Purple designs and manufactures a range of comfort products, including mattresses, pillows, and cushions. We are based in Utah and began selling the “World’s First No Pressure Mattress," which we developed, in 2013. To date, we have created 30-plus patents, work with 1,350 vendors, and process 1,100 invoices monthly.
Like many other manufacturers, the COVID-19 outbreak significantly disrupted our plans — particularly our wholesale channel as states shut down non-essential businesses and issued shelter-at-home directives in mid-March. We reacted quickly by delaying investments in retail showroom expansion and pivoting resources to our digital channel in order to capitalize on the accelerated shift towards online purchasing.
One area of our company that easily shifted to remote work was our corporate finance office, as we had made some critical decisions early on to invest in modernization and efficiency.
As corporate controller, I manage the accounting and financial processes. Last year, my lean A/P team used a lot of manual processes and hours to process invoices. Weekly pay runs took nearly two full days to draft the list of vendors to pay. It felt like a giant black hole and wasn’t sustainable.
We decided that we needed to automate our accounts payable. We wanted full control of the invoice lifecycle, centralized communications and collaboration so we could better manage the process, backlog reduction, and a way to track all invoices to keep auditors happy (we are highly regulated as a publicly traded company).
We chose Stampli as our AP automation vendor because its functionality works well with our financial system, especially for invoices that go through PO, which is 65% of our volume.
Since we made this switch we have seen a reduction in OPEX, reduced invoice backlog by at least 50% and increased the speed of invoice approvals by 63%.
The advance preparations we made to digitally transform our AP helped us to weather the storm of COVID-19. Our quick pivot to online operations and other measures contributed to a strong start to the second quarter with a triple-digit percentage increase in DTC sales and significant cash generation for April and May.
A few lessons learned for other retailers looking to automate their financial stack:
1. Prepare, prepare, prepare
Don’t wait for a crisis to invest in technology. AP automation seemed like a nice-to-have until it became an urgent and critical need with the pandemic, and it helped to have the solution already in place so we could be proactive.
2. Focus and prioritize
There may be several financial processes to improve, but don't try to do it all at once. Start with the one causing the most pain or that needs to be fixed first. It will set the foundation for digital transformation to improve other areas later.
3. Address all stakeholder concerns right off the bat
Secure the key players’ buy-in before onboarding new tech. I met with my AP team stakeholders in the weeks leading up to the implementation to address their concerns and explain what the new processes would look like. This made the transition much easier.
Passionate about building world-class finance and accounting teams, Peter Taylor is the corporate controller at Purple Innovations, designer and manufacturer of comfort products. Prior to his work with Purple, Taylor served as financial controller at several companies including Winder Farms and Venafi. Taylor is a graduate of Brigham Young University.