Roughly one in 10 U.S. SMBs are concerned they won’t survive to see 2024, putting the onus on cash flow management to help them stay healthy and profitable. A new report explains how new payments solutions can help small companies improve cash flow management.
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The appeal of all-in-one platforms is well-known, but there is an important distinction to make about what they can do. Many platforms claim to handle both accounts payable (AP) and accounts receivable (AR), but few do this in actuality, according to O’Neill. If the platform is not providing end-to-end servicing of transactions, it is not really a comprehensive solution. To make cash flow move quickly, the entire transaction cycle must be addressed, and that happens most efficiently with one integration, as opposed to a patchwork of niche or incomplete solutions.
Buyers and vendors inherently have different preferences for making and receiving payments, something O’Neill called the AP/AR disconnect. They also want each other to win, however. They both seek strong, positive relationships and repeat business. The AP/AR cycle is thus less about aligning opposing forces than it is about removing friction from the process. 
To get there, both sides need more control, which comes from the visibility that data and artificial intelligence (AI) can provide. Increased visibility can also be enabled by using collaborative tools so both sides are empowered to eliminate friction whenever or wherever it occurs.
Many small companies are completely reliant on one individual for managing AP and AR.
These are the companies that should be most concerned about cash flow, as there are many intricate nuances with different customers that no one else could know about, should that individual leave. That is a fragile situation just waiting to happen, O’Neill noted, and it is a reality for many companies that are just one person away from a cash flow nightmare.
Equally problematic are those companies that build up walls of overhead trying to overcome their lack of information on transactions, which typically lead to more delays. Small- to medium-sized businesses (SMBs) have many competing priorities, and the perception exists that solving cash flow management is too expensive or complex. This climate of higher interest rates is putting pressure on companies to do a more efficient job of managing their working capital.