Aunt Flow Promotes Period Equity with Help from BILL AP Automation
Vermont Flannel’s mission statement is: “Dedicated to world comfort.” As the company’s name implies, that comfort comes in the form of warm, high-quality flannel clothing that keeps their customers warm and fashionable. Vermont Flannel originated the now-ubiquitous flannel “lounge pants” that can be seen across America, from the bedroom to the grocery store.
The company has even coined a term for their ethos: “Flantastic.” This positive attitude pervades everything the company does, from their handcrafted products made in the United States, to their use of environmentally-friendly 100% GOTS certified organic cotton.
When a company is this focused on quality, they don’t have time to waste on distractions like inefficient, paper-based accounts payable (AP) and expense management processes. Which is why Vermont Flannel made the switch to automated digital finance from BILL and Divvy, a BILL company.
Vermont Flannel: A retail and manufacturing business with a complex vendor network
When CFO Colin King and CEO Joe Van Deman joined Vermont Flannel, they quickly realized the accounting practices had to change. The company was still paying bills with paper checks that they printed, signed, then mailed or handed out. For a manufacturing company, this paper-based AP was anything but comfortable.
“We've got a couple hundred vendors that we're dealing with on a regular basis,” King says. They receive invoices from flannel producers, equipment repair providers, and landlords for retail stores and production facilities. “It was a lot to manage.”
They also needed a flexible system that could manage and pay vendor invoices in a variety of ways. “Our vendors have varying levels of sophistication,” King explains. “With some small contractors, they may just send a text message with a picture of their invoice, and then expect to get a check in the mail.
“Our larger, more sophisticated vendors have their own BILL account and can enter their own information and receive payments that way. We needed an AP solution that could do both of those services while integrating with our accounting software.”
Vermont Flannel uses QuickBooks, so they needed their AP to sync without requiring a lot of double entry. And the company’s accounting department works on a hybrid remote model, with King based in Indiana, so they needed the ability to manage their finances virtually.
From files and folders to everything on one platform with BILL
“We had a pretty large list of features that we needed, and there really wasn't anything else at the right price point like BILL that would pull in everything under one roof,” King says.
Tracking everything and knowing which invoices had or hadn’t been paid was a challenge because they did not have a central digital repository for all of their documents. With BILL, they can keep the entire vendor history in one place and know instantly if a given invoice has been paid.
“Before BILL, we just had everything related to payments in files and folders,” recalls King. “We would have to call vendors to figure out if we had paid them already. It was painful.”
The company also valued the fact that BILL has approval workflow and the dedicated inbox for invoices.
Automated AP and two-way sync between BILL and QuickBooks helps shift focus
With BILL in place, AP went from an hours-long, full-day process down to a point where they can review and knock out their daily AP in 15 minutes. With the block and tackle aspects of AP and expense management out of the way, the accounting team now has time to craft a budget and do other strategic work that will impact the business’ bottom line. “With BILL, we can knock out accounting on a regular basis, so we can actually do bigger ticket things that'll move the needle,” says King. Forecasting also became much easier after adopting BILL.
“We are pretty religious cash flow trackers,” King says. “Before BILL, we had to manually tally up the invoices to anticipate what was coming on the horizon. Now, it is very, very clear what the next six weeks to 90 days are going to look like in terms of AP.” Even better, the information from BILL funnels back into QuickBooks in real time so that the CFO can instantly see P&L and other metrics. “BILL and QuickBooks speak to each other and reconcile everything. The visibility has been a huge improvement,” King says.
Automation streamlines AP workflows
Vermont Flannel also found a lot of value in BILL’s recurring invoice feature. Some vendors do not actually send an invoice; they just expect payment on a monthly basis. “Small landlords are a great example of that,” King says. “They just expect a rent check.”
The recurring feature from BILL ensures that bills are paid, even if there is no invoice. “We can customize payment schedules that recur into perpetuity, or just repeat them for a couple of months,” says King. “BILL gives us a lot of flexibility to streamline recurring payments.”
And BILL’s AI saves the team a lot of time. “The autopopulate feature saves us from having to fill in invoice fields. It checks one more task off the list for our staff to have to remember,” King says. “That’s important for us, because we have vendors who still mail paper invoices that you can’t simply upload—they have to be manually entered.”
Vermont Flannel also uses BILL to process 1099 forms for contractors.
Going digital with expense management
A big source of business expenses for Vermont Flannel come from its six brick and mortar retail locations. The process would be that if a store needed seasonal decorations, the central office would write a check to the store. An employee would then cash it, then use cash to spend on whatever they needed, and then return cash back to headquarters.
“From an accounting standpoint, that's just a black hole,” says King. “There wasn’t a good record of where the money actually went. We just had little sheets of paper where everybody would write the amounts they had spent.”
To make expense management cleaner, easier to track, and more cost-efficient, they adopted Divvy. Each store was issued a Divvy card for buying supplies. They also provided cards to office staff for travel reimbursement, which they used for tasks like scouting for a new store location. In total, the company is using 12 Divvy cards.
For Kevin Desrouchers, Johnson Store Manager for Vermont Flannel, Divvy has been a hit. He says: “Divvy is an excellent, understandable, and easy-to-use platform that keeps track of all your spending and associated documentation. Would highly recommend it for the first-time user and for those who want to keep all of their data in one place without the need for wasteful paper copies.” He adds. “Divvy negates the need to keep petty cash and also centralizes all transactions, so you know exactly what is going on with the funds.”
Michelle Vincent, Director of Merchandising and Inventory, agrees: “I think Divvy is the best expense tracking system I have ever used. It makes assigning spend to categories fun (if you can believe it!) and easy. I've used a few very tedious systems in my past and it took hours to finish an expense report. I would dread the deadline every time. But with Divvy, the way it prompts you to categorize as you go and take a quick photo of a receipt allows you to complete your expense report on the fly.”
What’s next for Vermont Flannel?
Their six brick and mortar retail stores in Vermont have done really well for the company, so they are looking to expand that in the coming years. They also plan to test some pop-up locations. “Flannels are a really seasonal business, so we sell a lot in that fourth quarter, call it October to December and then into January timeframe. So if we can find good pop-up locations during that time period, that's really appealing to us,” King says.
As their business expands, BILL and Divvy will continue to make managing finances more comfortable for King and his team. Which means they can spend less time on AP, and more time being flantastic.