Episode 2: Purchase-To-Pay Solutions: Creating Long Term Value

SPEAKERS: Ernest Rolfson, Sami Peltonen

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Ernest Rolfson  00:03

Hey, this is Ernest Rolfson, the CEO and founder Finexio. Welcome to b2b cash flow conversations, the podcast dedicated to sharing insights and innovations in business to business payments, working capital and cash flow management, and FinTech entrepreneurship. In each episode, my guest and I tackle questions in the ever evolving world of FinTech and payments industry that's rapidly evolving and of great interest to investors and businesses alike. Looking forward to having this conversation.

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Ernest Rolfson  00:32

Today, I'm here with my friend, Sami Peltonen. He is the VP of P2P Product Management at Basware. We're excited to be digging into the growth opportunity around AP and procurement automation, as well as thoughts on where payments fits into that. So very excited to have you here. I think we're gonna have a very good, good conversation today should be fun. What What time is it? In your side of the world? By the way, you're calling up at?

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Sami Peltonen  01:12

6pm here in snowy Helsinki in Finland.

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Ernest Rolfson  01:18

Nice. What would you be doing? Right now if you weren't spending the evening with me?

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Sami Peltonen  01:23

I would rather be doing some of the sort of the last of skiing for this season. We still have enough snow, but it's soon all melting away. So that's what I've been doing recently. Mostly, you know, bit of downhill as well. But mostly cross country.

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Ernest Rolfson  02:03

Why don't you see me Tell us a little bit about Basware and the company and your role and a little bit about yourself and what you're what you're up to?

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Sami Peltonen  02:14

Sure so Basware is procurement and invoice processing solutions to global corporations around the world. So we are running a cloud service used by millions of end users around the globe, optimizing their procurement, and financing processes. And my role here is to be responsible for the procure to pay product management. So I'm responsible for the E procurement, invoice processing, offering globally and working closely with many of our multinational clients.

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Ernest Rolfson  02:54

How did you get involved in this?  What was the journey? Are you a product guy? Are you a procurement guy? You like software? What's? How did you get involved here?

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Sami Peltonen  03:10

That's a great question. So I was actually I was, I started my career  by programming. So being like a hands on techy guy. And then at some point, I noticed that I actually want to be sort of closer to business and do product management. And I've been basically just these domain in procurement finance payments throughout my career. So a bit more than 20 years, actually, right now.

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Ernest Rolfson  03:33

And how long have you been at Basware?

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Sami Peltonen  03:36

I talked about for 15 years ago already? So it's been quite a quite a journey.

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Ernest Rolfson  03:43

I guess just out of the gate, what what is what have been some of the biggest changes that you've seen it Basware or in the broader, you know, procure to pay industry since that time, you've been kind of seeped in deep in, you've been in the inside the belly of the beast, for years.

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Sami Peltonen  04:02

Yeah, so, you know, certainly lots of changes, I guess, perhaps the biggest thing is they transition from sort of old legacy on prem services to cloud. So it's been obviously a huge change. And I guess now we are seeing sort of another transition. So we are moving from sort of traditional automation to more like AI machine learning all of these. So, again, another big sort of disruption going on in the domain, which good I mean, with this new modern technologies, we are certainly able to provide lots of great value for our customers around the globe.

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Ernest Rolfson  04:43

And so you've spent now just at one company almost two decades, you know, working to develop and deliver solutions that streamline you know, procure to pay. You know, what do you see as some of Basware were his greatest achievements. Over the past several years, and what about your own achievements? What are you proud of that you've been able to help get developed here that are probably now affecting the way millions of companies get paid? Anything you can speak to both the company and personally?

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Sami Peltonen  05:20

Sure, great question. So I think I'm certainly most proud about the fact that we've been able to help 1000s of global multinationals with the procurement and finance related initiatives. So, you know, being able to work closely with those clients and help them to become better on what they do. I think it's been a, it's been a really sort of enjoyable journey. so far. We are recognized by the industry analysts. And, and I think, increasingly, we are perceived to be the the innovator in this domain. So, we are utilizing some of the latest technologies around machine learning and AI and, you know, collecting all the information from payments and invoice processing and procurement services to our platform, and then innovating on top of that, or being part of that, you know, innovation and ability to deliver, you know, all the time, new types of value for our customers, I think it's been a really great experience for for for my cellphone, and certainly for the entire company.

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Ernest Rolfson  06:31

Anything that you've worked on, in particular that you feel like has made any breakthroughs in procure to pay.

Sami Peltonen  06:39

So, yeah, I think many things, actually. I mean the way how our customer companies are able to move away from paper in their voice processing and payment processes, and, you know, automate all the transactions. And eventually, with that data, from these transactions to something that will provide lots of value for them, in order to, you know, enabling them to make better decisions, and so on, so forth. So I think we've been all the time like a forerunners in this domain, and especially when it comes to automating the downstream invoice payment processes. But then also in providing enjoyable user experience for the procurement end users that need to do the shopping, following the company policy. So making that journey enjoyable for the end users. And there, we are also leveraging some of the latest technologies like virtual assistants things like this. So I think it's been impacting the domain quite a quite a bit.

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Ernest Rolfson  07:51

Nice. Nice. So let's talk for a minute about 2020. What is what an interesting year? How did the the, you know, COVID-19 affect your business and your clients business in 2020? And I guess what, what changes have you seen? And do you think those changes are here to stay?

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Sami Peltonen  08:14

Yes, I mean, certainly, really exceptional year from many standpoints. I think from from our standpoint, there has been sort of, you know, positives and negatives. I mean, obviously, because of these VPS, seeing some, you know, slowness in the sale cycles in certain occasions and so on and so forth. But in the grand scheme of things, I would still say that this has been a positive driver for our business, I mean, obviously, sort of a horrible situation for the for the entire world. But if I look at from the business standpoint, there has been some drivers that are actually sort of bringing more business to us, mainly, you know, the companies are eliminating the remaining paper from the process. I mean, that has been clearly a trend during 2020 because it pandemics that those companies were still using paper for their invoice processing. They've been almost like forced to move away from the paper. And it's obviously reallu you know, pragmatic problem that, you know, if you're not able to access your offices, you were not able to send those invoices with paper, you're not able to scan the receipt, invoices, so on so forth. So it's been driving the business by, you know, eliminating the remaining paper, but also, I would say, Cass has always be the game King for sure. But with the pandemics, it's becoming even more evident that the Cass agility is super important. You need to be able to be on top of your cash position all the time. You need to look you know, we talk to suppliers, you need to pay fast in order to keep them operational, you need to be able to look with which suppliers, you may want to extend payment terms to optimize your own caspo systems. So all of this has been driving for cash agility, if you will. I think, you know, things, the top bid priorities for the CFOs for years already with pandemics, they have become like top priorities for the entire company and for most of the companies, so everybody's looking to ensure that they are able to manage their cash in an efficient way. So to answer your question, so lots of changes,with the pandemic's, but also eventually beautimous data bind off, you know, companies were able to eliminate the paper and automate more, we'll create some sort of sustainable value then going forward.

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Ernest Rolfson  10:51

Yep. Yep.

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Ernest Rolfson  10:53

So it's actually not just, according to you, right, not just about the digitization of process and getting rid of the paper and the manual transactions, but it put more of a focus on cash flow, and cash flow management, for the buyers and suppliers.

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Sami Peltonen  11:11

Absolutely, I think that's been, that's been really crucial. So many companies have been in a situation where they've been forced to take bigger steps in ability to forecast how the cash positions are evolving, they have been under the pressure of being able to, you know, rapidly pull together a rnap views, you know, have a real time perspective on how things will progress. So they are really able to, you know, optimize their payment processes and see to which suppliers, they need to pay fast and to see obey, they need to optimize their own sort of working capital management, and so on and so forth. So, so yeah,, the cash activity, for sure, is the sort of hot topic at the moment.

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Ernest Rolfson  12:01

Do you folks, just for the listeners, do you folks have any cash flow management are working capital products are exploring that right now, just for education purposes, given that this is seems pretty critical for the CFOs?

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Sami Peltonen  12:15

Sure.

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Sami Peltonen  12:16

So the role we are playing here is that, you know, first of all, we are number one company globally for the invoice processing, so so we kind of, we handle all the outgoing money in terms of invoices, so we are able to provide like a really holistic visibility on that side of the thing, so the AP side of things, then we can, we can integrate that together with the AR, to get a holistic visibility on the on the cast. We also deliver solutions for financing like, especially dynamic discount is a service that I think there has been lots of tracks on recently, partially because of because of the COVID. But companies want to have like more dynamic payment terms, and you know, better labor rates, those. So that is something we do deliver as well. So essentially, we want to be like, CFO, day to hop, you know, having all the incoming invoices as a foundation and then enriching that, with the information from the billing side, the AR side, and providing a holistic visibility over this over to spent on cash.

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Ernest Rolfson  13:35

Now, that makes a lot of sense. I mean, this is an area we, we just raised $15 million to go and pursue the Supply Chain Finance opportunity, I think it's one of the something that is more common with these multinational clients that you're working with that are really sophisticated on managing the cash and need to know that the middle market and smaller companies are not familiar with those kinds of solutions, right. And the banks are not really providing them. And I think the big bet I'm making, the bet you and your company are making is that the CFOs they want to do more with their software, right? They want to get more investment, return from the software they've already bought and implemented, and they're using for payments. And so it seems only natural, that financing working capital liquidity management solutions are part and parcel of the procure to pay process, right? It seems like a natural extension, no brainer. And what you're saying really seems to be confirming that, that COVID has actually made that now even more important and more of a focus.

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Sami Peltonen  14:39

Totally, agree with that. I think increasingly, that's a direction that companies are looking for. And it's obviously sort of tightly linked to the efficiency of your invoice process. So you need to be able to, you know, automate the invoicing so that you can actually use all of that time defined payment terms to then decide, you know, whether you want to pay early to get some discounts, and so on and so forth. So I think these, these prophecies, they are really nicely tying together.

Ernest Rolfson  15:12

Yep. I think two ways we can take this one. Can you share with the listeners, I guess why this is so important that these types of companies that would be using a procure to pay platform invoice automation payables automation, that they I guess first of all, do you think or do you agree? Would you agree with the statement that it's so important that they think and consider this as a holistic journey, right? Not just automating the invoice, automating payment, automating working capital? You mentioned data in AI several times, which I want to learn a little bit more about, but do you think it's important that they think of it as a whole? And is that set you up to, I guess, better remove points of friction? Would love to, you know, love to hear your view there?

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Sami Peltonen  16:04

Yeah, 100%. I mean, I think that's exactly how it how it is. So, we can see, in a similar way that the companies are moving away from the paper invoices, they want to move away, for example, with the paper checks. We see our customers coming to us asking, you know, how we can help them with different sort of payments related initiatives, it may be about getting rid of the checks, or it may be about optimizing the cross border payments, which we see a lot, because we are having a big customer base of multinational companies who need to pay on board across the border. Many companies are looking to optimize the payment processes. That's an area where bassford, for example, rather than doing that part of the process by our salespeople want to rely on experts, like the next CEO, who are extremely good on optimizing the payment part of the process. And I think it's really important and going forward, that the accounts payable or the invoice process, the payment process, are tightly seamlessly linked together. Because only then the companies can really have like, you know, full control on when to pay, and so on so forth, they can get, you know, better analyze these on their payment behavior, they are able to use machine learning and AI to better predict, which of the universities will for example, be on a risk of getting paid late, because they have all the information in the same place, they can use machine learning for stuff like that predictive analytics. So I think that that is where this domain is going to that the company is going to have a single place where they control the entire invoice and payment process in an integrated way.

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Ernest Rolfson  17:56

Yeah, that makes a lot of sense here. This is more of a prediction aspect and then I want to pivot talk about some data to is, do you see that? Look, you're one of the global leaders in procure to pay, you're doing collaborations with various payments companies? You know, you mentioned for Finexio? There's others I'm sure you're working with? Do you think that more p2p and software firms are going to become payments companies themselves and go and build out payments processing money movement businesses? Do you think that your culture may be more around partnering? But do you think that it's going to be more about partnerships and integrating and bringing in best of breed? Or do you see maybe some of your peers building their own? I'd love to see your view on what you think is efficient path for the market forward? Or why you think certain paths are likely?

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Sami Peltonen  18:49

Yeah, that's a really, really interesting question. And it's perhaps a little bit difficult to  see what's going to happen. But I think, you know, right now, today, still, I think that are, you know, these two processes, they need bit different types of expertise. And that's why I think that right now, in this domain, it is mostly about sort of integrations and white labeling platforms in a way or another, you know, but But eventually, even with the partner model, I think what companies are looking for is seamless, unified, consistent experience for the end users, even though there might be different technologies under the hood, basically. So I think that's where we are right now. But then moving forward, it will be interesting to see how much people see like actual consolidation here, and, you know, companies actually bringing the invoice processing and payments to one, same single platform. And if you look at how it typically nowadays works is that you know, you know, pretty often companies, they process their invoices inside their AP automation solution, then we are done with that day transferred those invoices to E RP, for the bookkeeping, all of that. And then from AARP, they are sending the invoices forward. And eventually the supplier is receiving the money. But you know, this sort of jumped GRP in the middle is kind of unnecessary in the end. So it would be much more beautiful and streamlined process, if you would be able to control all of all of this from a single single place. And, you know, still, obviously, he RP will always need to be updated, and you need to have the GL information there, and so on and so forth. But uh, but I think in the long run, we will be able to eliminate that sort of unnecessary step that may slow down things every now and then in certain circumstances and actually control the entire invoice to payment process from a single place.

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Ernest Rolfson  20:58

Yeah, really helpful views on the market. We're kind of here, we're kind of betting on both right, we're kind of betting that we've got a white label product and a turnkey offering that platforms are putting in market overnight because that's where they are in the development cycle. While we also are running an API, fully integrated strategy for companies that want to do it. And I think I'm betting long term most AP procurement softwares are not going to go build it all themselves, but they do want to control that front end experience, and have a great user interface, have some payment rails that they connect to, because I think, to your point, you know, the E RPS are becoming kind of an anachronism in the space, they're not as required. I mean, it's it's an you have to do accounting, you have to have the piece there. But I've seen more firms and users working more with their AP procurement software suites to make all the decisions about payments. And I think that's where the value is moving. I do think there'll be consolidation, I wouldn't be surprised if some maybe some of these more enterprising er, peas start and make some acquisitions themselves, because they're gonna they're losing the value, the value is shifting away from the accounting software into these other CFO, financial back office functions. And turns out, you can make a lot more money moving money than you can moving invoices. So that's, I think, where things are quite shifting. So yeah, thanks for thanks for that. You mean, you've mentioned the data. You've mentioned the AI. Are those the trends? I think there's others. But would you think that those are the most important trends in this modern call it digital transformation that's affecting the financial back office procurement? And AP? Is that is that the biggest current impact? Is there others maybe but then you see the AI thing being more important, I'd love to just see how you how you, you know, kind of prioritize that and think about where the impact is. But since you've mentioned a few times, I think you you've probably made some really interesting advancements there that is worth probably learning about.

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Sami Peltonen  23:11

Sure, yeah, this is one of my favorite topics. I think AI is perhaps the, I would say most important that technology at the moment. Everybody has been talking about big data for years. And at the moment, I think, almost every company is in a situation where they do have lots of data, like lots of lots of data in their hands. But the problem often is that people have very little time to actually do anything with that data. I mean, if I think about myself, in my daily work, I have lots of data, but if I'm busy, I'm at meetings, I need to do emails, I need to do phone calls, so I don't have time to really analyze, you know, all the information I will have available. That's where AI plays the most important role. So So how I see it is that AI is the way or call to actually bring the information to right place, or you know, to bring the right information to the right point in the process, where you need to do this is so rather than the decision makers having to analyze the information, the AI will be a game changer. If and when it will be able to do the analyzes sort of in the background, and then just bring smart recommendations for the NT offers. And I think that is that is really what will be disrupting this domain. Big time. So, smart recommendations. That's how we call them so the AI is able to tell you what you should do based on the data. And that's a big thing. I mean, that ensures that you know Finally, the data kind of be actually used to deliver improvements, more automation, you know, better decisions when the AI is able to serve the end user in a proper way by providing the smart recommendations. So that's why I believe that it is  having a super important role in the in this domain and obviously pretty much everywhere.

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Ernest Rolfson  25:19

Yeah, so it's more like, "hey, you've got a payment due on Friday", "Hey, did you know you could pay that early: and capture a discount, "hey, we see that you're paying Acme Corporation, Acme Corporation actually is likely to take a card payment, you might want to pay them that way and get a cash back from that", or "Hey, you know, you're paying this international vendor, they could actually get paid in USD and save you on foreign currency exchange costs." And, you know, the some of the use cases you're seeing, I mean, other others.

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Sami Peltonen  25:52

Exactly, that's exactly what I'm what I'm talking about. So that's how, that's how it works. And the beauty of this whole thing is that with the, with the modern cloud services that we do, you are able to use the community intelligence, the information from all the different clients, you know, obviously, in an anonymized way to provide those recommendations. And, you know, there are so many, so many different use cases, and we have been implementing many of these already. And you can see things like, you know, which invoices are the highest risk of getting paid late, or doing too late in the fast lane, and so on, and so forth? So, there's plenty of applications available already based on AI. But there's still a huge potential event going forward.

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Ernest Rolfson  26:35

Right? You know, ai gets thrown around a lot. Who is, one of the potential, I don't want to say downsides of AI, but one of the elements of it is you do have to train the machine, right, you have to get it spun up. And we've seen companies actually get criticism around AI companies like Palantir, right? where it's like, Is it a software company? Or i s it a professional services company? Because they've got all these engineers that have to train the AI and do consulting around it? So how are you thinking about that component? And is this something where we're gonna have finance teams and procurement teams learning and knowing how to guide the machine? Or is this something really kind of like the proverbial Intel Inside? It's really kind of happening? I mean, is this something you're working on to enable for clients? And how do you see this developing?

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Sami Peltonen  27:29

Yeah, great question. So I think it is a combination of human and machine in the end, that will do the magic. So, first of all, I think, many companies, they have been running their invoice and payment processes, in, you know, some electronic formats for almost like two decades already, in best cases. You know, even though there's been lots of paper, everywhere, you know, there are companies who've been doing this using digital platforms for 20 years or so. So eventually, if you look at the actual data that these platforms have, you know, there has to desktop to be like a really good data asset already. So that helps, we can use all of that historical data from past 20 years to guide the upcoming automation using AI. But then there still have to be human involvement, and how it has to work basically, is that the, the machine cannot always know exactly what to do. So then the machine has to ask help from human. And, that's a new way of sort of interaction between the the solutions and the end users. So the AI has to, you know, ask end users to confirm certain things. And in the end, I also think that pretty often nowadays, the end users, even though they, in theory, would be able to let AI to do the decisions, they still want to be in control. And what it means in practice is that the AI may give you a recommendation or suggestion, but the end user is the one that actually decides what to do. I think that's fair VR, with most of the customers that we are working with, at the moment that there's this, you know, potential to, even in certain cases, even to eliminate the human entirely, but the customer wants to still have the control and confirm things decisions before AI will start to execute them. That's at the same time, a great way for the human to educate the machine on what to do so machines will learn and then their predictions will become better and better based on this human input. And eventually, we will probably see processes that are entirely automated based on AI. But you know, we need to wait for a while before this trust between the human and the machine is sort of building up.

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Ernest Rolfson  30:02

So a lot of change coming, a lot of change occurred in 2020. We've already kind of touched on that. I mean, do you see companies embracing more of the change? And is it seemed like there has been an acceleration there? And are you? Have you reflected on any of the potential downside for companies that are not embracing the change? I mean, it seems like barriers are coming down, you are talking about some fairly, to some seems like bleeding edge technology. And you did touch on a critical piece, which is about that, that they want the control, right, the end users, the corporates, like this new payment automation, invoice. decisioning is smart recommendations, but they still are, you know, they are accountants, finance departments, they want to make sure they don't lose sight of what's happening. Is that a barrier to they're gonna just have to get over that to embrace the change?  Can they have both? I think they can have both. But I would love to get your views on the onset.

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Sami Peltonen  31:13

Yeah, that's, that's really interesting, interesting topic. And I think

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Sami Peltonen  31:19

I think, first of all, you know, pandemics has been a good driver to push everybody to change. Change has been sort of mandatory in a certain extent. And the good part here is that if and when the companies have been under the pressure of, you know, optimizing their processes, getting rid of paper, automating more, enabling end users to work from home, all of this, I mean, it's not just a sort of a band aid to lose for the for the crises, but actually it is providing sustainable value of going forward, they will be more efficient, they will be able to better control their spent, they will be able to better control their budgets, if they deployed procurement finance officers, they will be able to pay faster, they will be able to better manage their supplier base and the supplier risk profiling, because they had to do this change now, in the pandemics. So, I think that, you know, many companies eventually, even though they have probably been in a hurry, with doing these changes, now, they have noticed that actually, it's been a really positive and good move, and, and providing sort of sustainable value also, then going forward. And that's why I also think that you know, if you are not digitizing your processes, you are by going forward, you are losing many good opportunities, that may even impact your competitiveness in the in the business, suppliers they expect that you are paying fast, and you need to be able to better profile your supplier, supplier base, in order to understand who you are dealing with, and, and you know, what kind of risk there may be in your supplier base. So, I think, eventually, it is super important to look at these processes, and see where there is room for improvement still, after the accident is done. You're into pandemic. And there's you know, obviously multiple ways where you can start, start from procurement, you can start from universe automation, you can start from eliminating the paper checks. So, you know, you can approach this from multiple different perspectives, but I think it is really crucial to ensure that the end to end chain eventually works. It's not only good from the automation standpoint, but more, you know, more data you will have, and then that data will provide the basis for efficient AI based automation and predictive analytics and the smart recommendations I mentioned. So that's the way how we eventually tribes, you know, better performance and competitiveness in the end.

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Ernest Rolfson  34:09

Yep, yep. No, that's great. I loved what you touched on there is, so much of the change and drive for change there is coming from the supplier demand from the supplier side to right, they want to get paid faster. Those are your words, they want more convenient options. They're looking for cost savings, right? They want everything to be better, faster, cheaper, and that's they're going to choose to do business with companies and make it easy to do business with them. No one wants to be dealing with paper.

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Ernest Rolfson  34:40

Yes, anymore. Right. It's bad. It's bad for everybody. Place.

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Sami Peltonen  34:45

Yeah, I mean, I mean, that's the case. Exactly. So if you know in the past, at least in certain occasions, you know, suppliers are seen as a source for you know, more savings. You need to do this thing for me cheaper, and so on and so forth. Now, it's perhaps like turning other way around that you actually need to have a good deep collaboration with the suppliers and serve them. I think that dynamics is probably changing a bit right now. I think that that's something that everybody needs to sort of keep an eye on.

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Ernest Rolfson  35:21

I think that you can get so much more value out of any business relationship you have, if you think of it as a relationship, right? If you think of it as a valued partnership, versus just thinking about somebody as your vendor and just beating them up and beating them up on price or something like that.  I grew up in the payments industry, and I was working in MasterCard, and, you know, some customers and partners are like, well, it's just the same as visa, right? It's just you could both move money, both have networks, everyone takes MasterCard, everyone takes visa. The reality is, you're going to work with people you like, and people that are innovative, and people that are interesting, and people that can help grow the relationship between you and suppliers, vendors have to realize that and make that investment, but you will get if you're a buyer, you'll get so much more relation value out of your relationship, if you come in, have it more in an open arms. And that's also why here, when we're doing payments, you know, there's so much interest in opportunity in using virtual cards. And that's the hottest FinTech payment product, really globally. And what we saw in the early days of the industry in the incumbents are like just pushing the card, forcing it on the supplier saying, Yeah, you have to pay a fee to take this card, and kind of jamming it down. It created a ton of friction, a ton of complaints, a lot of a lot of attrition. Now, the industry still growing very, very quickly over 20% a year. But I think the dirty secret is the industry is growing probably 35% a year, and attrition is probably 15%. So you're still getting that natural growth. Because there's still that push. So what we're doing it for Finexio is realizing that every buyer and supplier relationship is unique. That it's more about not pushing one option and getting the friction, if you can do education, if you can do information, if you can have easy supplier education pages and signup pages, they feel like they're more valued party in the report and they want to come to electronic, they want to take these payment options, and you can have a better conversation with them. And I'm sure you've seen that same thing with electronic invoicing and acceptance there, right, you don't want to make it friction, you want to have a peaceful and value that creates a long term, long term positivity, you know, and that's what I'm excited about in payments. And I've seen great results with our customers from that. But it seems like you're nodding your head that you've seen those same methodologies work from where you sit?

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Sami Peltonen  38:03

Yeah, totally and I think, you guys have been doing a really fantastic job with that approach that, you know, it has to be convenient for both parties, for the buyers, and the suppliers, you know, to be able to find the efficiencies and I think, historically, based on my experience, you know, that has been perhaps one of the biggest obstacles with any, you know, finance related initiatives that if you are unrealistic on how much you can change the behavior of the other party supplier, in this case, you know, then typically, you're not able to get the the return for your investment. So it's good to be flexible, aim for having a model, which is sort of convenient for both parties, and, you know, sort of a natural also for the supplier. So I think this is super important perspective.

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Ernest Rolfson  39:00

So, before we wrap up here, I just would love to get your thoughts more specifically on on whether the growth opportunity really exists between, you know, a p2p, you know, the automation the payments and, and seeing that those two payments and procure to pay really working together to disrupt the broader industry. I mean, do you do you believe there's a big growth opportunity there? And do you have opinions as to what you know, what the benefits may be or why, you know, this could be the case.

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Sami Peltonen  39:37

I think that there, I would say there are two, two things or two major drivers I can see. So, you know, first of all, it's about the end to end automation. So you can still gain lots of efficiencies if if you are able to properly integrate the invoice process, the payment process. As I mentioned before, if you can, for example, eliminate the erp between these processes, you know, it will, it will make things much more efficient and streamlined. So the automation, from the end to end standpoint is one thing that will for sure drive a lot of lot of change. And the other thing is then the data, I mean, if and when these processes are integrated, you are able to collect all the information to a place. And then when you are able to collect that information to single place so that you actually have the end to end visibility, then using AI and predictive analytics to help you with that decision making, you know, a giving those smart recommendations for the end users that will further take the efficiency to the next level and also help in decision making from many standpoints. So I see a huge growth opportunity by integrating these two processes tightly together.

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Ernest Rolfson  41:03

And this is because you look you've collaborated with with folks like Finexio, you've been building payment solutions partner on payments and AP automation. Do you have specific advice to the broader industry, other procure to pay software companies that are thinking about payments? Or how to help customers here? I mean, any pitfalls that folks should look out for any best practices that you think you can see or advise on? Given? You're an expert in this?

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Sami Peltonen  41:37

Yeah, great question. So I think the most important thing is to obviously sort of listen to customers and and what they what they are looking for. So I think, it's important to get the voice of customer to this discussion, and sort of prioritize how to bring these processes closer together, based on the customer feedback, there are a few different ways how you can look at it. I mean, as I think I mentioned at the beginning that, you know, we can see some customers looking for ways to eliminate the checks, some are looking for ways to optimize the cross border payments, some are, you know, aiming to do something else. So it's important that the customer view to your plans, and then see what is the best way to help the customers to be more more efficient by combining these these two processes. And it's important to look at this really holistic standpoint, so so what are all the different, value you are able to provide, when things are integrated, so not just having a sort of API in between. But I think ideally, you would be able to, you know, really control the entire end to end process from a one place to the decision. And I'm going to say no single place and also then collecting the information to a place where you can then tap AI to and let the AI to do the magic and provide those are my recommendations. So that's another perspective. But I think the most important thing is to is to, you know, work closely with the customers and see how you can build a roadmap of integrating invoice processing and payments to deliver the biggest value for the customer.

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Ernest Rolfson  43:19

Just before we wrap up here that the podcast name is paying it forward. Anyone that you'd like to pay it forward to do you have some advice, perhaps to say folks trying to come up in the product development world or whether it's, some CFO, you really want to try to give the right advice to to make sure they choose the right solution or just some good mentorship or advice you might want to give some of our listeners who will be a mix of you know, FinTech people, product people, customers that might want to work with our companies would love to hear you have a couple of nuggets of some personal advice or professional advice for some of the folks who may be on the phone, or on the on the on the podcast with us listening in.

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Sami Peltonen  44:07

Yeah, sure. So I think my being, if I look at different product management standpoint, which is which is close to my close to my heart, I always, always keep saying that. It's, it's, so important to know, your customers, work closely with the customers understand what they what their needs are. And then deliver, it's all the latest technologies to help the customers with the problems they are having. So, you know, not just using technologies per say, but it's super important to work closely with those customers and help them with the initiative they are doing by doing doing so, you know, by leveraging all the latest and greatest technologies. So I think, for all of the product management folks, I think that would be my my sort of advice that these ai on the other technologies they are great servants but bad master so so it's important to use them in the right way and eventually you know always aiming for for providing value for the customer.

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Ernest Rolfson  45:16

Sami it is awesome talking with you man as always a passionate guy knowledgeable guy, one of the top minds in the space. So hopefully we can promote some more of that here. But this with this podcast, it's always good to talk and collaborate with you. Just on a personal level, it's it's always just great. And I always come away smarter about the space and talking with you so good to get some of the some of the insights. Where are we? Where are we going to meet in person? Is it in Vegas at money? 2020. And some years down the road? What's the most the likelihood of us encountering each other?

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Sami Peltonen  45:59

Yeah, so certainly fingers crossed for that. So whenever we are allowed to travel again, I will certainly book my book my tickets to U.S and it would be really, really great to see you in person there. I mean, I always also sort of appreciate our conversation. So hopefully soon. I mean, we'll see how this thing goes. But I'm really keeping my fingers crossed if we can travel soon again.

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Ernest Rolfson  46:22

If I come visit to help Helsinki what what bar are you taking me to to grab some drinks? What's the one? What's the classic label for the International drive

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Sami Peltonen  46:35

I would probably take you to a bar called galet. It's a place where everybody has to gas on the table. They aren't Finnish traditional music and everybody has to see the table. So I would love to see you there.

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Ernest Rolfson  46:51

I would want to do my best, traditional Finnish folk dance for you. I would actually do some research in advance and make sure I'm not going to embarrass myself with the local. How could you you know, can put me on the spot and not deliver? Well, look, man. Thanks again for your time. Have a good rest of the evening here. And we'll talk again soon. All right.  Thanks for the opportunity to discuss. Thanks a lot. Take care.

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Sami Peltonen  47:29

Take care.

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Ernest Rolfson  47:32

Thanks for listening to B2B Cash Flow Conversations. This is Ernest Rolfson, the CEO and founder of Finexio. I welcome your questions and comments. You can reach me at podcast@Finexio.com You can also find us on Twitter at Finexio payments to subscribe, you can go to Finexio.com/podcast. Be sure to check out my new episodes on Apple podcasts, Spotify, or wherever else you listen to podcasts. Thanks and talk with you again soon.

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