A Tech Startup Transforms Vendor Management
A venture-backed tech startup uses Liquid to prevent overpayment and improve forecasting, saving more than $40K.
A typical SaaS startup works with half a dozen or more freelancers, consultants, contractors, and vendors to build their product and scale their growth. Between a dev shop, a growth hacker, a QA freelancer, an acceptance criteria consultant, a branding agency, an attorney, and an outsourced bookkeeper — managing the onboarding, management, and payment process for an outsourced team can be challenging.
Manual, inconsistent processes
We power the liquid workforce.
One of Liquid’s customers is a tech startup that had previously been using manual processes to receive and pay contractor, freelancer, and vendor invoices. This startup had a small internal team of employees but worked with more than 15 external workers. While they had worked with an attorney to create custom contracts and NDAs, they didn’t have an automated process for executing these documents.
During a routine periodic invoice audit, the COO found that the company had been overpaying their overseas QA automation tream by 2x for more than 9 months. The QA automation team had been continuously submitting invoices that overcharged the company. Because the company did not have an approval process in place and because these invoices were not matched to the Work Order, these invoices were paid every other week without any fuss. In addition, the Work Order had not been updated for new verbal agreements, adding additional complexity. And worse, freelancers or outsourced teams would often start work before work had been agreed to in writing. As their attorney had warned them, starting work without agreements was a compliance risk and a potential IP liability.
Standardizing and automating vendor onboarding
After this issue, this COO immediately began to look into solutions to solve their problem. The company started using Liquid and was astounded by how easy Liquid made managing their outsourced team. By signing up for a premium plan, the company was able to add their customized Master Services Agreement (MSA) and Confidential Information and Inventions Assignment Agreement (CIIA) into a customized onboarding process to be automatically used with all contractors, freelancers, and vendors.
Their VP Engineering said, “Getting a new dev shop setup took less than a minute.” An outsourced content writer said, “I’m impressed by how easy it was to use Liquid to agree to projects, send invoices, and get paid.” She also added that she appreciated how safe she felt submitting bank and W9 tax information over Liquid’s secure system.
Liquid worked with the COO and Chief of Staff to train their employees to create detailed Work Orders. The COO was thrilled to see that any invited team member could initiate or approve Work Orders (provided they had been granted the appropriate permissions). In addition, the Chief of Staff said, “I’m so happy to see detailed Work Orders, giving us visibility into all the work that’s been agreed to.”
Preventing overpayment and improving forecasting
The COO was thrilled about Liquid’s Work Order to Invoice matching feature. Before using Liquid, invoices were generally paid without checking Work Orders (especially since, in some cases, no written agreement was in place). After Liquid, the COO immediately sees if an invoice has extra line items or had extra hours, and then rejects or investigates further on a case-by-case basis. The COO said, “Liquid alerts me anytime a vendor sends me an invoice that doesn’t match the Work Order. I’ve easily saved $40K from this feature alone.”
Liquid worked with the CEO to set up an approval process where invoices had to be approved by each Hiring Manager (the person overseeing the work) before the CEO would initiate the payment. The CEO added, “Liquid’s automated invoice approval routing and process is revolutionary.”
Moreover, this SaaS startup’s use of Work Orders has provided additional visibility into cash forecasting. The Chief of Staff shared, “Liquid helps us gain visibility into project cost estimates for accurate financial planning and budgeting.” By using Liquid’s built-in Work Orders, this startup can quickly see how much has been invoiced and paid against a specific Work Order — and generate reports to forecast cash expenditures. The COO added, “Seeing a total estimate has helped us appreciate the magnitude of what we are agreeing to — seeing $50K looks a lot different than $5K per month.”
In addition, this tech startup has utilized the QuickBooks Online integration to connect and match their Vendors and Invoices to their QuickBooks Vendors and Chart of Accounts. This has eliminated the need to create duplicate data entry in both QuickBooks Online and Liquid, saving employees precious time. The Chief of Staff added, “The QuickBooks Online integration is just what we needed.”
Easy management of outsourced teams
By working with Liquid, the tech startup has transformed the onboarding, management, and payment of its outsourced team. The company is saving significant time and money every month with Liquid’s automated processes. Plus, the executive team can be confident that all work has the right agreements in place to protect the company and meet compliance requirements.
It’s fast and simple to onboard new freelancers, contractors, and vendors, so the company can easily add resources when and where needed. Using Liquid to support its operations, the tech startup can rely on its outsourced teams to help product development and growth.
Category: Spotlights Case Studies
Updated: April 6, 2021