Providing billing solutions to the B2B industry: Interview with Rom Lakritz, CEO and Co-founder, Anchor
By Edlyn Cardoza
The constant regulation of the FinTech industry means the bar for invoicing, tracking usage, and revenue data are higher than in many other sectors. Simultaneously companies across every segment must find a way to maintain transparency, airtight security, and accuracy while laying the groundwork.
FinTech organisations’ legacy billing systems have started keeping up with the increasing demand for billing needs.
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 labour 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.
IBS Intelligence sat down with Rom Lakritz, CEO and Co-founder of Anchor, to discuss billing solutions in the B2B space.
What is Anchor doing differently, that is making businesses get paid on time, effortlessly?
If you look at what’s happening today, you’ll see that all agreements are paper-based; even DocuSign is paper-based. When I say paper-based, I mean only humans can read it. If you and I enter into an agreement, and I send you a DocuSign, it will give a lot of terms of my services and outline what you agreed to pay, etc. Everything from that point on must be done manually; someone needs to go into that agreement, understand what needs to be billed, and then go to another silo to check the actual quantity of hours and work delivered; then, you have to write up and register an invoice. Once the invoice has been registered, there is a risk of fraud and errors as the ‘research’ and inputs have been done manually- by a human.
You may input the wrong name, wrong email, wrong rate, or even the wrong amount of hours. Sometimes, companies duplicate invoices; this accounts for 0.5% of all invoices spent in the B2B world, which means a $1 trillion a year being duplicated, and paid twice. Sometimes, there is fraud, such as when dishonest actors hijack the accounts receivables or accounts payable process somewhere in the middle.
When you look at competitors and other products that try to solve these challenges, everyone said: “Okay, the agreement is paper, let’s use OCR, let’s use RPA, let’s use AI, machine learning, algorithms, manual work,” and all other types of solutions that at the end of the day don’t address the core problem, which is the agreement itself.
What we did with Anchor is build a platform that allows our clients to send an agreement that is understandable by humans and computers. When clients sign an agreement sent to them via Anchor, they approve those terms of payment: How they will pay and when they will pay. If the payment needs approval, for example, if you need to send a product and you need to approve receiving it, you set the rules of billing and payments when you sign the agreement. From there, Anchor takes care of everything automatically for the service provider. If we know, they get paid once a month, or in advance or whichever terms were inputted, we’ll collect all the information, build the invoice, send it, take the payment from the client, and do the reconciliation for them without the service provider needing to touch anything. As we developed this mechanism, we realised there’s no need to re-send an agreement with every change, as it can remain live and be changed in real-time every time something changes in the business or service provided. For example, if it was originally decided that the client would pay $1,000 a month, and now the price has increased to $1,200 a month, the vendor changes it in Anchor, the client approves it, and there you have a new agreement. You have the history of everything, the invoices, the payments, or any information you might need. Just like when giving Amazon your payment details once, there’s no need for you to provide them with your payment details again every billing cycle or change that’s made. You trust that they will not take money from you unless you buy a product, and you know you can get refunded if you get the wrong product. So we merged the way B2B does billing & payments today, and the way e-commerce does billing and payments today into a platform dedicated to service providers.
How is Anchor eliminating fraud in B2B payments, especially in an era where e-payments are the choice opted by most businesses and individuals?
I come from the cybersecurity industry, built a company from the ground up, and sold the company to Symantec for $250 million, so I understand cyber and fraud, which is a huge advantage. When discussing fraud in payments, most of the time, we’re talking about phishing. When an invoice is sent, someone can phish the email, change the rate, change things in the invoice, and change the bank account. It happens to VCs, to investment banks, and to companies- it happens to everyone. With Anchor, the invoice comes straight from the platform, goes through to the client and the bank account receiving the money, and cannot be changed. There is a single source of truth, which is secure and safe like a bank. Even if you take hold of that email, you can’t do anything with it.
We always ensure that both sides are right when payment is involved, meaning that the sender and receiver both agree on what the transaction should be. It’ll be harder for fraud because, as whoever was in the cybersecurity business knows, someone will find something, and then you fix it. But with payments, it was much more difficult than with other businesses. The errors couldn’t be eliminated because the process was still based on human involvement. We ask the client to approve the number of hours they received or ‘consumed’ of the service. Today, when a client receives an invoice, he needs to read everything written on it to understand better what’s going on and make sure that it’s right, that it’s for him, and that it’s the right data. All he needs to read now is if he received the service or didn’t and if he agrees to the number of hours or quantity of whatever was imputed in the invoice. He doesn’t need to go through all the terms from top to bottom. So, it saves a lot of time and money for the payer as well.
In December, Anchor recently completed a $15 million seed-funding round. What is making these investors invest in Anchor at such a valuation?
We’re putting a dent in the $200 trillion industry of manual payments. Take into account the number of problems that Anchor solves, from accounts receivable, research for billing, invoicing, payment, late payments, and revenue leakage. Now the payer doesn’t need to do accounts payables because it’s expense management; he doesn’t need to go to the invoice directly and invest all that time and money. When you look at the market and how it works, you see and understand Anchor. You understand that in 10 years, nobody’s going to sit and send an invoice and wait for the other side to receive it to start the process of paying for it.
According to you, how do you see payments evolve in the future?
I see that payments are going to be completely digital. I do believe that it is going to take time, but things will move to cryptocurrency as well. We’re not ready yet for cryptocurrency; it will take a few years before it becomes mainstream.
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