No matter what the industry is, every business need accounting, which is inheritably tedious and time-consuming. Legacy systems that are based on numerous established rules and templates have been used to manage accounting activities for years.
The methods to handle this issue are various, some companies still deploy the traditional way to deal with it, but the majority are shifting to the area of adopting AI in accounting and financing settings.
That’s basically the motivation behind Vic.ai, which bills itself as an accounting automation platform, leveraging the advances of AI to aid the human side of this field.
This startup was founded in 2017 by Alexander Hagerup and Kristoffer Roil, both Norwegian entrepreneurs. The startup is pioneering the application of autonomy and intelligence to digitally reshape accounting and finance processes to improve productivity, decision-making and ROI.
The company’s global clients include accounting firms, enterprise, and mid-market finance teams seeking to adopt automation and AI to improve financial performance. In order to increase its speed and scalability and ultimately allow customers to reimagine their accounts payable operations, Vic.ai is tackling the most tedious and inefficient chore in accounting – invoice processing.
New technology is transforming the way people work in every industry. It’s also changing the expectations clients have when working with companies, Vic.ai has been there all the time to boost that shift. But even so, the road to success hasn’t been easy, it took years and even decades. There are lots of insights about this startup that needed to be told. Read on to learn more about them.
2 Norwegian Entrepreneurs to Set Their Sights on US Market
We realized first-hand how manual and error-prone it is to enter, tag, and categorize invoices in the general ledger, and then submit them for review, wait for approval, and finally make payments.
Surprisingly, the majority of accounting teams still lack the ability to fully automate the processing of invoices, and they devote a substantial amount of time and resources to manually entering data and classifying it.
The two founders experienced those difficulties even prior to their decision in founding Vic.ai. In fact, accounting – a global, well-recognized struggle – is close to both of their hearts. Hagerup “grew up” in his mom’s accounting practice and Roil has assisted financially troubled companies throughout his professional life.
Hagerup and Roil wanted to infuse intelligence into accounting through an AI solution that can reason like humans and make accounting decisions so that employees can focus on more high-value activities.
That marked the beginning of the startup in 2017. It surely took time and perseverance to build this inventive technology. For years, the Vic.ai team trained its AI models with high-quality proprietary data comprised of invoices that were audited and correctly categorized.
The duo founded the company in Norway but had global ambitions since day 1, and now, we are already seeing Vic.ai getting more popular in the US.
Alexander Hagerup once joked that he took the most difficult path to building an AI company. He declared, “We are AI purists. It is simple to fall back on rule-based logic or human involvement when you hit technology barriers.
We have been impressed by Hagerup and his team’s unwavering commitment to developing autonomous technology that is genuinely ground-breaking and ready for mass production.
AI-Driven Instrument to Allow Faster Invoice Processing in Accounting
It’s pivotal to distinguish between autonomous accounting and true automation of accounting processes. The automation of those tasks is template-based and pre-programmed; it cannot adapt to the flexible and fluid business contexts that they encounter on a daily basis.
“Accounting is inherently number based, but there are endless permutations and fine distinctions that, up until now, require trained accountants to make judgements,” said Alexander Hagerup.
Large businesses spend millions to tens of millions of dollars annually on the processing and classification of financial transactions. Automation using templates necessitates human intervention to correct errors and evaluate output. However, platform models, such as Vic.ai’s own offering, can automate the work that was previously done by teams and people.
The difficulties still exist since processing invoices is still technically difficult. This is particularly true for industries like retail, healthcare, hospitality, and real estate, which are some of Vic.ai’s target areas.
“These industries inherently have a large number of invoices to process — and generally, a company processing more than 100,000 invoices per year is a great fit” for AI-driven solutions, Alexander Hagerup added.
Separately, a study of more than 400 chief financial officers by PYMNTS and Versapay called the “Strategic Role of the CFO Playbook” revealed that 92% of businesses are digitizing their accounts receivable and accounts payable operations.
Up to 75% of companies with sales between $25 million and $100 million claimed that the pandemic had made late payments worse. According to the report, increased days overdue have also been an issue for 60% of smaller businesses.
“Every invoice looks different — ingesting and understanding all invoices can be complicated for a rule-based solution, limited by the pre-programmed templates,” said Hagerup. “When leveraging artificial intelligence, we can have the technology apply reasoning and strategize on the data, and that’s when you can achieve autonomous accounting.”
Algorithms can reason on behalf of accounting people and can also adapt to new requirements, he claimed, citing the technology used by his own company. According to him, technological solutions can read any kind of invoice, classify invoice numbers, and determine the accurate prices involved.
He assured people that there is still a place for the human touch even in the age of technology. Accountants still play a crucial role, but their daily work can transition to higher-level, more lucrative occupations and opportunities rather than spending most of their time and energy on menial, repetitive activities.
There are many vendors out there trying to use AI aiding accounting tasks, but just a few of them stand out. AI is just a tool, but these companies need to find a better approach to comprehensively address the problem, Vic.ai, lines up in the front row for that reason.
Top-notch Approach That Sets Vic.ai Apart from the Status Quo
Hagerup says that Vic.ai uses the invoices that it processes for customers to improve the performance of its algorithms. Data on the platform is kept for seven years, but this business keeps U.S. and EU data “strictly separated” in accordance with GDPR and tries to remove personally identifiable information, according to him.
In a nutshell, Vic.ai is a technologically and innovatively innovative solution that completely upsets an underserved industry. The New York based startup collaborates with visionary leaders in accounting and finance who are embracing automation and AI to hasten the digital revolution and modernize antiquated procedures to produce better financial management.
Vic.ai’s artificial intelligence manages the entire accounts payable process from start to finish by imitating human judgment. When the algorithms are confident enough not to need human review, they process an invoice autonomously, entering the data, classifying the expenses, and sending it for approval.
Top developers have spent the last five years carefully crafting This growing company’s top-notch AI solution, which has been trained on more than 500 million invoices.
The longer clients use the flatform of this startup, the more autonomy they get. The platform’s autonomy component focuses on advancing and creating technology that can think for itself and make decisions.
Clients experience up to 80% process benefits by having the AI algorithms handle the work that was previously done by templates and human revision. The platform is presently functioning on a 97-99% AI accuracy, already approaching human-level accuracy.
CFOs and controllers from high-growth enterprise finance teams may eliminate costly errors brought on by weak internal controls, boost security, and manage staff with Vic.ai.
Unlike some AI vendors, this company has the great luck of inhabiting an industry that’s beginning to embrace automation.
The tech company’s client base reflects this. Hagerup claims that the business now has 60 enterprise clients, including HSB, Intercom, and Armanino, and that the number of active users has increased by 280% since 2021. Vic.ai’s contracted annual recurring revenue tripled in 2022 as compared to 2021 ($5 million), he added.
“As a true AI company, their platform is changing accounts payable automation into true autonomy. While some of our competitors offer solutions based on rules and templates, our unique approach sets us apart from the status quo,” Hagerup said.
He added, “Moving operations from on-prem manual routines via email or spreadsheet into a cloud-based solution with audit trails and compliance features is favorable to IT C-level managers … We’re well positioned for an economic downturn.”
Vic.ai competes against vendors such as Upflow, Glean AI and Quadient-owned YayPay in the accounts receivables management and automation space.
For background, MarketsandMarkets projects that the accounts payable automation market will increase from $1.9 billion in 2019 to $3.1 billion by 2024. The most formidable company is perhaps Tipalti, which garnered $270 million December 2021 at a $8.3 billion value.
However, it’s too soon to say Vic.ai is losing in the game. Since its debut, the startup has been drawing much attraction from people, and especially capitalists. We can see it more clearly when looking at their financial performance.
Vic.ai to Raise $52M for Enhancing Accounting Processes Using AI
In December 2022, the company revealed that it raised $52 million in a Series C funding round led by GGV Capital and ICONIQ Growth with participation from Cowboy Ventures and Costanoa Ventures.
The new cash brought Vic.ai’s total raised to $115 million. CEO Alexander Hagerup said that his business is being put toward customer acquisition in North America and adding purchase order match, payment execution and “spend intelligence” capabilities to the business’ platform.
In the next phase of its development, Vic.ai will broaden its AI solution to include corporate credit cards, purchase orders, and bill pay, providing a holistic spend intelligence offering that helps customers maximize their non-payroll costs and make more informed spending decisions.
Beginning in early 2023, the company will also provide new capabilities for safe and effective payment execution, as well as AI-based three-way PO matching; card transactions will follow later in the year.
Since its last funding round in series B with $50 million in September 2021, Vic.ai has tripled its headcount to 106 employees across 25 U.S. states and multiple European countries.
Additionally, its contracted annual recurring revenue has tripled, and the number of active users has grown by 280% from the previous year. The business anticipates further significant growth in 2023.
CFOs Bending Their Firms to Automation to Stay Competitive
To evaluate the influence of automation within finance departments, Vic.ai conducted a new study in May 2022. The final report based on a survey on 145 CFOs, titled “The Future of Automation and Intelligence within Enterprise Finance,”
According to the survey, most finance chiefs are investing more in automation to maintain their competitiveness in the face of a manpower shortage and rising operational expenses.
This study also found that 81% of CFOs see the potential of automation to optimize processes and resources and capture data insights across the finance function, with 58% planning to increase their investment in automation over the next 12 months, and nearly half expecting to achieve their goals within the next two years.
In fact, the study further revealed that 45% say they’ve already started to automate their payroll and invoice management processes, and a quarter say they have fully done so.
“This report revealed that finance leaders are ready to capitalize on the opportunities offered by AI and automation,” said Vic.ai CEO Alexander Hagerup.
Enterprise finance is at an inflection point, driven in part by the maturity and reliability of automation technologies. The advantages of automation are obvious, and there is increasing pressure to use smart, perceptive technology as operational expenses rise and it becomes harder to find specialized labor.
Finance leaders that are moving beyond digitization and using AI-powered automation are separating themselves from the competition and putting themselves in a winning position.
Enterprise finance is quickly evolving into a more strategic function as pressure continues to build for CFOs to align and drive financial strategy with business strategy. The necessity for finance to be more proactive and nimbler in leveraging data to discover the proper financial levers to pull at any time has also increased due to the world economy’s rising volatility.
And clearly, automation is the way to go. It is the only way that brick-and-mortar financial institutions will be able to compete with the fintechs and other digital forms of banking. We need to utilize AI to the fullest.
For today’s business leaders, who are constantly looking for ways to maximize every hour and every dollar, AI has become an essential business partner. By assisting businesses with streamlining their accounting, increasing accuracy and efficiency, monitoring accounts and cash flow, identifying inconsistencies, and producing reports that are simple to understand, AI is already stretching the boundaries of finance.
In that road, Vic.ai is aiding the industry to reach a better place by their breakthrough solution. The passion, energy, and humility Hagerup and the team at the tech business exhibited throughout the journey is deeply inspiring. Although the startup we are studying is expanding rapidly, we can’t deny one thing that, without a passion for the field, they couldn’t have been here today.