SMB Payments Move in Digital Directions

It’s fair to make the generalization that every company, regardless of size, is interested in speeding up operations and maximizing cash flow. The AP organization is a great place to look for improvements. Bottom-line business performance today is impacted by an organizations’ ability to respond to customers’ needs—and that requires maintaining smooth, increasingly data-driven operations that are largely dependent on suppliers and other partners.

For SMBs, in particular, the outcomes of decisions that relate to supply chain management (procurement through payment) can weigh heavily on marketplace and financial success. That’s what makes developments like PayPal’s new Pay Pal Business app so compelling, and even game-changing, for AP professionals.

Technology Solutions for SMBs’ Pressing AP Problems

It’s important that technology solutions adopted by SMBs to improve their AP functions carefully target a company’s particular pain points. Aberdeen Group’s research report How SMB Leaders Best Achieve Invoice Management Goals examines the AP challenges faced by small and medium sized businesses and what companies are doing to address them. Their research identifies these as SMBs’ top AP invoice management priorities:

• 41% Avoiding late payment penalties
• 34% Capturing early payment discounts
• 33% Improving supplier relationships
• 26% Managing large changes in invoice volume (i.e. seasonal spikes)

Strategic steps commonly taken to manage these issues include centralizing invoice processing (51%), investing in automated invoice receipt and workflow processes (44%), integrating payables with other back-end systems (41%), and standardizing invoice management processes and workflows across locations/business units (24%). Again, a company will implement a solution—or combination of solutions—to achieve their particular goals.

But in the big picture, SMBs—like larger companies—are streamlining their processes to gain operational efficiencies and optimize cash flow. Moving away from manual handling and automating leads to more accurate, timely invoice processing, which can help the organization avoid late payment penalties and even earn early payment discounts.

For further insights, turn over to Top Performing AP Teams Add Strategic Value Through Automation Technology and 5 Factors to Consider While Developing a B2B E-Payments Strategy.

The Significance of PayPal Business

In their research report ePayables 2016: Eyes on the Prize, Ardent Partners shared innovations that their survey respondents say will help them focus on strategic AP growth:

• Moving to a truly “touchless” invoice environment (58%)
• Agile reporting dashboards (47%)
• Mobile solutions for invoice approval (42%)

The key here is mobile capability and its impact on the way SMBs manage their accounts payable and invoicing. And that’s exactly where PayPal is entering the scene with their new PayPal Business mobile app. As explained in TechRepublic’s PayPal Pushes Into Mobile Commerce with New App for Business Users, PayPal “aims to prepare SMBs for the growth of mobile.”

Learn the 3 Ways Mobile Technology Enhances the B2B Payments Experience and find out why you might want to Incorporate Mobile to Speed Your Payments Process.

Recall that 26% of SMBs in the Aberdeen Group survey are interested in managing large changes in invoice volume. This makes the app’s holiday season release significant. According to PayPal, SMB are experiencing seasonal spikes in activity and want the ability to keep track of invoices, payments, refunds, withdrawals, customer lists and balances via mobile tools. The new PayPal Business app enables businesses to get paid easily by creating and sending customized invoices, manage account activity while on the go, and view all their customer information in one place.

PayPal is making it that much easier for SMBs, who have adopted electronic processes to incorporate mobile capabilities into daily AP workflows. On the flip side, it should be noted that these SMBs’ suppliers have also adopted the functionality, pointing to an increasing interest among payments professionals on both sides of the AP/AR equation to continually optimize the way they work with technology solutions. While this evolution may be moving faster for more agile smaller businesses, thanks to tools like PayPal Business, enterprises have access to solutions of their own—and we will continue to explore their growth and development in the industry.

In the meantime, take a look at How to Prepare for the Future of Accounts Payable (Infographic) and Five Things to Look Out for in the World of Payments in 2017.