The Importance of Accounting Automation Software

Accounting automation software — Why Accrualify sets out to automate the whole procure-to-pay process, including accruals.

There are lots of accounting automation software options out there. Most of them automate the same processes without ever innovating or adding new functionality. With lots of focus on cloud-based accounting automation software innovating the finance department, why are so many FinTech companies ignoring the elephant in the room: accruals.

This podcast delves into Accrualify’s conception and why our CEO, Ben Portusach, felt like it was time to truly automate all procure-to-pay processes with a new type of accounting automation software.

Key highlights:

I asked controllers, VP finances who are my peers in addition to what would be a tool that they would be interested in using.

9 out of 10 of them told us accruals are where they’re having a lot of issues.

And since then we’ve been launching additional modules. Refining the tool.

And being a consultant/ accountant/ business person, I’m able to take what the companies are telling us their pain points are, understanding their financial processes, and then developing a solution for it. And that’s what we’ve done with Accrualify.

Full Transcript

Alright, then let’s start at the beginning. Let’s talk a little bit about you. Your background? What brought you to finance. Where your career started? And how, what’s your specific journey from, let’s say, graduating middle school to becoming the mind behind the Accrualify.

Oh wow, that’s pretty early on. But, so I’m a bay area native, born and raised in San Mateo. So that’s pretty unique. And went to Santa Clara University, studied finance. Left Santa Clara with a typical Santa Clara type job. I was working for a company called Ernst & Young, which is a big 5, or a big 4 accounting firm focused on technology and life-science companies.

Kind of a boring, boring vocation.

Left Ernst & Young to work for a company called Bluecoat Systems; helped them with their, kind of, SEC reporting and internal audit and typical accounting type stuff. Left there after about a year to start a consulting firm with some colleagues from Ernst & Young and we started doing just consulting, and it kind of just spun off into a very specialized field called equity consulting for financial technology companies. And that did well for us.

Did that for a couple of years, and it pivoted into our first, my first software company which is a company called Option Admin. And we focused on stock ledger systems; so like stock options and cap tables.

That did really well for me personally, as well as for the company as a whole. We were able to land big customers like Airbnb, GitHub, Kabam, Pier Stories, Nutanix, to name a few which are big, big name companies. And we ultimately got approached to be purchased and myself and the other co-founders decided to sell.

Selling to competitors isn’t necessarily the best because they integrated our customers into their system and kind of dissolved the company. So they really care more about our company list, our client list, and some of our technology, but not all of it.

So everyone kind of just dispersed and went their own ways, the Option Admin team.

I stayed on for a year, and after that started thinking about what my next move was.

I asked controllers, VP finances who are my peers in addition to what would be a tool that they would be interested in using.

And 9 out of 10 of them told us accruals are where they’re having a lot of issues. So that is the resulting… you know, Accrualify came out of that.

And we were, I’ve been head down coding with my engineers and teams since September 2015, we launched the product in April, end of April with our first beta customer. And since then we’ve been launching additional modules. Refining the tool. And now really focused on our business development and landing new customers. Our goal is by the end of this year, which is in the next 3 months, we’re looking for anywhere from 10 to 25 customers coming onto our platform.

You know our conservative goal is 10, and we think that we can definitely reach that. The enterprise lifecycle has been a little bit longer than you would with a consumer, but you know it is what it is.

And we’ve been scoring some great press. We’re definitely onto something that other companies don’t have, and you know our team is very solid. We’ve gotten some of the old Option Admin team together and we’re able to get some great people to come on board. We’re just taking a long step. And that’s where we’re at now.

Excellent. So you mentioned in your research with controllers and financial brains, they mentioned that the accrual process was one of the most challenging. Now I got to imagine when you create any piece of technology, it’s a dauting task. But here you are with actual dollars in a very important component of business; the financial aspect of it, and the accounting aspect of it. What, how did you, how did the idea for Accrualify blossom? Like, I mean, once you found out there was a desire for something out there, what makes you decide as the mind behind all this to kind of go, ‘that’s the way we’re going to go’. Besides, the dollars and so forth, were there any sort of personal situations from your past that you look at and you go, ‘If I had had the system back then, it would’ve made a difference’.

Yeah. Well if for a couple of reasons, I mentioned that I had a consulting firm. So my experience on the consulting side is billing. That’s one of the more, to use your words, it’s one of the more daunting tasks as a consultant and owning your own practice is how your bill your customers. A lot of the times your billing cycle doesn’t correspond with the customer’s month-end close. So what they’re doing is their pinging you with these emails, and sometimes depending on how large your customer base is you could get, you know hundreds of emails from these companies asking you for an estimate of bills or services you provided them but have not been accrued.

And so with that being said, you know, it came from my experience with the former customer. You know I’ve had this type of experience in the past.

Then listening to these controllers, these VP of finances; they’re experiencing the same situation. They put the process in the hands of AP clerks who reach out, and it’s a very manual process. Because I’ve had that experience in the past, and then understanding how it works currently. It really hasn’t been any technology, technological advances in that area.

So one of the things that we did is we understood the problem, first of all. Then we understood what it would take to solve the problem. And we felt we were up to task based on our previous experiences and our knowledge of the industry right. Me having a CPA and being a financial person, I understand this process, I understand the spend. Or what’s the term the ‘Procure to Pay’ process. And able to apply my experience as well as what’s currently out there in the market and understand the process to develop Accrualify. It’s kind of how we ended up where we’re at right now. Understanding what the needs are, experiencing it in the past from the vendor’s side, and now listening to the purchasers and what their problems are.

So we actually have a of couple tools. Our solution is modular, in that we have different bits and pieces that we can implement for each customer. And right now we’re focused on the purchaser, meaning the company that’s managing their vendors.

We also have another module that is, we call it Vendor Pro, which it actually helps the vendors manage their customers. So we’ve got a pretty unique solution in that it’s not just focused on purchasers managing their vendors, but we are also focused on vendors managing their customers.So it’s an ecosystem. And it leverages off of our experiences in the past and also understanding our customers’ pain points.