting integration costs $29/month/user (and remember those users can add up if many people are involved in the approval process).
In addition to extracting data from scanned invoices sent to a unique e-mail address they provide, all three of these services also give you the ability to snap a photo of an invoice on your smartphone and have it automatically sent for processing. They also provide varying levels of workflow and approval management. They give you the ability to tag invoices so that amounts are classified to the right general ledger account automatically. They support major foreign currencies and allow you to share your data with your outside accountant.
Of course, like any cloud based system there are risks. No one can claim to be 100% secure. Downtime or bandwidth can hinder processing speed. E-mail issues are always possible. And the data that’s scanned, though mostly right, will still need human approval because no software is perfect. Then again neither are humans. The clients I know who use these services are finding them to be a much, much less expensive alternative to someone doing the data entry.