Settle Says Future of CPG Payables Is Industry Specific and Cash Flow Optimized

Think of the consumer packaged goods industry, and you think of the monoliths.

Procter & Gamble, for example, has been around since 1837 and has 65 brands on its current roster. Colgate-Palmolive has been in business since 1806 and has 32 brands.

What gets lost in the discussion are the startups and mid-sized companies that enter the business and sometimes exit. Each year, 30,000 new CPG brands launch, but only 15% of them get past the first few years of their existence, Alliance reported, citing figures from Nielsen.

But they all have one thing in common: a need for cash flow and cash flow management. With that in mind, FinTech firm Settle combined a working capital solution with accounts payable (AP) automation and other cash flow management tools. It added a new level of detail to those tools Thursday (Aug. 8), further making its case for specialized financial technology solutions.

“It is incredibly difficult for CPG businesses to plan,” Settle CEO Alek Koenig told PYMNTS CEO Karen Webster. “And one of our jobs here should be to give them the tools to be able to plan better and make smarter decisions.”

The Settle platform is designed to provide a comprehensive view of cash flow. The holistic approach ensures that all product lines work better together, ultimately helping businesses grow more efficiently, while the enhanced financial control allows CPG businesses to make informed decisions, optimize working capital and allocate resources more effectively.

The company announced two new features for its CPG suite Thursday: landed costs and Universal Catalog. Both have unique properties in the context of the CPG vertical.

New CPG Suite Features

Landed costs are the total costs of getting a product from the factory to a customer’s door and can be hard to predict at CPG scale. Landed costs include shipping fees, insurance, and any customs and duties due if the goods cross borders.

Universal Catalog is Settle’s product information management solution built for CPG brands that is natively synced to the end-to-end procurement cycle. Universal Catalog integrates with brands’ sales platforms (e.g., Shopify), warehouse management systems and accounting systems to ensure product information is accurate.

Product lines and bills of materials are managed with Universal Catalog, which Koenig said will form the foundation for faster, more efficient and reliable inventory management and forecasting. By automating these calculations, the platform provides businesses with a clear understanding of their variable costs, enabling better pricing and margin management.

At the heart of the Settle CPG suite is AP automation, and as Koenig told PYMNTS, he believes the future of this function lies in vertical-specific solutions. Koenig added that he doesn’t foresee a short lifespan for blanket AP platforms, but at the same time, he anticipates a growing number of vertical players addressing unique requirements of different industries, ultimately diminishing the dominance of non-specialized offerings.

“Over time, these vertical players nibbling at the feet of blanket platforms might lead to their decline unless they branch out into these vertical solutions themselves,” he said.

By addressing the inefficiencies in traditional AP systems and integrating innovative features, innovative AP platforms are already setting new gold standards in the financial operations of leading companies.

“There’s a lot of work financial and operations people are doing over and over and over … automation can make that a lot easier for them and give them time back,” Koenig explained.

In an industry like CPG, where margins are thin and efficiency is paramount, companies are constantly seeking ways to optimize operations and reduce costs, positioning AP transformation as a strategic imperative for firms looking to leave traditionally cumbersome and resource-intensive workflows behind by embracing modernization.

The AP process in CPG companies involves managing a high volume of transactions, from processing invoices to ensuring timely payments to suppliers.

“There’s probably like 10 to 15 types of software [that companies] are using,” Koenig explained, referring to the various Software-as-a-Service (SaaS) systems a typical business might employ. By building components natively that always work together, Settle can save time for businesses, helping them streamline operations and reduce costs.

Traditional manual processes often lead to inefficiencies, such as time-consuming data entry, lost or misplaced invoices and lengthy approval cycles. These inefficiencies can result in late payments, strained supplier relationships and missed opportunities for early payment discounts.

Integrating With ERP Systems

One of the decisions Settle made early on was not to replace existing enterprise resource planning (ERP) systems but to integrate seamlessly with them, Koenig said, highlighting integrations with popular systems like QuickBooks, Xero, NetSuite and others.

This strategy allows the company to focus on making the AP process more enjoyable without the monumental task of building an ERP system from scratch. Instead, the company aims to make processes like paying vendors and creating purchase orders “delightful,” Koenig said, a term rarely associated with such tasks.

Koenig’s own past career showed him how “account payable software was very clunky to use” and “wasn’t really enjoyable.”

“I hated logging into it,” he said.

That’s what inspired him to create Settle.

One of the most intriguing aspects of Settle’s solution is its potential to use data for competitive advantage, Koenig said. He said he is adamant about protecting customer privacy but sees value in providing anonymized benchmarks to help businesses understand how they perform relative to their peers.

“Maybe you want to negotiate better vendor terms, or maybe you’re paying too much for shipping,” Koenig said. “Being close to this information for the brands we work with will hopefully attract other brands to come.”


Canadian Banks’ Earnings Clouded by Economic Uncertainty

Canadian banks are set to announce their quarterly earnings this week, and while analysts are optimistic about the results, they note that potential U.S. tariffs may dampen the mood.

The Big Six banks — namely, Royal Bank of Canada, Toronto-Dominion Bank, Bank of Nova Scotia, Bank of Montreal, Canadian Imperial Bank of Commerce and the National Bank of Canada — are expected to post moderate earnings growth overall for their first quarter, according to a Monday (Feb. 24) report from The Wall Street Journal (WSJ).

However, a possible trade war with the U.S. means that these banks will need to shore up capital to support elevated credit-loss provisions, or money set aside for loans that don’t get repaid.

“Several analysts have trimmed core earnings forecasts for the sector in anticipation of higher credit-loss provisions on currently performing loans,” the WSJ noted. “Analysts at RBC Capital Markets project total credit-loss provisions will increase about 32% on the prior quarter and about 70% year-over-year across all six banks, to 5.6 billion Canadian dollars ($3.95 billion). Higher provisions will eat into earnings for this quarter.”

On Feb. 1, President Donald Trump enacted a 25% tariff on imports from Canada and Mexico, as well as a 10% tariff on Canadian energy, but later placed a 30-day pause on the levy.

According to a Monday report from CNBC, Trump said he intends to resume the tariffs once the deadline expires next week.

When the tariffs were first announced, Canadian Prime Minister Justin Trudeau announced retaliatory tariffs that will impact U.S. beer, wine, bourbon, fruit, fruit juices, perfume, clothing, shoes, household appliances, sports equipment, lumber and plastics.

As PYMNTS noted at the time, industries reliant on cross-border trade are likely to be the worst affected by a trade war.

“The most immediate impact of tariffs is often felt in supply chains,” PYMNTS wrote. “Industries that rely on the seamless movement of goods across borders are particularly vulnerable. Tariffs, whether they are imposed on raw materials, intermediate goods or finished products, drive up the cost of production. For manufacturers, this often means higher prices for components, parts and materials sourced from countries involved in trade disputes.”

Consequently, businesses have scrambled to diversify their supply chains, shifting from a “just-in-time” to a “just-in-case” model to hedge against geopolitical risks and economic uncertainty. 

A potential trade war has also made consumers uneasy, with consumer sentiment down nearly 10% from last month and about 16% lower than a year ago, according to February data from the University of Michigan’s latest Consumer Sentiment Index.