Tipalti hosted the first stop of the Payables Nation: Finance Transformation Tour in Palo Alto on March 14, 2018, featuring Docker Controller, Dash Victor and SmartShoot Head of Finance, John Pfeister. This is the full video of the panel session where the two discussed their transformation strategies.

Tour Dates

Transcript

Craig: So, formal introductions. Dash Victor’s the financial controller for Docker, and John Pfeister is head of finance for SmartShoot. Gentlemen, thanks for joining me today. Where are my questions? Sorry, all right. Can everybody hear me in the back? Awesome, great. Gentlemen, thanks for joining us today. Thanks for being a Tipalti customer, of course. Both of you have had long, distinguished careers at a lot of, a few different organizations. I’m sure you’ve seen the role of finance evolve in your time. I was hoping I could get each of your perspectives, well, actually, first, do an introduction for yourselves. Then, maybe talk after introduction about the role of finance, how it’s changed for each of you in your organizations, and where maybe you think it’s going. Is that okay? John, maybe we’ll start with you.

John: Sure, my name’s John Pfeister, head of finance for SmartShoot. Started out in investment banking. I moved out here and got into startups. The way I have seen the role of finance changing is, finance needs to start becoming more invisible. People want to focus on what adds value to their company. They don’t wanna have to worry about any other part of the process breaking down. They wanna make sure vendors are gonna get paid on time, they wanna make sure that there’s enough money in the bank. Any tool that you can use to help automate that process, and make that process more secure, I think is the main goal of finance now. Focus on the product, focus on growing the business. Don’t let your management team worry about the finance part of the house.

Craig: Nice, thank you. Dash, please.

Dash: Hi, everyone, morning. I’m the controller at Docker. Been there about two years. The company’s Docker, not Dockers, the khakis, although we sometimes do get their mail, which is quite funny. Docker, it’s an enterprise software company. Basically, about five years ago started the software container movement. If you’re not familiar with that, that’s okay, but it’s essentially like VMware virtual machines on newer technology. It’s a lightweight operating system. Your developers, if you’re at software companies, can write code. They put in their apps or their websites into this container. It’ll work in any environment. You also, there’s some cost benefit to that, too, savings on AWS and those sorts of costs. We’re about 400 people now, series E company, so we’ve raised $220 million. We’re valued at $1.4 billion, so we have a lot to live up to. We’re just getting started. As far as change, you know, I think, at least for me what I’m seeing, prior to this, I was at Square and went through the whole IPO process with them. We had a pretty substantial AP team. What I’m seeing now is, you’re not getting the budget that you used to out of that VC money. Your G&A is just not getting it, right? It’s going to sales, it’s going to engineering. You really have to do a whole lot more with less, and so, each one of my people on my team, they wear many hats. We don’t have a large AP team, and I don’t think many companies are going to have huge AP teams where their sole function is literally just to code invoices day in and day out, nor do this current generation of workers really want to be doing that. They want variety, they want projects, they want all of that. There’s definitely a movement to tools like Tipalti to help operationalize that, help make that more efficient so that accounting is really no longer a back-office function. It’s now starting to get more into the finance and FP&A-type realm.

Craig: Awesome. Great answers, thank you. I think this thing I wanna point out, so, with regards to SmartShoot, we hired a videographer through their marketplace platform who’s with us today. Anyone that needs videographer-type services, SmartShoot’s a great company. You both talk about modernizing finance and the role of, how do we turn our team into taking something non-strategic, error-prone, such as coding in invoices or doing approvals, or onboarding it to more strategic tasks and things like that. Talk to me about, John, when you engaged with Tipalti over a year ago, and Dash, when it was, eight months ago, let’s say you engaged us. What were the challenges you had in the business, and how did you go about trying to solve those? Can you talk a little bit about that?

John: Sure, yeah, I liked seeing that Touch of Modern stat up there. When we launched about five years ago, our backstory was we, we used to be a company called TurnHere. TurnHere managed to get filmmakers to go shoot content for yellowpages.com. It was a very manual process. Yellow Pages would email us an order. We would then call filmmakers. We would then call clients. We’d have to do it all through spreadsheets and emails and phone logs. We raised a whole bunch of money, raised over $13.5 million, but we had this huge, huge support function. When yellowpages.com went away, that support function was supporting almost nothing. They ran out of money, and we go, there has to be a better way. There is a lot of demand to create content, but we need to figure out a scalable way to do it. At the time of yellowpages.com’s peak, we were doing about 500 jobs a month, and we had 70 people in our office. Now we do about 5,000 jobs a month, and we have 18 people in our office. My finance team went from about five or six to now just me. Instead of not growing the team, I’ve been actively shrinking the team. Every single part of our process, from scheduling filmmakers, to paying filmmakers, and to importing filmmakers and their tax information, to tax compliance, we wanna scale every single part of it. And so, when I looked at Tipalti, I was originally just looking for a way to pay creatives all over the world. I then realized that it’d also be able to help with our onboarding process, and also help with our tax compliance. It was a win/win/win for us.

Craig: That’s great, thank you, John. Appreciate that. Dash, how about yourself?

Dash: The use case for us, actually, came about largely because even though we’re only a company of about 400 people, we’re actually in eight countries and growing. We’re one of the early use cases for the multi-entity function. There really wasn’t, I looked, there really wasn’t a tool out there that you could put everything all in one, all in one software, software tool. We had software. We used NetSuite. We had software that I’d put in. I mean, prior to that, we were a small startup doing manual checks and logging into the bank and paying all our vendors that way. We put in the tool, but then, still, it was really only starting in the US. US invoices were going to one system, international was actually going, we would email it over to a third-party accounting firm, and then they’d help handle the payments for us. But, also, all the payment types weren’t available as well in the tool, so if you paid somebody via wire, for example, you have an invoice in your software tool, it gets paid via wire, you forget to mark it as paid, oh, then the next month, you see it again, it’s still open. You wire it again. We were just getting a lot of duplicate payments. All of our invoices weren’t in one place. We were looking, really for a solution where we could bring everything all together, and there’s one point of contact for vendors, one point of contact for my team.

Craig: Thank you for that. I think it was interesting, too, going to the next question. When we engaged with Docker, you were going through the final stages of a NetSuite implementation. It leads me to my next question, is like, we have a lot of priorities going on at any one time in finance and operations. How do you help mobilize your team and prepare for change, such as Dash going through a NetSuite implementation? How do we look at the risk/benefit or the prioritization internally? How do you make that case when there’s so many conflicting projects? Maybe you could each talk to that.

John: For us, we, our team is very, very focused on scale. Anything I can raise my hand and say, “Hey, I can save some hours, here,” is always gonna get top priority. But we also just saw a kind of a shift in the environment with our partners, where partners want to make sure that we are being more secure in paying creatives, especially as we moved overseas. We used to do almost nothing abroad. We’re now probably 20% worldwide last year, and we’ll be 25% to 35% this year. Partners started saying, you know, “What are doing to make sure that they’re tax-compliant? “What are you doing to make sure “that you can actually be paying these individuals?” It started getting written into our contracts. When we found an all-in-one vendor solution for that, it was very easy to make the case.

Craig: Great, thank you. Dash, how about yourself?

Dash: I mean, there’s a lot of aspects. You have to think about, what’s the impact on my team? What’s the impact on the department heads who have to approve all of the invoices? What’s the impact on the vendors and how they see you through that process, ’cause they’re making judgments on how professional you are. Prior to that, you would just email a vendor and say, “Hey, shoot me over your W-9s, “send me your payment info via email.” I mean, that’s not the most secure way. Larger vendors are gonna, they’re probably not gonna wanna just send you their ACH information just via email. So, yeah, we were definitely looking for a tool that would be able to do all of that. Largely, I think, the decision on the changed management came from us, but there’s definitely many, many aspects of even the experience for the department heads. We can talk a little bit more about that, but that’s vastly improved. Tweaking even one little thing, like being able to prove via an email and not having to have a login to yet another site for your department heads who are focusing on sales and marketing and engineering? Saving that time, it’s gonna save the approval time, it’s gonna cut down on the time that you pay your vendors. It’s all a big circle, and you just have to think about all those different aspects of it.

Craig: Interesting. Do you mind going deeper into that a little bit, just a little bit with the department head? Talk through, how was your process with each of ’em? Were you tailoring how specifically, was it a time management issue, a time savings? Was there a ROI business case you were driving internally to get that done, or was it just a conversation? How do you mobilize different decision-makers in the organization?

Dash: I mean, for them, they wanna focus on their job, but inevitably, paying their vendors and managing vendors is something that does fall on them. It’s on finance, but in the end, we don’t know exactly if this person did the work that they said they were gonna do. We need them to at least sign off on it. We just have to make it easy for them. Giving them another tool or complicating the process and having the vendor keep reaching out to them or emailing them, and having to forward stuff our way. You wanna make it nice and easy, and you wanna make each and every vendor have the same experience and have it come through my team, who knows how to triage and deal with all of those things. I mean, I think it was just largely that.

Craig: That’s great.

John: And that’s an interesting difference between our two companies. His is, “Hey, how do we make finance “the most efficient possible arm of this business?” Where for us, payments to creatives is integral to our business. That is part of our platform. When I say it’s not just going and shooting the content, scheduling the content, we have to make sure these people are paid and paid on time. That’s essentially 1/3, or maybe even 1/2 of what the process is. Being able to automate that was–

Craig: What I was finding was interesting about the economy we’re going into. You talked about your videographers. It’s the lifeblood of your business. They’re not, are they suppliers? Really, they’re almost customers or employees. How do you make them happy, how do you have it so they wanna monetize on SmartShoot’s platform? And they get the best experience, they get paid how they wanna get paid. And so, going into supplier onboarding, right? Equally, Docker, you care about your vendors in the same way in some cases. When you engage with a customer, you’re looking to do automation, and you have a big book of suppliers. There are different types of vendors. There are videographers, but then you also have SG&A spend, invoice spend, you have international spend. How has the process been taking a book of suppliers and vendors that you’ve already built through your ecosystem and onboard them to a new experience and a new platform? Maybe you can talk about that, ’cause it is so important, that bond you have with your vendors, your videographers, your payees.

Dash: I can start on that one. For our vendors, again, just mentioning the professionalism of, I mean, in the past, we were literally just emailing them one by one, and so someone on my team had to reach out directly to each vendor, find their information. With Tipalti, I think this is actually a big differentiator. If you look at other tools, I mean, we looked at Bill.com, Concur, a number of others, and I was actually really surprised that they didn’t focus on that part of it. It’s starting to become, compliance is starting to become big. You need W-9s, you need W-8s. You need all of that to do all of your reporting at year end. With Tipalti, they make it super, super easy. This is a plug for the system, but I was actually pretty surprised that it was this easy, ’cause we were trying to figure out, do we build an internal wiki site and point people there, and they fill out all the information, and they attach the W-9? But literally, with Tipalti, you get a name and an email. You mass-send it out to all of your vendors. They self-service, they click on the link, self-service type in their information through the secure portal, add their W-9 information. They have a really slick digital W-9 and W-8, if you’ve ever had to deal with questions on those. They’re basically onboarding themselves, and once they’re all set up, that gives you the go-ahead they’re good to pay. You know they’re set up properly, you know the information’s current. That was a big change for us, and we actually had people re-set-up, said, “We’re on a new tool, please re-set-up,” just so we can make sure we were getting all of the current information. Even though we had it prior in our NetSuite–

Craig: How much do I owe you for that? I’m just kidding, how much do I owe you for that? Great story, thank you very much. That’s where it starts. It starts, in my opinion, it starts at onboarding, ’cause everything past that downstream gets affected if you don’t collect the right payment details up front, if you don’t collect tax information up front. You make it self-service and you vet it, so the entire experience from there is critical. John, for you.

John: We had a slightly different process ’cause all these creatives come and work for us. They want to get paid, so they are very highly motivated to come and do the new sign-up process. We were actually looking at some companies that provided that model to, how do you capture W-9 information and bank account information, and then we realized that Tipalti did it as well. We were very grateful for that. We were actually redoing the creative side of our site. We inserted that model there, and now we just reached out to everyone and said, “Now, this, it’s gonna be the new process, “and you should actually be really happy about this, “because before you would have to fax in or scan in “your W-9 and bank account information. “That’s extremely insecure for you. “This is a protected model here. “It’s gonna be stored in “world-class style.” We didn’t have many complaints, if any, on going through that process. I love the onboarding process for the international creatives, being able to go through the tax form questionnaire, ’cause I don’t know if you should be doing a W-8BEN-E or a W-8BEN, and they’d go through and answer these questions, and boom. They’re presented with the right form. That’s made the back-and-forth with myself very minimal.

Craig: Good, thank you for that. Maybe we could talk to, now, sort of where we are today, and going forward and future-stating. We uncovered what the problem was we were trying to achieve. You both, different business models, right, and who you’re paying, right? Dash, everything you’re paying, you have entities across the globe. You’re paying everything that’s invoiced back. You wait for a vendor to send you a bill. You approve it, you wait based on the terms. Or John, you know, I don’t think your videographer’s gonna send you a bill today to pay him, right? We gotta have some type of monetization platform on the front end that collects that data, and then remits without an invoice. Maybe, a question for you, Dash, as you looked through the business model, looked through how payables has been transformed and what you’ve done, where’s the workflow state today, and maybe, what efficiencies have been created as a result?

Dash: Yeah, yeah. We mentioned the onboarding piece. That’s huge. For us right now, what’s great is literally, as part of the onboarding, we give them an email address. No matter which vendor you are and no matter which country you’re in, and you literally just forward your email to that alias. It feeds right into Tipalti, and it’s available for scanning. They actually do OCR scanning as well, if you’re familiar with that. They’re actually taking a first step at coding everything for you. That saves my team time. Most of the fields, a lot of the fields are already pre-coded. They can go in and finalize that. Then, when it gets to the payment stage, it really helps me out. I don’t have to log in to a bunch of big bank portals for wires and for ACH. All the payment methods are all in one platform, so once it gets to that payment stage, it sets up a batch. I go in and review and approve. It’s all within one system. It’s all the same process for international as well as US. That’s been the big, big change for us.

Craig: Great, thank you for that. John, how about yourself?

John: We like to pay people as soon as our clients tell us to pay people. For an example, the team that’s here today, they’ll upload all this content after they’re done, and then one of you will look at it and say, “Great, this looks fantastic,” and you’ll hit approve. Right now, that then creates an invoice in Intact, and we then have to do a bulk upload once a week and go, “All right, these are all the payments “that we’re going to make.’ Where we’d like to go is have that drop straight from our platform into Tipalti with a pay date attached to it. Then we can be paying more, instead of every Friday, we can be paying every two weeks no matter what day that you released it on. We can also start doing things like early pay that gives filmmakers a bit more control over their cash flow. We could also potentially then start doing different pay cycles for different partners. If we have a partner that doesn’t pay us until net 60, we might delay that filmmaker payment slightly because we’re being delayed by the partner. That will all come from integrating directly with your platform from our platform and cutting out Intact.

Craig: Good, excellent, thank you. Very good. Only a couple more questions, so hopefully this is beneficial for everyone so far. Great job so far, gentlemen. We tend to find that as we wanted to take on ventures like this and transform, we gotta show a return on investment. I’ve heard a lot of both potential soft savings as far as time. But is there anything in particular to each of your businesses that you’ve seen to where there’s either been efficiencies, a return on the investment you made in the partnership, or the investments that you’re making that you wanna elaborate and talk about further with us today?

Dash: Yeah, sure. I’m trying to think of some additional ones. I mean, time’s big. I had someone on my team literally spending a full day of a five-day work week going through and getting the payments batch ready. That’s shrunk to maybe an hour or so. With everything in one system, it’s really helpful for me as a controller to know that, okay, all the invoices are here, so if the auditors are coming out next week for us, we know that’s the place where we can go. Everything’s stored right there. Plus, it makes accruals easier because you know that all the invoices, international and US, are all together. You can look at your total spend, run reports out of Tipalti for anything that’s pending and sitting there open. I think it’s really just a completeness. We’re no longer have the duplicate payments issue. A lot of it is just peace of mind for me, knowing that everything is all there.

Craig: Great. That’s important as you grow and scale, too, I imagine, right? John?

Dash: Yeah, I mean the soft savings have been huge. As I said, we try to make finance invisible, and as the head of finance, really, the only member of our finance team in the office, being able to focus on things like strategy and pricing and BD and CorpDev. You know, my CEO, when he comes to me with a project, he doesn’t wanna hear, “Oh, I need to process payments.” That’s not an excuse. That’s been unbelievable. The fact that I have the peace of mind that we are now compliant in all of our international payments, especially because partners are putting it into our contract, that saves me a lot of sleepless nights. I’ve been very happy about. And then, just that soup-to-nuts sort of platform, from the onboarding to the payments, we thought we were gonna have to split that up over a number of vendors and have a lot of different costs, there. Having it all in one and basically have it be tied to the payments that we have going out makes a lot of sense to us, and probably saves us a lot of money.

Craig: Awesome, thank you for that. Would you both be kind enough to give us some insight into maybe some other financial transformation projects that are on your radar in the coming months, years, for each of your companies? Is there anything top-of-mind now that you feel that experience with our vendors, our compliances setup, reconciliation’s been streamlined? I got some more time on our hands to be more productive users to our organization? Have you thought about what’s, and if you’re open to sharing that, what are transformed, which transformational projects you’re working on next?

John: I mean, I touched on that a little bit. Cutting out Intacct and directly integrating with you guys, that’s gonna be very transformative for us. I also would love to get early pay on our roadmap soon. Our creatives, they get jobs in fits and starts, and being able to have the flexibility of choosing when they pay would be great for them. We also run on very, very thing margins, and so, you know, early pay, basically what you’re saying is, “I’m gonna pay this person 100 bucks in three weeks,” and they go, “All right, well give me 95 right now.” Having any sort of cost savings there while making people happier will help us out a lot, especially ’cause we deal in huge volumes. We’re doing, we’ll hopefully do over 100,000 shoots this year. If you can get two bucks on each one, then that’s $200,000 straight to the bottom line. That means a lot.

Craig: Good for you, very cool. Thank you.

Dash: For us, we’re sort of at that cusp where we don’t use purchase orders or POs quite yet, but I know at some point in the future we probably will need to. It’ll save time by getting things approved up front. We’re finally getting to where we have a pretty legit budget process. But now we have a formal budget, and now we need to stick to it. In the past, as you guys know if you’re early companies, you use a vendor, the invoice comes through, you pay it, that’s fine. Then you see the results afterward. As we try and tighten up that and try and really stick to quarterly budgets and looking at results monthly, we will at some point need to move to POs, and I know you guys are moving, you’ve opened up a PO-matching tool. We’ll probably create POs in NetSuite and try that out probably later in the year. Not quite there yet. And then, I mean, other things that I think, just integrating systems across the board is a huge thing. Salesforce has to talk to NetSuite. Our HRS has to talk to ADP, has to feed into NetSuite into our equities system, into our Concur travel expense. There’s just, a lot of these don’t talk to each other the best right now, and I think a lot of people claim they have really great APIs, so it’s really good to see a tool that actually is legitimately a two-way, back-and-forth sync with NetSuite.

Craig: Excellent, thank you both very much. My last question, if I had my DeLorean time machine here with me right now, I could go back to a year from now and ask you, knowing what you know now, what would you have told yourself a year from now to ensure greater success of a project like this, or maybe help anyone in the room with what you’ve learned, going through a project like this who is potentially about to embark on a transformation? Maybe I’ll start with you, John.

John: I may have done a bit more research. I mean, I knew exactly what it is I wanted to solve, and you guys checked all those boxes. Then we went and we solved that, where now I’m kinda kicking myself, I’m like, “Oh, I had engineering and I had the resources! “I should have done a lot more!” Maybe taking a bit more time on the front end to learn about all of your capabilities and to really sit down with the engineering team and figuring out what was possible. I may have been able to implement more right when we started, ’cause working for a small company and getting engineering resources, especially for finance, is not something that comes around all that often. Now I have to wait a year, and then we’ll do it again. So, really taking the time to see what else you guys offered, and seeing if it was a fit for us.

Dash: For us, the implementation went really smoothly. It probably was maybe a few weeks to a month, but compared to other implementations, I mean, when we were implementing Concur to, you know, as someone on my team’s here knows. Yeah, it took several months. Prepping for that, its relatively an easy integration and sync, and then it’s just starting to think, what’s going to change in the process and preparing your team for that. I can’t really think of anything I’d really sort of do differently. As I mentioned, I think the landscape is changing. At Square, I probably had a team of seven or eight people just doing AP, and here I have one person and that’s their part-time role. They’re still working, they’re doing accruals and credit cards and a bunch of other things. I just don’t have that bandwidth to just spend, spend, spend and just hire, hire, hire. I think looking for a tool is the way to go, and I’m sure you’ve seen that benefit for you, having to manage the whole function.