Invoice-To-Pay Makes The Leap Into Text Messaging

The text message was not an invention that had business communication in mind when it emerged decades ago, but companies of all verticals and sizes today find SMS and MMS messaging technology to be a useful tool to connect with customers.

With remote communication technology growing increasingly important, text messaging has become another potential path to revenue. But as with many accounts receivable (AR) workflows, while sending an invoice to a customer via text message can bring about convenience on both ends of a transaction, the process does not necessarily guarantee timely or friction-free payment.

A recent tie-up between B2B messaging SaaS firm MessageDesk and payments technology firm Sphere aims to further diminish the gap between businesses and their customers, and between invoicing and payments. Speaking with PYMNTS, Ryne Natzke, senior vice president of growth and strategy at Sphere, and Clint Vernon, CEO at MessageDesk, described the importance of embedding payments capabilities as deeply as possible within the invoicing flow to drive payments invisibility and connect businesses to capital faster.

Closing The Invoice-To-Cash Gaps

Through their collaboration, Sphere is integrating payment processing capabilities within MessageDesk, enabling businesses using the messaging technology to send invoices to customers via text message and enabling customers to either send payment forms back via text message or submit payment when they receive a click-to-pay invoice. The AR solution also supports integration with various accounting platforms for back-office reconciliation and financial management.

Natzke noted that the embedded payment functionality aims to “help facilitate those payments in a secure and transparent way that doesn’t take the user out of their workflow.”

“If you don’t take somebody out of their workflow, it’s more scalable, it saves the users more time and it helps collect more payments,” he added.

Closing the gap between invoice and payment continues to be a challenge in the invoice-to-cash and AR ecosystem, as well as a significant opportunity to deliver a better experience for payers. But at a time when in-person interactions between businesses and their customers are increasingly infrequent, empowering those businesses to more efficiently bill and collect payment from clients can be a vital strategy in accelerating cash flows.

“[Businesses] are seeing a smaller percentage of point-of-sale transactions and a greater percentage of invoices or touchless transactions,” explained Vernon, who noted that the pandemic has accelerated this trend. “To be able to have systems where everyone on the team, no matter where they are, can log in and say, ‘these invoices have been sent, these haven’t, let me follow up on this question that this person had’ — it’s made it possible for companies to accomplish a lot more, a lot faster.”

Putting It Into Context

Text messages were designed with individuals in mind, so it’s no surprise that the integration between Sphere and MessageDesk was similarly intended to ease the friction of consumer-to-business payments.

But with small businesses seeking technologies that can deliver a better, more familiar user experience, Vernon said he can imagine plenty of scenarios in which the technology is used to streamline B2B payments. “We get amazed, literally daily, at how many different use cases there are for text messaging in general,” he said. “It can very much be used in a B2B setting. I don’t think it’s universal — I don’t think every B2B setting is appropriate for text messaging — but there are so many different use cases and needs out there.”

Indeed, added Natzke, many of the same friction points experienced by customers also affect business customers. What’s more, he said, there is the potential for text messaging to find its way into accounts payable (AP) departments to coordinate with AP leaders who may have questions about an invoice and require a direct line of communication with a supplier or vendor.

Each billing scenario is different, he acknowledged — and depending on the context, there may be a variety of workflows that need to occur between the time of invoicing and the time of payment. But when it comes time to settle the bill, whether it’s a consumer or a business payer, enabling the user to facilitate that transaction with as little effort as possible — while still promoting transparency and security — is critical.

Whether that’s achieved through embedded payment functionality within invoices, billing end users on their most convenient platforms or enabling card-on-file for faster payment processes, organizations’ options for closing the invoice-to-cash gap continue to grow.

“It’s about reducing all of the friction, and moving that payment out as soon as possible,” Natzke said.