DIY Systems Hold Back Growing Enterprises That Need to Make Payments at Scale

Accounting software came to the aid of small and mid-sized businesses (SMBs) in a big way over the past two years, so much so that enterprise — where the big money is — got shortchanged.

That’s left a void in the market for businesses outgrowing mid-market status and graduating to the enterprise level, but still using in-house systems (often basic software and email) that don’t scale along with them.

Noting that there’s never been a better time to spin up a small business, Routable Co-founder and CEO Omri Mor told PYMNTS’ Karen Webster, “in the enterprise world, those problems get complex. I like to describe sending consumer payments as like sending a tweet. It could be 140 characters, there’s not too much going on, you can delete it, you’re not under a lot of pressure. And I like to describe a business payment as [akin to] pushing a bill through Congress.”

Often, he said, businesses choose to hold off on deploying a dedicated payments platform. And while kicking the can down the road may work for smaller companies, an inability to scale payments can actually hamper growth. DIY systems simply aren’t built to handle the multiple stakeholders and approval levels that are the norm at the enterprise level. And problems often start at the beginning of the process: vendor onboarding.

“With a lot of companies, if their vendor onboarding is done manually, the rest of the process is just going to be slow and everyone’s going to be frustrated.”

Automation eases growing pains by looking down the road in ways that overwhelmed finance teams often can’t.

“Let’s say you have 1,000 vendors and you pay them monthly. Great. What happens if you need to pay the same 1,000 vendors every week now? If you have to do it daily, that’s a lot more work,” Mor said.

See also: Readying High-Volume B2B Payments For An Era Of Transparency And Control

Growth and Friction

Friction created by growth at the enterprise level impacts payments flowing in and out.

“I’ve seen companies that are really good at paying and have a very clunky and inconsistent process of vendor onboarding. I’ve seen companies that are phenomenal at vendor onboarding, they have a tight process, [but] paying, remitting, updating the ERP is the problem,” Mor said.

A closer look at internal review and remittance is usually revealing, he said.

“Usually, one thing is really on fire and everything else is OK,” he said. “But it’s actively asking that and trying to be as empathetic as possible to their process.”

Given the variables created by remote finance and accounting teams, security is a prime focus of enterprise payments as mistakes can scale in their own pernicious ways.

Back to the “hair on fire” moments when Routable is often consulted, Mor said, “Imagine that you are an enterprise and you convinced engineering, product and operations to help you build an internal system. Then you realize that that internal system is outdated in the amount of requirements that you have.” Reconvincing those stakeholders can be a long, fruitless task.

“That’s where we can come in and say we have a platform that can actually put the power in your hands,” Mor said. At that point, a cascade of decision-makers typically starting with the controller and escalating to the chief financial officer “to talk about the fact that if this process is not fixed in six months there’s a looming kind of halt to the ability of the business to grow.”

See also: Routable Raises $12M In Series A For Expansion Of Digital B2B Services

Clearing ERP Roadblocks

Crossing from SMB to mid-market or mid-market to enterprise signals success, and firms need systems and processes with the headroom to scale payments, ideally with application programming interfaces and automation.

Often, Mor said, companies find that they have robust enterprise resource planning (ERP) and customer relationship management systems in place — but that their payments systems aren’t built with similar scalability in mind.

This becomes a question of “how can you keep the same rails or infrastructure for thinking about more vendors, more vendor communications, more W-9s, more payouts, more data that needs to be synced to the ERP, more reconciliation, but then reduce the amount of time that you need to spend on that over time?” he said.

Wasting finance team time is a lot like wasting money.

“I’ve done the wrong thing before,” Mor said. “I’ve built this in-house before, my business partner built this in-house before, a lot of our team members are folks who have worked on business payments in-house before. We are a group of people who are very passionate about not just servicing finance, but all the departments that have to work with finance to make this process seamless.”