AI Alleviating Financial Compliance Automation

Febi steers an AI-powered revolution in digital accounting and automated tax compliance, restructuring how enterprises manage their financial operations. The company offers comprehensive solutions that seamlessly fuse efficiency with compliance. From AI-driven transaction management and automated file handling to smart invoicing, payments, and tax filings, Febi equips businesses with the tools necessary for streamlined financial management. Beyond being a mere platform, Febi is a strategic partner for startups, MSMEs, and SMEs, empowering them with tailored financial solutions to fuel success and resilience.

In an exclusive conversation with The Interview World, Amit Jindal, Co-founder and CEO of Febi, delves into the transformative potential of his AI-driven financial solutions for SMEs and startups. He sheds light on the diverse range of businesses utilizing Febi, offers insights into the company’s funding journey, highlights the critical challenges his platform addresses, and underscores the significance of Febi’s certifications and strategic partnerships. Jindal’s vision, detailed in this discussion, emphasizes how Febi is poised to drive the growth and resilience of startups, MSMEs, and SMEs. Here are the key takeaways from this illuminating dialogue.

Q: Could you elaborate on the AI-driven financial management solutions your company has developed specifically for SMEs and startups? How do these innovations enhance operational efficiency and promote ease of doing business for them?

A: I identified significant gaps in the accounting and financial industry, particularly affecting SMEs and startups. Most existing software solutions require accountants to manually enter data, leading to frequent errors that can severely impact business owners. For instance, something as simple as mistyping an invoice number—entering 1234 instead of 12345—can lock your GST, making it difficult to verify its validity. There are other issues too, like ensuring that vendors have properly deposited GST against your invoices. These problems can disrupt operations and hinder growth.

At Febi, we’ve addressed these challenges with our AI-powered platform. All you need to do is upload or WhatsApp your expense invoices, and within a minute, the system processes them. It verifies the data, checks the accuracy of the invoices, and generates a real-time balance sheet, ensuring you’re compliance-ready. Moreover, the platform provides immediate business insights, enabling you to make informed decisions in real-time.

Q: Which types of companies are best suited to leverage this platform, and how can they benefit from its features and capabilities?

A: We have specifically designed this solution to target SMEs, startups, and the MSME sector, enabling them to efficiently manage their accounting and compliance functions. Traditionally, these businesses handle document management manually, creating physical files that are cumbersome and inefficient. Our platform eliminates this by generating all documentation on the cloud, removing the need for physical files altogether. This digital transformation significantly benefits SMEs and MSMEs, the core sectors we aim to empower with seamless, cloud-based solutions that streamline their operations.

Q: What level of funding and resources does your company have to serve the industry, and how many SME sector clients are currently part of your portfolio?

A: In 2022, we embarked on the ambitious journey of building this automated accounting platform. Now, two and a half years later, we proudly announce the successful closure of our pre-Series A funding round, securing $2 million from esteemed investors including Lumis Partners, Virender Rana, former Managing Director of Payments at JP Morgan, Amit Chaudhary, Co-founder of Lenskart, Padmaja Ruparel, Co-founder of the Indian Angel Network, Rohan Bhargava, Co-founder of Cashkaro, Rajat Jain, Chairman of Fino Payments Bank, among others.

Just two days ago, we further solidified our growth by partnering with the Software Technology Parks of India (STPI), enabling us to support 1,200 startups under their initiatives. Presently, we have over 100 active clients benefiting from our services. This funding will empower us to engage with more startups, equipping them to prepare their financial records for additional funding and ensuring compliance. This is our primary objective as we move forward.

Q: You’ve mentioned that GST compliance is a significant challenge for small businesses and new entrepreneurs, where your platform offers valuable support. Beyond GST, what other key features or services do you provide to help them navigate these challenges?

A: The GST framework is a comprehensive solution that encompasses not only Goods and Services Tax but also income tax and measures to combat withholding tax evasion. It addresses numerous aspects of tax deduction on payments, streamlining the process significantly.

Our system automatically calculates and deducts the Tax Deducted at Source (TDS), ensuring compliance without requiring extensive tax knowledge. We have integrated all the APIs provided by the government, allowing us to inform users about the necessary withholding tax deductions seamlessly.

While a Chartered Accountant (CA) remains available for guidance, reliance on intermediaries diminishes with our platform. This shift empowers you to access real-time data, comprehensive dashboards, and cash flow insights, all of which facilitate informed business decisions.

Q: How do your solutions strategically address the key challenges faced by your customers, and in what ways are they positioned to drive transformative outcomes?

A: Currently, we operate as a web-based platform, with plans to launch our mobile app soon. Our accounting solution encompasses three essential components.

First, users can generate revenue reports directly on the platform. Second, we have integrated banking capabilities, allowing users to manage banking functions seamlessly within our ERP system. Third, we address expense invoicing, a process that remains largely manual in India. Users can easily upload documents to the platform, or send them via WhatsApp or email.

Our system automatically processes all documentation, creating real-time balance sheets and profit and loss statements. It ensures compliance with withholding tax, income tax, and GST regulations, delivering accurate financial figures in just minutes.

Q: Have your offerings received certifications or endorsements from the government and other relevant stakeholders, and how do these validate the quality and compliance of your solutions?

A: We have obtained ISO 27001 certification, ensuring compliance with all IT regulations. Additionally, we are integrated with several banks, which have conducted due diligence on our operations. This collaboration empowers us to deliver enhanced services to our clients.

Currently, we have partnered with seven to eight private sector banks to offer their services to our startups. Furthermore, we are actively discussing partnerships with public sector banks to broaden our service offerings.

Q: How do you envision your services empowering entrepreneurs soon, and what specific impacts do you foresee in terms of their growth and resilience?

A: The data surrounding startups reveals a sobering reality: nine out of ten startups fail, primarily due to funding issues. Delving deeper, we find that a significant factor in this failure is the due diligence process conducted by investors. Many startups struggle with this process because they lack proper documentation or compliance, hindering their chances of securing funding. Existing platforms fall short in addressing these gaps within the industry.

To illustrate the funding challenges, the primary issue often lies in the due diligence phase. Startups frequently encounter difficulties due to insufficient documentation, often resulting from reliance on physical records. This not only makes it hard to locate necessary documents but also leads to compliance failures. Our platform addresses these issues by creating a cloud-based trail that links all transactions, ensuring that startups are audit-ready and due diligence-ready in a matter of minutes. Consequently, this enhances compliance and significantly improves their chances of securing funding.

Moreover, statistics show that 40% of entrepreneurs waste time on non-revenue-generating activities, such as administrative tasks and managing their books. Our platform streamlines these processes, allowing startups to focus on what truly matters: growing their business. We need such services to empower startups to break down barriers and achieve success.

The startup ecosystem is seeing an influx of legal and GST consultants. To stand out in this competitive landscape, we offer a distinct advantage, providing a seamless experience for businesses. Our platform enhances collaboration among consultants, Chartered Accountants (CAs), and legal professionals, helping them work more effectively together.

Furthermore, our technology minimizes manual errors, reducing issues like duplicate payments and erroneous entries. Leveraging AI, we empower our community to eliminate these challenges, paving the way for a more efficient and effective operational landscape.