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Nook payments screen

Nook targets accountancy's ‘payments pain’


Payments platform Nook aims to bring invoice processing, approvals and payments under one roof, reducing the risk of fraud and cutting down on manual entry in the AP process.

6th Jul 2023
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It’s not often that a software startup story starts with invoice fraud. However, Nook co-founder Henry Arnold in his previous role as a consultant observed one business that fell victim to a $3m scam.

The incident led Arnold and fellow Nook co-founder Joe Lines to examine the entire business-to-business (B2B) payments process and ask themselves how such incidents happen.

“We realised the majority of B2B payments rely on email and PDF invoices, and that’s a process that’s insecure and inefficient,” Lines told AccountingWEB. “We set up Nook to help digitise the process and bring the accounts payable (AP) function under one roof, reducing the risk of fraud and cutting down manual data entry.“

How does it work?

Nook users can process, approve and pay invoices or compile payment runs without logging into accounting software or bank accounts.

Customers can drag and drop PDF invoices into the system, or forward them to a specific inbox. The document is then processed to extract the supplier name, match it to a tax rate and a general ledger (GL) code. The system allows line-item extraction, allowing users to set tax rates and GL codes for line items.

Nook has two-way integrations with Xero, QuickBooks Online and Sage Business Cloud, allowing users to push invoices to their accounting software, with the data automatically syncing and any PDF attached.

The tool offers customisable payment approval workflows, allowing approvals to be made as simple or specific as the business wants. For example, a business may want any invoice totalling more than £5,000 to go to the finance director, or payments to certain suppliers to go to specific staff for approval. It also contains an audit trail to track payments.

Nook supports two types of payments. Firstly, users can use Open Banking to connect with their existing bank accounts. However, not all banks have kept pace with the changes in Open Banking, making tasks such as bulk payments difficult – for example, Barclays customers can only make between five and 50 payments in one group.

Therefore, to navigate these restrictions, the vendor has built Nook Wallets. This is a GDP or Euro e-money account that supports any type of payment: single, bulk, partial and scheduled. Users can also use the wallet to delegate authority to team members or accountants, use the scheduling tool and set up auto-reconciliation with the accounting software providers listed above.

Nook also has the ability to send and receive payments in 35 currencies. Once an invoice has been paid, remittances are automatically sent to suppliers to show invoices have been paid, with the aim of reducing the number of inbound enquiries, and offers a restricted supplier portal where suppliers can see a history of invoices paid and scheduled for payment.

Payments ‘a painful experience’ for accountants

For firms offering outsourced finance function services to clients, Nook’s wallet solution offers the accounting team one tool to log in, process, approve and execute invoice payments (or propose payments to the client for approval), and compile or process payment runs for clients.

“For accountants offering payments services to clients, the process is generally a painful experience,” added Nook head of revenue Simon Lofts.

“In the past, the only way for firms to make payments on behalf of clients has been to add staff to a client’s bank account, and this comes with risk,” he continued. “Accountants keep this sort of thing at arm's length for a reason. And if they can't actually make payments on behalf of clients, then the client often becomes a bottleneck in the process.”

Trade network could cut down manual intervention

Speaking with AccountingWEB at last month’s Digital Accountancy Show, co-founder Joe Lines laid out Nook’s plans for the future of business-to-business payments.

“Ultimately, our vision is to create a trade network of Nook customers that cuts out the need for businesses to exchange emails or PDF documents,” he said. 

“Invoices could be paid or queued up by data calls between company systems without all the manual intervention. It’s this direct connection that helps drive faster payments, better debt collection, and better enforcement of payment terms."

Replies (1)

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By D V Fields
06th Jul 2023 21:29

If he understood what a purchase ordering system was he might have been better able to consult rather than merely observe the fraud.

Might then work out one or two other things.

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