Different types of businesses present different challenges when it comes to financial administration. Small and medium-sized enterprises, who have fewer resources in this area, can need particular help. Driven by his experience of this, and inspired by his knowledge of e-invoicing, Volcker van West teamed up with a tech-savvy partner to develop Furoo, a pre-accounting platform that eases accountancy tasks for small businesses and the accountants who serve them.
The challenge: easing the disconnect
The nature of how small businesses are run, with a focus on money-earning tasks and no dedicated accounts department, means financial administration can easily become disorganized. Their accountants have to sort it out every quarter when VAT returns are due.
This is what can happen when financial administration is deferred to weekends or only addressed when it becomes unavoidable. Challenges in managing paperwork typically results in errors, omissions and discrepancies such as missing invoices and double payments. And because clients often don’t forward their information until deadline day, accountants have very little time for making sure everything is OK. And no opportunities to offer proactive advice.
At the end of each quarter, accountants find themselves burdened with a peak workload which ideally requires additional staff and automation. But the right people are not readily available, and automation isn’t feasible when information is not presented in a structured machine-readable format. Even though OCR can be used to extract data from PDF documents, this is not 100% accurate and manual checks are still necessary.
In essence, there’s a sizable disconnect between how small businesses manage their accounts and what accountants need to provide the best service.
A solution based around e-invoicing
E-invoicing is all about structured, machine-readable data. Volcker figured that if small business owners had a quick and easy way to provide this data, that would put an end to disorganised last-minute paperwork.
Furoo was therefore designed to encourage users to enter financial data as they go along, in a structured way. No more storing up PDFs for another time, no more double checking whether the OCR tool has worked properly.
The entered financial data is stored in XML files and processed in Peppol BIS 3, ready for transmission over the Peppol network via Flowin. Having utilised these e-invoicing standards to bring structure and discipline to clients’ record-keeping, Furoo is set up to enable both e-invoicing and secure sharing of data with accountants. The result is greater accuracy, reduced administration time (for everyone), and all the benefits of e-invoicing.
Furoo further assists small businesses through functionalities such as time tracking, project management and inventory oversight. E-invoicing is seamlessly integrated with this project data, so there’s no need to worry about getting invoicing details wrong, making incorrect payments, or tracking payments received. Furoo users can easily perform a KYC (Know Your Customer) and upload their ID in preparation for sending and receiving e-invoices. This, together with the way Furoo checks all data from paid invoices and links it to projects, greatly reduces the chances of falling victim to invoicing fraud.
With all this, the structured data format that underpins Peppol e-invoicing has been used to create a one-stop-shop where small business owners can see and manage everything through a dashboard. And accountants can be kept in the loop with structured, pre-processed data that lowers the reporting workload and gives earlier insights into clients’ financial situations.
An important shift for small enterprises
Furoo CEO Volcker van West recognises that becoming more disciplined with financial administration, and entering the e-invoicing world, will be a big shift for many small enterprises.
“People who have been using Excel or Word for their invoicing need to change their practices, and might initially find this challenging. They can no longer alter invoices after issuance, so have to be more careful and disciplined with administration. And although some are only adopting e-invoicing because of legislation, it actually offers them more advantages than disadvantages.
“You hear a lot of people who run small enterprises saying they don’t need a system like ours and can do it all manually. But once they test it and discover how easy it is to use, they quickly see the time-saving benefits, and how much better things work with their accountants. It’s an investment that pays off really fast!
Conclusion
The Furoo case demonstrates how e-invoicing can be leveraged to create added-value accountancy software that eases administration for SMEs, improves workflow and decreases workload for end-users and accountants alike.