billFLO: an old idea that keeps coming around

billFLO wants to take the drudge out of processing invoices between systems by making invoices machine readable. This is an issue that surfaces every now and again but has sop far proven elusive to crack. billFLO makes the claim that:

Vendors simply email computer-readable billFLO invoices to customers who, in turn, use billFLO to instantly import the electronic invoice into their accounting systems.

You have to be very careful reading that claim because it is not ALL accounting systems but the ones with which the company has partnered namely Freshbooks, Harvest, LessAccounting, Blinksale and Quickbooks. The company implies this accounts for some 23 million small businesses (mostly in the US.) I have no way of knowing if that figure is correct although Intuit claims to have 50 million people in its customer orbit across all product lines.

The way it works is that both ’sides’ of the transaction need their version of billFLO (buyer or seller) in order for the system to work. Sellers generate an email to the customer who in turn is able to automate the input, thus avoiding re-keying errors. This is not a new concept but is a welcome move in the on-demand space.

The ideal scenario is where invoices seamlessly flow between buyers and sellers, much as happens with EDI. Ben Kepes at CloudAve uses this as a reason for emphasizing the role OAccounts might play. I have severe doubts whether the industry will plough that particular furrow. All past attempts have failed because a single data standard at the transaction level renders all vendors vulnerable to fast switching between applications.

However, getting the bills between systems is barely half the battle. Invoices still need checking for correctness. Without a corresponding automated purchase order system, that’s nigh on impossible.So while billFLO is tilting at the problem from the time savings perspective, I wonder just how much total processing time is really saved.

A much bigger win occurs when businesses are able to automate the handling of bank transactions. Xero has done a lot of that work for the NZ market. I believe they got a bit of a shock when they turned up in the UK and found out how disparate the file formats for the UK banks turned out to be. Or rather how relatively tough data exchange in the UK can be.

Even so, billFLO should be commended for endeavouring to fill a need,especially as it is acting in a vendor neutral capacity. The claim that:

Each year nearly 20 billion paper invoices are exchanged between businesses at the price of nearly $30 billion in lost productivity. billFLO completely eliminates paper invoices by electronically connecting both the vendor and customer accounting systems.

…seems reasonable. I deal with many organizations and the amount of legwork needed to get invoices in and out of systems is horrendous. As Sunir Shah at Freshbooks says:

I believe that sooner or later all invoices will be machine readable, but I’d prefer sooner.

Amen to that.

Tagged as: Accounting, billflow, FreshBooks, xero