Autonomous Billing with Rom Lakritz of Anchor | Soar Payments LLC
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Autonomous Billing with Rom Lakritz of Anchor

Many businesses face numerous challenges when it comes to B2B payments and are often subject to revenue leakage in the billing process due to human error. In this episode we sat down with Rom Lakritz, Co-Founder and CEO of Anchor to talk about the benefits of payments automation to increase growth capacity and profitability.

Payments & Fintech Insights In This Episode

  • The ways billing and payments can be plagued with errors costing substantial revenue leakage.
  • How automating the process of B2B payments eases the process for everyone involved and increases growth capacity.
  • The importance of data security and compliance in billing and collections.
  • How flexibility and customization enables Anchor to provide continual value over the engagement with the platform.
  • And so much more!

Featured on the Show

Episode Transcript

Heather: Hey, everyone. Welcome to PayPod. I’m your host, Heather Bodie. And today we’re going to be discussing the B2B payment process and why manual invoice data is bad for your company. Joining me today is Rom Lakritz, the Co-Founder and CEO of Anchor. Rom, welcome to the show.

Rom: Thank you for having me.

Heather: Before we jump into the challenges that small businesses face when it comes to payments, I wanna take just a second and have you tell us a little bit about yourself. How did you find your way into FinTech?

Rom: So I guess I like money all my life which is not the best answer.

Heather: No. It’s a valid answer. No shame.

Rom: So I was an entrepreneur since I can remember myself. I started giving services and trying to build businesses since the sixth grade. I had a lot of small things as a child, flowers, and babysitting, and parties. And my professional life, I studied accounting and business administration. So I had the foundation to go towards payments. In my professional life, I founded five companies. So Anchor is my fifth company. Actually, in different verticals. So I was in cybersecurity, biotech, consumer, even cannabis, and in all my roles, I was always around operations, and finance, and management. And I couldn’t resist, but seeing all the payment challenges. They are in accounts receivable, in accounts payable, and all the errors and risks of fraud, etc. in B2B payments. So after my last exit, I started to look at the payment industry and try to pinpoint this one issue that if I would fix, it would actually change the way businesses do business. And that’s actually Anchor.

Heather: When I visited your website, that phrase jumped out at me, “Do business, not billing.” And I have to be honest with you. It felt really personal. As an entrepreneur myself, the amount of things you have to keep it front of mind all the time in order to successfully run your business can be absolutely daunting. And for me, I have to confess, I’m one of the big ideas people in the room. I can’t… All that nitty-gritty, I get sort of lost in it. So tasks that are highly detail-oriented like billing, invoicing becomes really cumbersome and I personally, I’m prone to mistakes. So talk to me about Anchor specifically and I know you just mentioned how the idea came to be, but let’s get a little more detail. How does it work?

Rom: Actually, what you just said is what we hear from almost every business, even our customers who are accountants, and bookkeepers, and CPAs, still, they like to give the service. They’re good at helping their clients, but at the end of the day, billing and collection, and payments is a pain. Usually, you have, when a business grows, you have an admin to help and work on these tasks. And as you just mentioned, a lot of errors, duplicate payments on the payment side is a half a percent of all payments which makes a trillion dollar that are being paid by businesses to businesses by mistake, by definition.

Heather: Oh, my gosh. Oh, my gosh.

Rom: For service providers, the average revenue leakage which means that the average revenue, they forget to bill at the end of the month, of the period, of the year is 4.6% of the top line of the revenue, which actually means that it’s 4.6% from the bottom line because all the expenses and the time, and the work was done. And if you look at an average business, an average business profit is between 10% to 15%, you know, after expenses, and salaries, and all other costs. So we’re talking about 30% to 40% of their profit actually just not being billed and I didn’t get into fraud, internal and external risks, and different kinds of errors, sending the invoice to the wrong person, putting the wrong rate, and all other mistakes. So everybody with no fault of their own are in this together and the way that Anchor works is a bit different. You touched upon big ideas.

So if you look at businesses and the way we conducted businesses for the past 30, 50, 100 years, there always has been some type of an agreement. Until, let’s say DocuSign or, you know, two years before DocuSign, everything was completely on paper, and faxes, and mail, and snail mail, and all of that. Then DocuSign came in and it said, “No, let’s take this paper format. Let’s take it, computerize it, but it’s still a paper format.” And then when you look at it today, when someone needs to invoice, or bill, or pay, they’re actually looking at a paper format, an agreement, take the information manually, and put it in an invoice, and that’s where errors come in. And it also opens to fraudsters. You send an invoice to an email, someone can catch it, change the bank account, and there you go. You paid to the wrong vendor.

And technology came in and they say, “Okay. Let’s use OCR. Let’s use artificial intelligence, and machine learning, and algorithms and other technologies to try to read that digitized paper, and try to help you with reconciliation, and what the invoice should be, and what the payment should be, and you have purchase order,” which I’m sure everyone is familiar with. We looked at it and we actually came with a different approach. We’re saying that paper or the old paper is dead, and instead of building a paper-based agreement that computers don’t know how to read, and then try to develop technology to allow the computers to understand what the agreement is about, we’re saying, “No, let’s build the agreement in a language that the computer can understand fundamentally from the beginning and also, humans.” And that’s the basis of Anchor.

So our customers, when they send an agreement to their clients, it’s an agreement that they already set the rules of building, the date, the net terms, when is it automatic, when is it manual. And once both sides agree to that, you can actually connect to the bank accounts, you connect the CRM, the ERP, your bookkeeping software, and the agreement just does the work for you. So if we have a monthly billing that changes and we’re waiting for hours, we’ll bring the hours, we’ll issue the invoice for approval. The client will know 100%, it can’t be fraud. We would limit the amount of errors that can happen and highlight them. So if we’d say around hours and the payment is hour-based, then we would show him that the hours were X and last month, you know, it was Y, and this is the difference, and this is why, and he can approve it from the email. We would allow the cash to flow, allow the payment to go through, and also reconcile for both sides. So nobody would actually need to do anything around these payments anymore. Pretty much like you do, you know, with Zoom, and AWS, and Netflix, and other online services just for the whole B2B sector.

Heather: I was gonna say exactly that right before you mentioned it. This to me sounds a little bit like a subscription model like Netflix or those mobile apps, but instead of B2C, it’s that B2B. And I just wanna make sure I understood you. You were saying that it doesn’t necessarily need to be the sort of predictable monthly transaction. So for example, with Netflix, we know the charge is X number of dollars each month. If there’s gonna be a change, then, you know, then there’s a whole new agreement in place. But it sounds like your company makes it possible to adjust and customize the agreement. So it works even in B2B transactions where the invoices are not on a regular monthly billing date or are not consistent amounts. Is that accurate?

Rom: Yeah, exactly. We took the same concept of security that you feel when you pay Netflix and Google, and these companies. And you feel safe that there are no mistakes and everything is correct on one hand. And on the other hand, we took all the needed infrastructure for these service providers that the only constant in the recurring revenue is actually changed. Every month, you do something else, other hours, and we made a safe place for these relationships between the service providers and clients to actually flourish, and not… You know, you have a lot of friction in these payments that actually come every month for both sides, both the payer, which needs to verify every invoice and go into a payment process, and also to the payee that needs to invoice and draft the invoice, and make sure there are no errors, and send it, and remind them, and collect the funds, and these collection calls, and all of these processes.

Heather: What are these accounts receivable departments doing with all this new free time?

Rom: It’s actually a valid question. We started with small businesses and what we see is that the business owners move these employees to actually… Or value-add services to their clients, or just allowing the company to grow faster as they can send more proposals, do the sales, and just help the business grow instead of just making it thrive with these tasks that try to make sure that that payments come on time, which in accordance to any research you’ll see usually don’t come on time.

Heather: You mentioned integrations and I know that can be a big sticking point for a lot of businesses. You know, if you don’t work with the accounting software that they’re functioning within, that can be a deal breaker. So what is Anchor’s approach to those integrations?

Rom: So we started by having a general flow with CSVs that you can just download and with the CSV, you can actually work with any type of accounting software and from there, we’re going just one by one where we started with the obvious QuickBooks Online, which is the mass market and QuickBooks Desktop. And we’ll move to the rest, Xero, and FreshBooks, and ZoHo, and Wave, etc. Well, every few weeks, you’ll see another integration.

Heather: You mentioned earlier security and privacy. And when it comes to payments in FinTech, protecting consumers, and in your case, business data, especially when it comes to payments, it can be a really sensitive issue. So what is Anchor’s philosophy when it comes to security? What’s your approach?

Rom: As I mentioned before, both my partner and I came from the security industry, the product is built super secure, PCI compliant, everything is layered out so no one can get into the same information and there is no possibility in making changes. But I think Anchor is also built a little more than that because we’re fostering these relationships between both sides. And we don’t look at the security, only on the infrastructure level, but also to make sure and take care of both sides.

So on one side, the vendor or the service provider has to have the flexibility needed in order to make changes let’s say to an agreement that we decided that I would pay you a thousand dollars a month, but now we talk on the phone, and there is more work that I’m doing, and I would like to add $200, I can actually edit the agreement live. We’ll send the other side for approval and we’re keeping a log of everything that happens that both sides can see it in a very, very transparent way which actually builds trust both in the system, but also between the vendor and his clients around the relationship.

Heather: What do you see in the future for B2B payments? I mean, what might this landscape look like long-term say, 5 to 10 years from now?

Rom: So as I see it and it’s also part of our vision, and what we’re doing, we wanna see B2B payments work exactly the same as online products. No more accounts receivable processes, no more accounts payable processes, the systems themself control the agreements. They have the controls and the safeguards that’s needed to make sure there are no risks, and allowing cash to flow between that businesses without any friction or things that hold the money back.

Heather: What’s next for Anchor? Is there anything exciting? Any projects you’re working on. Anything you could sort of give us the inside scoop on.

Rom: I wish I can do that inside scoop that we have…

Heather: Come on. Spill the secret.

Rom: …of the next few months. But yeah, we’re working on a few big partnerships that would foster and allow us to make faster payments, and increase the trust in the system and between vendors and clients.

Heather: All right. We have a segment we like to do on every show to close this out. It’s five questions, rapid fire. Rom, are you up for it? Are you ready?

Rom: Always.

Heather: All right. Here we go. Make a prediction about the immediate future of payments. Something you expect to see in the next 12 to 24 months.

Rom: So in the next 12 to 24 months, I think that we’ll see open banking become more and more common, and more and more types of businesses would interact and integrate into the payment system, which is actually something that Anchor is trying to do for these B2B service providers.

Heather: What’s one cool piece of payment or finance-related technology that you’ve come across recently that impressed you?

Rom: Oh. Something cool in the FinTech industry?

Heather: It’s all cool. I know it’s all cool.

Rom: Yeah. I think that the progress made in blockchain and it’s becoming slowly. I’ve been looking at blockchain from 2012, 2013 when I actually had the idea about Anchor first and it was the first technology I looked at to build the company on, but it wasn’t there yet. To see it starting to become a real thing is interesting and exciting.

Heather: That might just lead right into this next question. In the next five years, most people will make a purchase with either Bitcoin, Apple Pay, or some other thing. Which one and why?

Rom: So I think Apple Pay is already there. So not everyone because not everyone has Apple. Most of the market, I guess has Android. But I guess in five years, people will make purchases in blockchain technologies and cryptocurrency.

Heather: I’m excited for you to answer this question because now that I’ve learned you’ve started five different technology companies. What’s one piece of advice you have for someone considering a financial technology career?

Rom: I think the market for the past two, three years has changed a lot in the fintech sector and if you want to start working in this industry, you have to do the background work and check, and learn all the changes that are made in all the companies, in the specific industry or solutions that you wanna work in, and see that it’s really… If you run that in the future that you can… That it will find the place in the market because there’s gonna be a lot of pressure on a lot of products.

Heather: What’s the best business advice you’ve ever received and from whom?

Rom: I wanna give this to my father. Let me think of something that he said or make something up. The best business advice I can give to an entrepreneur is not to congratulate yourself too much on your achievements and not to eat your head too much on your failures because every decision is 50% chance, and persistence would go a very, very long way into success.

Heather: Yes, that is fabulous advice. Rom, that does it. This has been an absolute pleasure. If folks wanna get in touch with you or they wanna learn more about your company, where can they find you?

Rom: So first of all, I love helping people, businesses, and entrepreneurs. So I’m always happy to be in touch and they can find me in my email, rom@sayanchor.com or LinkedIn, and I’ll be happy to help.

Heather: Right. And as long as we’re still recording, I can’t help, but ask. Talk to me about your name, the meaning. When we started, you said, your name… Both your first and last name is unique. Talk to me about it.

Rom: Okay. So in English, my name is pronounced Rom, which is like the drink, which in Hebrew, it actually means height, very high. And my last name, Lakritz is around licorice, which is actually a candy and that’s from Venezuela.

Heather: Oh, my gosh. So you’re just like a party, your whole name.

Rom: Exactly.

Heather: I love it. Rom, thanks again for joining us today. We really appreciate it. Thanks for your time.

Rom: Thank you so much for your time, Heather. It’s been a lot of fun.

Industry Spotlight

Anchor

Anchor gets businesses paid on time, effortlessly. Anchor’s autonomous billing solution is a cloud-based platform that redefines B2B billing, collections, and payments. By providing an end-to-end billing and collections solution, and removing all manual labor from these processes, Anchor eliminates the risks of fraud and human error in B2B payments. Founded in 2021, Anchor is a U.S. company, with an R&D Center in Israel. Backed by market leaders including Rapyd Ventures, Entrée Capital, Tal Ventures, and additional CEOs and founders from the tech and finance space, Anchor brings the SaaS billing experience to the B2B service industry and is the first to support dynamic billing needs that change constantly. Anchor’s purpose is to make business owners thrive, by allowing them to focus their time and resources on doing business, not billing. Visit www.sayanchor.com to learn more and get started.