One Exec On Escaping Accounts Payable Hell
Touch of Modern COO and co-founder Jonathan Wu used to love handling payments for his suppliers. It showed him just how fast his company, a well-curated shopping site for men, was growing. (Sales hit $100 million in 2015, just its fourth year.) “But it got really tedious really fast,” he says. “I was blocking out a whole day each week just to process payments.” So he started looking for a fully automated system that would free him up to focus on building his business.
Touch of Modern sells designer goods from around the globe, which makes paying vendors a challenge, given the cross-border payment channels, tax regulations and processing nuances involved. So in 2012, the startup began using Tipalti’s cloud-based accounts payable platform, which allows Touch of Modern to process international payments using multiple methods and currencies, all while complying with tax and regulatory laws. Once signed on, a supplier just needs to submit invoices to the platform, and the system handles the rest.
Integrating Tipalti with Touch of Modern’s mostly internally built systems went “very smoothly,” says Wu. Since then, Tipalti’s platform has easily handled a spike in the e-commerce site’s payments to vendors -- from 2,000 in 2013 to 12,000 in 2015 -- and cut the time Wu spends on them to about 30 minutes a day. The fees and labor costs per payment have dropped from about $10 when Wu processed them manually to just over $6 today. What’s more, Touch of Modern hasn’t had to hire an accounts payable team.
Related: 3 Steps to Avoiding Late Payments
A second opinion
Given their scalability, cloud-based accounts payable platforms work particularly well for companies anticipating fast growth, says Adam Boyce, an IT strategist with Panorama Consulting in Denver. The biggest benefits, he adds, are the ability to deploy payment processes across multiple business locations and the increased availability of data to help make key payment decisions.