Hi, guys, welcome to the Fintech Coffee break. I’m your host, Isabelle Castro. This week I shared my coffee break was Steve Smith COO at Esker.
Esker is a global cloud platform and automation solutions company driven by AI. We focused on the explosion of invoice-to-cash and how automation of the procure-to-pay cycle using AI is essential in improving the productivity and sustainability of businesses.
Isabelle Castro – Hi, Steve, how are you today?
Steve Smith – Good, how are you doing, Isabelle?
Isabelle – Good. Good. It’s nice to have you on the show. So, to begin with, I’m going to ask you what gets you up in the morning?
Steve – Well, actually, it’s probably my dog and my wife because they get up at 5:30 every single morning, so they’re the ones that wake up. But then after that, it’s just I love to work. I love to start doing things right away. I’m definitely a morning person more than a nighttime person. I’d much rather go to bed early, get up, and get started during the day, than stay up too late.
Isabelle – Okay, I feel you on that one. So you’re the COO at Esker, what brought you to Esker?
Steve – Well, strangely enough, I’ve been involved in something related to documents for my entire career. And I was living in South Florida, working for a company for work there for 17 years, and decided it was time for a change. And with the strange behavior that I have, I decided to move to Wisconsin from South Florida. Now I was born and raised here. My wife was as well. So that was a reason for coming back. But Esker happened to be located in Wisconsin, and because of the automation of documents, it just was a natural fit for me to come to work for a company like Esker at that time.
Isabelle – Okay. Yeah, so, as you said, Esker is focused on automation. What are some of the technologies you implement enhanced processes for your clients?
Steve – Sure, we focus on the entire cash conversion cycle. So that’s really when you look at a company, they’re usually creating goods and services that they are trying to, in many cases, sell to their customers, so they have to receive orders. Then those orders have to be fulfilled, and the invoice is going out and receiving payments. So that’s the order-to-cash cycle. And then, of course, they need to also operate their own business by buying goods and services, and they need to pay for that. So we also automate the procure-to-pay cycle, which is heavy on the procurement, and then, of course, the accounts payable side of it. So we’re really automating that entire cash conversion cycle for our customers.
Isabelle – Okay, sounds great. And what are some of the trends that you see exploding in the next few years?
Steve – AI is the thing that’s exploding right now. And it couldn’t come at a better time. Because when you really look at it, it’s not just about automating repetitive tasks. But it’s also about, you know, making suggestions and how to improve productivity. And I think the technology has come a long, long way, and how it’s been able to adapt within organizations and really provide true value to them. And with companies struggling to find workers, they need to try to remove as many of those obstacles that are slowing down the business overall, where they can do more with the existing employees they have and really provide those employees with a more meaningful and impactful way of doing business. Because let’s face it, an employee does not want to spend their time doing a lot of manual tasks, it’s not fulfilling.
The goal of our solutions is to really try to find a way to provide them with something that is more fulfilling and impactful to the organization. And by doing so, that’s going to help reduce, you know, the day sales outstanding and the cash conversion cycle. And overall, it’s going to improve the working capital in an organization, so that’s it. Everybody should win in that scenario.
Isabelle – So, an area that you guys particularly focus on is invoice to cash. Why the focus here specifically?
Steve – Well, invoice to cash is all about working capital, and working capital is the lifeblood of any organization. Unfortunately, what we’ve seen in the last few years here is that the financing of that working capital has more than doubled in cost with the rise in interest rates. It’s becoming increasingly difficult for many organizations to actually get approved for loans to keep their working capital strong. So it’s important for companies who are looking to automate their invoice to cash to focus on that working capital by lowering their credit risks with whom they’re doing business with really optimizing their invoicing. And it’s not just sending out an electronic invoice, but it’s making sure that that invoice is compliant with local regulations and also that it matches what the customer’s preferences are for receiving an invoice so they could process it faster.
You want to accelerate the payment as well, sobriety payment tools. Maybe even discounting and financing options for their customers can help improve the cash cycle. Really allocating that cash faster to just because you’ve received the cash, you now need to know where to allocate that. And sometimes there are discounts or disputes that have come in that need to be resolved as well. So really, taking all that into consideration can help lift the working capital in an organization and help prevent them from having to go out and finance more of that.
Isabelle – Okay, and are there any challenges involved in kind of implementing that?
Steve – Yeah, there certainly are a lot of challenges because it really needs to adapt to both what the company is looking for, that is, providing the automation, and what their customers are looking for.
If you’re automating a process that is not benefiting your customers as well, at the same time, you’re just automating a bad process, and you’re not really helping the overall cash conversion cycle. And one of the areas that we’re told when we provide automation, especially with the invoice to cash, is that the visibility that they suddenly get into this very complex process is overwhelming.
I mean, most companies are not looking to, to solve a problem with an invoice to cash to gain visibility. That is part of it, but it’s not what they’re initially looking for. But it’s rare that after we’ve automated a solution for a customer, that they’re not coming back and saying, Wow, it’s the visibility that has been the greatest gain from all this- I now have a firm grasp on what is going on. And this extremely complex issue within our company, and it’s making a big difference. And it is providing, again, not only our customers’ value but providing their customers’ value.
Isabelle – Yeah, it’s great when you can provide these benefits that maybe your clients don’t know are benefits.
Steve – Exactly, exactly.
Isabelle – So, what kind of impact does complete automation, like I2C and other automation, have on larger-scale issues outside the business?
Steve – Anytime you can reduce the time and effort to complete a task, you know, with good tools, especially in the hybrid working environment that we’re seeing today, can provide a positive impact on the environment.
I’m looking outside right now, we’re having a major snowstorm today. And over 70% of our office is out there working remotely because they don’t want to come into the office today, and I can’t say that I blame them. But we’re operating as efficiently as if everybody was here. And it’s good because that is having an impact on the environment to because obviously, people didn’t spend the effort and time that it takes to get into the office that day. It is helping to improve the environment in that regard.
Also, our solutions are provided on a multi-tenant cloud platform, and anytime you’re using shared resources, there is a sustainability issue that is a benefit from that, I should say by reducing the carbon footprint overall. So we take that really seriously; we were back when there was more paper involved in the invoice to cash, the big talking point was, you know, saving paper, saving trees. And that still is true to this day. But we really are now seeing other sustainability benefits from our solutions that are carrying over, as I said, especially when you start talking about the hybrid working environment.
Isabelle – Yeah. Have you noticed any kind of huge acceleration or huge growth in interest for this kind of automation angle since COVID? Has that been a catalyst for it?
Steve – COVID was a huge catalyst for it. I mean, for about two months into when COVID started, you know, a lot of things pretty much shut down.
Suddenly, we started receiving two types of calls, one from customers who had already gone with automation with us, thanking us for having a solution that now allowed them to work remotely. And then two from the customers who delayed automation saying, I need it tomorrow, I need this now. I can’t survive in this working environment that we see with COVID, where nobody’s coming into work. We need to have something to keep our business running.
We actually grew at a faster pace during the COVID times than we had ever seen before. And that’s continued to go on, as we see now new challenges that are we’re everybody’s facing today.
Isabelle – Okay, how quickly is it for you to deploy some of these processes?
Steve – A lot of it depends course, on the customer and the people that they have available to help with that deployment because we do still need help from their side, from the business side, to make sure we completely understand their process. We’re automating the right components, and then too from their IT staff.
But in reality, we’ve had some implementations go as short as two weeks, and some take months, depending on, again, their availability and the amount of, of items they’re looking to actually automate.
The other thing that’s very important, too, in our solution is the integration with an ERP solution or whatever ERP they may be using. And in some cases, that’s multiple ERPs because they may have acquired other companies and they have multiple ERP solutions. So that integration into that, because really, that’s this, the source of where information needs to lie, is in their ERP, we need to make sure we have tight integration with that.
Isabelle – Yeah, I can see how you would need that. I was interested to see that only 13% of businesses currently have fully automated processes. Why do you think that is?
Steve – I know that was particular to the entire order-to-cash cycle. And I think they were talking about where the entire order-to-cash cycle was completely automated. So I think it’s a lot greater than that when you look at the components that are built into the order to cash cycle because it’s made up of a number of different pieces.
A lot of companies have picked some of the, I would say, low-hanging fruit for apps to automate first, like invoice delivery. For many companies, delivering an invoice electronically is not that hard. You could do that with your ERP solution, in some cases, so they are automating bits and pieces of it.
The other challenge, though, that I noticed, and I’ve been doing this for quite a while, is that we used to go out and talk to especially accounting folks about automating their processes. Five to 10 years ago, we received blank stares. They would say to us they go there’s no way I’m going to get the budget for automation because we’re looked at as an expense item. And that’s all we were here to do. But smart companies now have realized that the accounting department for both the accounts receivable and accounts payable side plays an extremely important part and the bottom line with the company by improving their day sales outstanding, their working capital. And now, the importance of automation is growing because of that. Because, you know, smart business leaders really understand the value that the accounting department brings to the bottom line. And having the most efficient accounting department possible is going to make a big difference for them.
Isabelle – No, definitely. Where do you see automation going in the next ten years, and do you see any roadblocks to that happening?
Steve – Oh, I think automation is going to continue to grow, especially with AI and the different technologies that are out there. You know, I think there’s always going to be a few roadblocks along the way. I think some people are even a little bit nervous about where AI may be going. I read an article just the other day that some people are worried about it taking over and taking too many jobs away. I don’t believe that. I just don’t think that it’s, at least not in the foreseeable future, where it’s going to really cause those kinds of issues within an organization where it’s taking over too many jobs.
We’re finding, again, that the technologies that are out there today are improving the lives of the workers that they’re helping automate because they are finding their jobs more fulfilling. And they’re doing more. They’re doing tasks that are far more valuable not only to the company but to them as an individual. And that technology is also helping their customers. So the customer experience is greater. So they’re getting better feedback from the customers that they have to work with. The relationship is stronger because of it.
So really, it’s a positive sum growth game where both sides are winning in this case. So the challenges will be there. Yes, there’s going to be some, but I really believe that the benefits are going to outpace that.
Isabelle – Again, I can see what you’re saying. I’m a big fan of AI, I realized that there are a lot of difficulties that still have to be ironed out. But yeah. When is making people fulfilled? I don’t think you can go wrong, can you?
Steve – Right, I agree. Totally agree.
Isabelle – So we’ve got one more question, which is your curveball question, which I picked at random before the interview. You got, Oh. You got a good one. If you could have one superpower, what would you choose?
Steve – From a personal perspective, probably the ability to fly. I have I’ve been skydiving before. I’ve gone on zip lines where you’re basically hooked from the back, and you feel like you’re flying. And for me, that is the ultimate rush. Yeah, we’d love to give you the answer, like solving world peace or something like that. But if I’m being selfish, I’d love to fly.
Isabelle –Well, it is great. That would be up on one of my top three for sure. Yeah. So before you go, how can people get a hold of you and follow you?
Steve – Certainly, they can. Anybody is free to email me at any time at Steve.Smith, which is about as easy to spell as you can get, firstname.lastname@example.org. And I know I’ve got Twitter and I’m really not the person that’s doing most of my tweets, but I’m out there. And so yeah, I’ve got LinkedIn, Twitter, all that you can follow me on that, or you can contact me that way.
Isabelle – Okay, great. Thank you so much for coming on. It’s been nice to talk to you.
Steve – Thank you. I enjoyed it. And if there are any other questions you have, please don’t hesitate to let me know.
Isabelle – As always, you can reach out and chat with me on my personal LinkedIn or Twitter on @IZYcastrowrites. But for access to great daily content, check out Fintech Nexus on LinkedIn, Twitter, Facebook or Instagram. You can also sign up for our daily newsletter bringing new straight to your inbox.
For more fintech podcast fun, check out the website, where you can find more fascinating conversations hosted by Peter Renton and Todd Anderson.
That’s it from me. Until next time, enjoy your downtime.
Isabelle is a journalist for Fintech Nexus News and leads the Fintech Coffee Break podcast.
Isabelle's interest in fintech comes from a yearning to understand society's rapid digitalization and its potential, a topic she has often addressed during her academic pursuits and journalistic career.