How To Solve B2B Payments In The Micro-Business World

A slew of innovations are popping up to make it easier for businesses to stay ahead in a digital world, especially when it comes to traditionally slower processes like accounting. But Mark Girvan, VP of Sales and Business Development at FreshBooks, says most players aren’t focused on delivering cloud-based B2B payments solutions to sole entrepreneurs and companies with just a handful of employees. PYMNTS sat down with Girvan to find out how FreshBooks is setting out to mend what’s broken in the B2B world, and streamline small business capabilities like expense tracking, project management, time tracking and payments.

So Mark, introduce us to FreshBooks. What problems do you solve?

MG: Absolutely. FreshBooks is a cloud accounting piece of software that focuses on solving problems for the small service-based business owners out there. Our typical clients range from sole entrepreneurs all the way up to companies of 10-20 employees.

We’re focused on providing an experience for our clients where they, one, don’t have to know accounting to use our software, and, two, they’re looking for a simplified user experience. Typically, they’re looking for an accounting experience that’s driven around an invoice-based service business. They’re billing clients for time, materials and expenses, and wrapped around that they want enhanced capabilities around expense tracking, project management, time tracking and of course payments.

What do you believe is really broken in B2B payments and what role can FreshBooks play in solving these challenges?

MG: There are several areas we’d look at. Prior to us starting to focus on this area, we had the fortunate ability to watch lots of our clients struggle with B2B payments and get onto various networks and gateways themselves.

What struck us were several items, including the fact that many of our clients found the whole onboarding process around payments quite difficult. The user interfaces, the amount of paperwork, the know-your-client or customer steps were quite arduous, and what we saw from a distance was a lot of people giving up in the process and never making that switch from the cash and check world over to payments.

The second thing we noticed was most of the clients that were trying to deliver B2B payments to our customer base, which again is that small micro-business set, weren’t set up to provide adequate customer support. Whether it was during the onboarding process or throughout the tracking of any transaction, the transparency was locking the ability for customers to get an answer and really understand what was going on was difficult. As small business owners, it wasn’t something they could easily take the time to do.

The third thing we noticed was a lot of lack linkage or integration between the whole billing and invoicing process all the way through to how payments happen, and how you were able to surface a payments opportunity to our clients’ clients in an intuitive, easy to understand way.

How would you describe the state of digital payments today? Where do you see the future of digital payments in 2015 and beyond? 

MG: Sure. I think there are some trends that will change significantly within 2015 and beyond. The first phase of B2B payments for our customer base specifically, a lot of folks took the traditional B2C model and brought it over to the B2B world. Whether that was the risk profiles, or service-level expectations, I don’t think those things translated over very well. So what I would see first is a lot more services like FreshBooks and our partners in the payments space to allow for a B2B experience that’s true to the type of transactions we’re seeing.

The second thing I would see in the B2B space is the predominant amount of traffic on the payment networks that really revolves around retail POS restaurants. There’s a whole set of commerce for service-based businesses that have not adopted payment anywhere near to the degree that the other verticals have. FreshBooks sits right around all of those customers that are very service-based. That can be a creative professional, an accountant, a management consultant or a trade person. There’s a whole set of individuals that will get on the payments rails for the first time and do it in a significant way. I see them significantly adding to the amount of commerce that is done inside B2B.

Then the third thing we see is the melding of all the different types of payments out there – whether they be credit cards or mobile enabled or ACH. Small business owners are constantly out and about, and the ability to work and access information from anywhere has a huge effect on their bottom line. Our customers are increasingly using mobile to send invoices, track payments, make notes, and log expenses. At the same time, their clients are also becoming more engaged on mobile: they check their phones up to 150 times a day, they open 100 percent more invoices on mobile today than they did in 2011, and 1 in 5 FreshBooks invoices are opened on mobile. Our customers can reach their clients wherever they are, making it easy for them to access and pay for their invoices. There is a huge opportunity here for innovation to offer seamless mobile experiences to streamline their workflow for maximum efficiency and productivity.

Looking ahead a little bit, what is next for FreshBrooks – what kind of projects are you working on that you can disclose?

MG: At a high level, an organization like FreshBooks plays a threefold role. One, we’ve been innovative in the user experience category – thinking hard about the great payments technologies and gateways out there, but where they have been lacking is figuring out how to onboard a really small, three-person business in a creative way, keeping them all the way through the payment experience. That’s a massive area of focus for us.

We also collect a lot of data about our customers because they’re sitting inside our accounting platforms. Our ability to speed up payments by being able to share a lot of data about clients with our networks partners is another place we can innovate, so you’ll see us change the dynamics of that as well.

Then the last part I commented about earlier is all around the aspect of support. Our clients and FreshBooks, on our accounting software side, are known for excellent customer support. There are no phone trees at FreshBooks – when you call, you get a live customer support individual within an average of one and a half minutes. Being able to blend that support model in and around payments in a cost-effective way will be fairly innovative and game changing for small businesses.

Mark Girvan

VP of Sales and Business Development, FreshBooks

Mark is a general management executive with a track record of delivering significant growth in new business markets. He prides himself on being a results-oriented leader who focuses on operational excellence through developing teams and motivating change across functional groups. Outside of work, Mark’s passions include his family, canoeing tripping, a weekly attempt to reclaim past hockey glory and his yearly pilgrimages south of the border to watch the greatest sport on earth—NCAA basketball. At FreshBooks, Mark leads the efforts to grow our community of loyal micro-business customers.