Hosts Randy Johnston and Brian Tankersley welcome Nick Chandly, Co-Founder and CEO of Forwardly, to discuss how AI, APIs, and automation are transforming accounts receivable and accounts payable for U.S. businesses. The Accounting Tech Lab is an ongoing series that explores the intersection of public accounting and technology.
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Transcript (Note: There may be typos due to automated transcription errors.)
Speakers:
Speaker 1, Randy Johnston, Brian F. Tankersley, CPA.CITP, CGMA, Nick Chandly
Brian F. Tankersley, CPA.CITP, CGMA 00:00
Nick, welcome to the accounting Technology Lab. Brought to you by CPA practice advisor, with your host, Randy Johnston and Brian Tankersley.
Randy Johnston 00:09
Welcome to the accounting Technology Lab. I’m Randy Johnston with my co host, Brian Tankersley, and we’re very pleased to have a guest today, Nick Chandi, who’s been one of the founders of forwardly. Now we’ve had sessions about fordly In the past, but I thought there was a significant enough collection of updates to the platform that it was worth you stopping to take a further review. Now, if you’ve been doing entries and you’ve been paying attention to some of the fees that people are charging. One of the attractions to forwardly is their low cost availability and their integrations with a variety of platforms, including QuickBooks Online, Xero Fresh Books and More. You know, I happen to use the product with Soho books as an example, and is the next year, as this year follows on, you’ll see probably more availability. So Nick, welcome to the program. Would you like to give listeners a little bit of your background?
Nick Chandly 01:11
Sure, thank you Randy and Brian for having me on this podcast. I really appreciate it. Yes, I’m Nick Sally, CEO and co founder of forwardly, been working in the accounting space for over two decades now. Randy, you might remember that we connected first time when I was the CEO of welcome networks, and we built one of the largest IT consulting company in Canada that time that was providing virtual desktops, and IT services securities and software integrations to accountants, bookkeepers and accounting firms. We sold that business, and now I am fully focused on covertly, which is an account receivable and account stable system for B to B payments. We connect with all major accounting systems like you mentioned.
Randy Johnston 02:05
Yes, so knowing that that’s the case, you’re absolutely right. I do recall our first meetings, and in fact, I don’t know it for in fact, but I’m pretty sure that Brian may have used Bitcoin to pay for one of our get togethers when we were over in Vancouver, I’m pretty sure that I have that recalled correctly, and yes, so you’ve got this nice technical background, but when you were talking about trying to evolve and create a payment system, you know, it’s a little different handling the Canadian banking system, where you’ve only got six major banks, or whatever It is, compared to the US system, where we have between 15 and 20,000 commercial banks and about 30,000 credit unions. So we have a very Byzantine system here in the United States in terms of these, you know, systems that are out there. So what was your goal initially, when you were trying to create this payment and receivable system, yes.
Speaker 1 03:06
So what we see, you know, just to clarify, you know, forward the what’s only for US businesses. You know, US businesses, who want to send money to another US business, or want to receive money from another US business. So what I learned working with accountants and their clients, that they’re managing cash flow is a huge problem for businesses. Businesses want to get paid on time, and any they want to pay their suppliers also on time. And what we will we saw that, you know, you might know this Randy, we were founded almost at the same time the AI emerged on in the space. So we were founded almost three years ago, and our design consideration and our architect is very much focused on the AI, APIs and automation. We believe, you know, using these technologies, we can bring a lot of efficiencies in the workflow that are being used by businesses and accountants can help them in automating some of those processes, very different design considerations, and we believe this is a new way to make bill payment. So to building some kind of interconnected system, you know, where accounting data flows from one accounting system to another system. Or where AI can read your invoices and bills automatically and code them accurately and approve them too, you know. So the simple use cases. Can approve them too, you know? So those are the kind of ideas we had in mind, and we are very excited to implement most of them, and the process is ongoing right now.
Randy Johnston 04:53
Yeah, so Nick that you may or may not recall that Brian and I first started teaching client accounting services. Is back in the late 90s. So in fact, I taught that course this week, and recommendation has typically been to bill your services in advance, commonly on the 25th of the month, before the services are performed. So you actually have a fairly nice recurring billing system inside forwardly right now, and for many of you who have client accounting services, clients, rather than paying the increasing fees that we’re seeing from Intuit and others, you know, forwardly has been kind of a go to recommendation for me for some time, simply because, you know, you’re very low cost alternative on this and you know, basically, don’t really see any reason for most businesses and most CPA firms to leave that type of money on the Table.
Speaker 1 06:00
That’s very true. You know, if you are overpaying for your payments to QuickBooks or anyone else, you should definitely look at forwardly. And we take you to the next level too. You know, like we have these auto collection agents for payments, they are eliminating all the bad debts or the delays you know, trying to wipe out all those delays that are tied to those payments, where we collect all the banking information from your customers, send them reminders and automatically collect the payment and deliver it to your bank account. So not only you save money, but you save the time as well.
Randy Johnston 06:42
Yep, that makes good sense to me. Now talk to us a little bit about your AI innovations. Because, you know, as you’ve already mentioned, been in the market about the same amount of time that a lot of the AI innovation has been occurring. And of course, at this point, you know, we’re three years plus into chat GPT, and you know, have evolved from the three, five to the four, oh, to the five, two models. And of course, Jim and I has come along, and, you know, made a pretty significant announcement and release of their models. And we see many things going on. This is not an AI session for our listeners, but it is fascinating for me to watch the transactions occurring with Intuit and Disney and many others trying to get a position. And I don’t mind our listeners knowing that there is a class action lawsuit on copyright infringement with anthropic of which I applied for my portion of that today, because I am an author of books, and one of my books was hoovered up in the web crawl, if you will. And I do see my intellectual property incorporated that way. So I’m taking that little side bent, because, you know, this whole copyright infringement on AI is a big deal, but what do you use an AI for in the forwardly world?
Speaker 1 08:08
Yes, so we, we’re using a lot in a lot of ways, and I just briefly talked about on the AR side, but if we have bigger use on the AP side, sending reminders. Those kind of things are very common. You know, we all have seen chat GPT and other players in the domain, but the way we look at the we use the AI in our platform is a bit different. So that few elements, you know, if you look at the bill pays action, so there are four or five major steps that are major things that you need to handle. First thing you need to do is you need to capture the data, or capture the invoices that are coming to you very accurately, whether those are 200 bills or 2000 bills, you know, we want to make sure they are being coded correctly. They are assigned to write Chart of Accounts, and that process has been automated. We read that data by line items. We are not using OCR or those kind of things. It’s a pure AI based integration that uses cloud at the back end and other backup systems as well. So we have been able to code the transaction very accurately, not the second time or third time, but the first time as well. Because we have data from your books, we can see in the journal ecosystem what’s happening, and now we’re able to code that transaction very accurately. That’s the first thing. Second thing is approval. You know, traditionally what we see Randy and Brian, how AI evolved in the past. AI was helping you to do your work. Okay? It was advising you, it was guiding you. But we are taking a step forward. We are doing the work for you. Yes. Now let’s say you had an invoice from a supplier that you have been receiving for last three years, and the amount is same, a frequency same, and the vendor name and the fraud check, all that came clean, and it doesn’t need to go to those three approvals. We Our system automatically approve those invoices and make it make the payment. That’s how it is. You are the approval. You know, you all three of them. You are going to get notifications in the app and the email that this has been done so AI has made has brought big advancement in the on the AP side. So work is being done for you more or less automatically. You are still in the control. So I believe AP is working more like a self driving cars like Waymo. I, I was in Waymo just, I guess, last month or month before, and I loved it. You know, once you start using it, you know you are never going to go back to Uber or taxi. You know, those kind of system so similar to those self driving cars. You know you have to set up and configure it once you know, you have to provide it some guidelines under which it can operate. But think about the time in that your invoices are coded accurately. They are approved automatically. You are just being notified, and if you don’t agree, you can always step back in. So you are always in a control. You have full transparency and visibility. You know what’s happening. Why it happened? Those kind of decisions are being made by AI on our platform, yes, yeah, prove us out there in and then we need to make sure you know where the payments are being made on time. We offer only electronic payment methods like EOC or faster ch. We also, we were the first company to offer real time payments, or instant payments, where you you can wait to the last minute. You know, let’s say your invoice is due on 30th you can wait till 30 years to make the payment. You know, those kind of functionality we have in our system. And last thing we have is the also vendor management. You know, where we collect one day information, their name, address, you know, the purpose, what the services they provide, any kind of agreement you have with them, the payment terms, currency, you know, all that kind of information that you need. Or for your w9 we also collect w9 automatically from your clients. Now, all that work is powered by AI, and it’s all about, you know, eliminating time and bringing efficiency. But there’s a one big difference here, you know, Randy I said, you know, bill payments haven’t changed in the last 2030, years, but we are trying to change it through our forwardly business network. What we see in that, if you are a micro business, it’s okay, but if you are a good sized business, or low or mid sized business, that data, payment and data, they are both important. And right now, if you look back, there are a lot of fraud is happening, you know, in the payable space. You know, you get fake invoices that we try to detect. And you can take vendors those kind of things we have seen, check problems we have seen, you know, there are sometimes internal fraud, external fraud, you know, we have seen all those kind of things. We try to eliminate it through our overly business network. We know you teach these kind of things. You know about Dec attacks, where you get a phishing email that seems to be coming from the CEO of the company or the key supplier. We are completely eliminating how we are doing it. We are doing it by connecting these different accounting systems. You know, QuickBooks has QuickBooks business networks. Similarly, Zero has zero key network, something like that. But this is from there. These are silo systems. They don’t talk to each other, so data sits in there. What forwarding has done is we have taken it to the next level, so that you can get invoices directly from all of your suppliers through our platform, and they will be every time, 100% accurate. We are not going to face the hallucination that we find with OCR or AI vision models, because data is moving directly from QuickBooks to zero or QuickBooks to net suite, so data will be 100% accurate. So that kind of transformation is happening. So we have taken a very different. Approach than any other players that we see the kind of innovation that we are bringing on the accounts payable side by using AI and API and automation, and it’s all about creating more time so that accountants can focus on on what they are good at offering those advisory services and helping their clients grow.
Randy Johnston 15:22
Yeah, I appreciate all that background and information. And realistically, I believe in the last session that we recorded about your platform, it was really that you were among the very first to go live on the Fed now rails, which went live July 20 of 2023 and you know, being able to do that same day transfer of funds in effect, kind of that last minute ACH type approach is a big deal. And it turns out, from our team here, Brian tends to teach a lot more of the internal controls and fraud topics. So you know, and both of us are involved enough in banking know your customer issues, you know, which is also part of what you were laying out there. Well, you know, I think Brian, I might turn to you and just ask if you have any particular questions for Nick, any things that you think our listeners should know in terms of what the platform can do, or you know other items like that.
Brian F. Tankersley, CPA.CITP, CGMA 16:31
So Nick, talk to me about, talk to me it’s a pleasure to have you here. Talk to me about the about what you’re doing. Are you doing the invoice importing, the AI invoice importing? Are you doing that at line level or at invoice level? That is, are you bringing the individual items on the bills in, or are you just bringing in the total? Thanks?
Speaker 1 16:51
Brian, yes. So we are reading individual line items and the description and quantity, price, discount, taxes, all those kind of things. We are reading those line items, line by line. But we have another improvement that is about to go live by end of this month, where we are that’s going to be ops. Now you don’t want those 300 lines there. You just want one simple description, and we are going to create that one using AI, so both options are available there.
Brian F. Tankersley, CPA.CITP, CGMA 17:25
Okay, Randy mentioned that you’re Canadian, is the service available in Canada as well, because I know some of the other bill pays are not currently.
Speaker 1 17:33
Unfortunately, it’s not available in Canada. It’s available in us only. But we have Canada in our roadmap, and we hope to serve our Canadian customers. We do get a lot of inquiries from Canadian businesses and accountants as well.
Brian F. Tankersley, CPA.CITP, CGMA 17:49
Are you picking up the the sales tax numbers off of the invoices too? I guess then, I’m
17:56
sorry, what do you mean by that,
Brian F. Tankersley, CPA.CITP, CGMA 17:57
like the sales tax numbers when you when that’s a line item on the bills, are you picking that up at all? Yes.
Speaker 1 18:04
You mean, is the AI able to read the sales tax? Number of that kind of information? Yes, we have all that information. And in fact, you know, we have the we read the logo we can attach to the vendor, profile, name, email address, all that information that shows up on the on that document. We read it, whether it’s a single page or 20 page PDF document, whether it’s from one supplier or 20 suppliers. We can read all that kind of data.
Brian F. Tankersley, CPA.CITP, CGMA 18:32
Now I’ve asked Renee lacert This of bill.com the founder of bill.com the same question, but what’s the retention period on the source documents that are fed into your engine
Speaker 1 18:44
currently, you know, it should say, one years, you know, and we have, obviously, because we operate in the payment space, and, you know, there are some legal requirements and that we need to keep some of our data that’s going to so that we need, we need that data to help authorities with any kind of investigation or issues, but generally, we are keeping that. We are going to keep the data for at least 70 years that has been advised to us, but we are not seven years old yet.
Brian F. Tankersley, CPA.CITP, CGMA 19:15
Now, do you support payments via paper? Check for people that that are Luddites who refuse to share their bank account information with you.
Speaker 1 19:26
The thing is, checks. You know, even the federal government is trying to eliminate checks now, right? We are the only country that still focus on the checks. Australia, you know, they completely eliminated and many countries in the Europe, you know, they don’t like checks, but we love it for some reason or the other. But the thing is, checks are so expensive to send over. See, you know, you know Brian, you know you have to stock them. You have to open the spreadsheet. Who is going to sign those one and hopefully someone is going to receive the check on the other five. That, and how many times the AP teams, you know, they’re saving those phone calls, Okay, where is my check? No, we don’t want any of those things. We that’s why, in our hope, and that
Brian F. Tankersley, CPA.CITP, CGMA 20:10
makes total sense. You know, if the federal government, if the federal government, can stop having handling checks, except for the end of the few inbound ones that they need to get from trusts and estates and places like that, I it totally makes sense that go out of the workplace.
Speaker 1 20:25
Yeah, definitely. And in fact, you know those math payment methods, they’re so cheap compared to so economical compared to checks, right? The different studies shows that it costs anywhere between nine to $20 to accept a check, and it’s very expensive. Why you want to do that one when you can accept the ACH payment in less than $1.20 50 cents. You know, all those options are out there,
Randy Johnston 20:54
and I’m smiling listening to you guys go back and forth on this, because, for whatever reason, the IRS made adjustments on my file returns this year, and after October 15, I received a paper check from the government, even though they had all my ACH information, which I thought was hilarious, because they’ve been paid via ACH, But they
Brian F. Tankersley, CPA.CITP, CGMA 21:20
turn, they’re turning a battleship Randy. They really are, you know, you think about the scale of the change that represents an organization that really doesn’t like change. So, yeah,
Speaker 1 21:32
software too. You know, it’s very hard for them. If you look at, you know, we haven’t invested into IRS in upgrading the technology. And, you know, very legacy software, and you know, very hard to make any change.
Randy Johnston 21:46
But, you know, I wish I would have been more close to my coin collecting self, because I did notice that the pennies that were in the last strike were worth $800,000 for a set of three. So, yeah, I think the collectors that were in the middle of that, you know, getting those was were in fortunate positions, all right. Well, Nick, I think we’ve got a pretty good feel for what you’ve done on the platform, how you’ve updated and so forth. I’m pleased for your progress. And you know, I knew when we talked originally that, you know, you would put your best efforts behind this and get something quite usable. And in this new world of client accounting services, where there’s so much of this going back and forth, as you expand your footprint, interfacing with more systems out there, you know, we suspect you’ll have even greater impact. You know, Brian and I in other accounting technology labs have interviewed a number of different new platforms. And my suspicion is that with your design, and as you continue to, I’ll say, stabilize and expand your system, you’ll be able to interface new systems relatively quickly. So my expectation is that you are likely to become an ever larger influence in the market. So yeah, so that said, Brian, any parting questions thoughts from you?
Brian F. Tankersley, CPA.CITP, CGMA 23:19
No, it’s real exciting time. You know, for those of you that haven’t, that aren’t familiar with with the Fed now technology the near real time, ACH is Randy, and I actually did record a podcast, and I’ll, I’ll put a link in with the transcript, in with the stuff I submit to our editor to post so that you can go back and learn more about fed now and understand the new technology that’s permitting this to go forward. But Nick, very exciting about what you got. Looking forward to seeing the accounting systems you add and the countries you add too, in the near future.
Randy Johnston 23:50
So yeah, and Nick, any other party thoughts from your side?
Speaker 1 23:56
Not really, I guess we are on the same page here. I mean, sometimes, you know, we do feel some questions about AI, you know, still early days, you know, for many of us, you know, and, but, but I believe, you know, we work a lot with AIS, and I know it’s not going to replace accountants, and it does the same thing you guys talk about too, but it’s definitely replace your experience. You know any kind of positive manual things, you know they are getting more and more automated. You are still in the control, but it’s never going to replace your intelligence or creativity. So just embrace it, and future is bright based on the AI and APIs and automation.
Randy Johnston 24:42
Yep, it certainly is bright indeed. Well, we appreciate all of you listening in again today. We’ll speak with you again soon in another accounting Technology Lab. Good day.
24:53
Okay? Thank you guys.
Brian F. Tankersley, CPA.CITP, CGMA 24:57
Thank you for sharing your time with us. We’ll be. Back next Saturday with a new episode of the technology lab from CPA practice advisor. Have a great week.
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