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50 Best Companies to Watch 2022

The Pioneer in Connected Accounting: Lockstep

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“Our goal is to build an ecosystem of accounting solutions that automate workflow between companies.”

Before Lockstep was a company, its would-be management team interviewed over 50 accounting teams and surveyed over 900 accounting professionals in-depth. The interviews uncovered a common goal — to become completely digital. It was also found that over 90 percent of these professionals were using manual email and spreadsheets to manage their “digital” accounting workflows. They did not have any workflow automation that connected their accounting system with customer and vendors.

Sales has a CRM system like Salesforce, support has customer support systems like Zendesk. Even IT has a solution like JIRA to manage tickets and the status of requests, but accounting was left with just manual solutions. For other departments, this automation manages the communications coming in; they take over the group inbox and manage those workflows.

Accounting departments collaborate with customers and vendors using email. But today, there is not an accounting system that has an inbox to manage the collaboration. Because the accounting system doesn’t have an inbox, teams are relying on generic email software to communicate with customers and vendors. To address this huge pain point, Lockstep launched the first-ever accounting inbox, Lockstep Inbox, which connects email and the accounting software together.

Lockstep Inbox creates an online workspace, providing a single location for accounting teams to work together and automate workflows. Lockstep Inbox can automatically categorize emails belonging to which vendors and transactions. Lockstep Inbox can automatically compose emails critical to accounting workflows such as remittance or end-of-month statement. This vastly improves efficiency.

The Silicon Review contacted Matthew Shanahan, Chief Strategy Officer and Cofounder of Lockstep, who spoke about how the company is making a difference and plans to stay at the forefront. Here’s what he said.

“Our mission at Lockstep is to help accounting teams work better together. Today, accounting teams use antiquated collaboration tools such as emails and PDF attachments while other departments use online collaboration tools that streamline email workflows. Lockstep wants to bring that same power and flexibility to accounting teams.”

“Our team is made up of industry veterans. We have people on our team that spent time as controllers and have implemented accounting systems in the past. Our executive team has built previous companies from scratch. We are passionate about accounting and want to give accounting teams better tools than they have ever had. This knowledge and experience comes through in our approach to building the best tools possible for accounting teams.”

Lockstep is here to help accounting teams collaborate online and automate workflows between companies. “We refer to this as ‘Connected Accounting.’”

Facilitating Seamless Collaboration

Lockstep has a three-step process for achieving its mission. First, Lockstep makes the existing workflow between companies easier to track and manage. It provides the world’s first accounting inbox that integrates the existing email workflow with a company’s existing accounting software. With Lockstep integrating accounting and email software, an accounting team has the power to organize emails by customer, vendor, transaction, invoice, or even by credit memo. Accounting teams can now track and understand the workflow with their trading partners because the emails and the accounting software are integrated.

Lockstep allows the accounting team to track the status of each workflow that's taking place and ensure each email has been assigned and is being completed. Today, most companies manually track and complete this in Outlook or Gmail, where you don't have visibility into status or progress.

Leveraging automation takes transactional data out of the accounting system, merging it with email templates to send invoices and reminders, removing these manual tasks from the workflow. Email and accounting software integration is the first step toward helping accounting teams work better together.

The second step is to move the accounting workflow online, allowing an accounting team to collaborate with customers and vendors in a central location. Lockstep achieves this with a secure, password-less online portal for each customer and vendor to access their account.

One notable example of moving automating workflow online is new customer or vendor onboarding. Today, the workflow for most accounting teams is to write and send an email with an attached PDF form. The customer or vendor must fill out the PDF form and then send it back to me via email. Then the accounting team has to open that form and enter, by hand, the data into the accounting system.

This can all be moved online, making working together better. By simply sending a magic link to an online form, the customer or vendor can supply the needed data that updates the accounting system directly, saving time and minimizing mistakes.

After making the existing email workflow easier to track and optimize, and moving that email workflow to online collaboration, the third step is that Lockstep automates workflows between companies using APIs and new Connected Accounting applications. Using APIs in conjunction with other fintechs, Lockstep is developing an ecosystem of novel solutions such as automatically reconciling the books of customers and vendors.

“One of our customers was pulling 10 or more employees out of their offices one day each month for “folding parties,” where team members sat in a room folding paper invoices and stuffing envelopes to manually send out about 4,500 statements,” notes Shanahan. “As you can imagine, these “folding parties” were very costly and disruptive. Using Lockstep, the accounting team was able to have an online form where each of their customers could register an email address for invoice delivery. Once collected, Lockstep automates the creation and sending of the invoice, which not only ended the folding parties but also greatly reduced their Days Sales Outstanding (DSO).”

“We want to make adopting technology easier for accounting teams and expand the availability of solutions. The first way we are doing this is by providing accounting teams a free version of Lockstep Inbox that can be set up in minutes. Lockstep Inbox is intuitive and solves immediate pain points in accounting workflows. Lockstep Inbox also makes it easier to gradually add more automation as requirements change over time.”

“We are also allowing partners to leverage Lockstep’s APIs to build novel solutions. Our goal is to build an application ecosystem of accounting workflow solutions. We see a huge range of potential from covenant monitoring for financial institutions to automated audits.”

Matthew Shanahan | CSO & Co-Founder

Matthew Shanahan specializes in building new software categories and finding product-market fit. He has taken products from zero revenue through exit including IPO and acquisition. Matt has held senior positions at Globys, Azuqua, Scout Analytics, Documentum, and Accenture. He holds a BS and MS in Computer Engineering from the University of Washington.

“Our mission at Lockstep is to help accounting teams work better together. Today, accounting teams use antiquated collaboration tools such as emails and PDF attachments while other departments use online collaboration tools that streamline email workflows. Lockstep wants to bring that same power and flexibility to accounting teams.”