Plastiq: 2021 Was the Year of Acclimation

Last year may well have sounded the death knell for paperwork as we know it, says Stoyan Kenderov, chief product and technology officer at Plastiq. Now, companies that have traditionally relied on manual payment and accounting processes have to adjust to the new reality — and embrace automation to serve customers accustomed to speedy, seamless digital experiences. Read his thoughts in the PYMNTS eBook, “In a Word: 50 Thought Leaders Sum Up 2021.”

In 2020, small businesses scrambled to adapt to lockdowns and new remote work protocols. Businesses where legacy, paper-based ways of paying vendors and getting paid were still predominant were very suddenly faced with a new reality. They needed digital and distributed ways to process payments in order to keep their businesses running. Businesses from across the spectrum had to retool to survive. Construction companies had to reevaluate safety protocols, brick-and-mortar retailers had to pivot to digital, and everyone had to learn how to be significantly more flexible. 

In other words, they had to acclimate.

Climbing the Mountain

For mountain climbers, acclimating to higher elevation is critical for success and survival. 2021 proved that businesses are no different. The ones that failed to acclimate did not survive. However, the ones that were able to acclimate to the new business environment thrived.

Fashion retailer UniversalStandard.com had to consider the future viability of physical store locations while ensuring that inventory from overseas vendors could be secured without disruption, all while doubling down on the need to reach consumers exclusively online.

Cosmetics manufacturer Dynamic Blending had to quickly automate payables, where the race to lock in supplies meant finding the fastest way to get large sums of money to vendors across the globe. 

Construction company Blue Azalea’s owner Joe Di Zazzo struggled with ensuring that largescale projects stayed on track in a time when supplies are scarce and deliverability is uncertain. 

Paying suppliers faster than the next guy for many businesses translates directly into positive results for their revenue stream and a competitive edge. Paying quickly and communicating payment delivery is paramount, as it keeps critical vendors committed to the success of the business.

When 2021 presented these businesses with a new landscape, they acclimated. They got savvy and speedy with their payments and did away with suddenly outdated ways of doing business. They moved to all-digital tools for paying and getting paid, found ways to optimize workflows and took the time to automate back-office processes. The consumerization of enterprise software and B2B payments made acclimation a smoother transition for the traditionally non-technical business operator. 

The Next Summit

2021 saw great change, but businesses will have to keep acclimating to an ever-changing environment going forward. Juggernaut consulting firms like McKinsey predict there is over $1 trillion in global value to be unlocked globally from improving payments automation. Smaller businesses that were slower to acclimate to digital before COVID are poised to reap the biggest benefit. 

A few of my predictions for the next phase of SMB acclimation:

• Small businesses will be moving every aspect of their back office to digital: Connecting all employees into automated workflows and having a central place from where to orchestrate payments, vendor management, accounting reconciliation and customer data will be the next mountain to climb.
• Improved automated notifications: Real-time alerts will ensure that businesses know instantly if something will adversely affect an order or when they can sit back and relax, knowing a deal is locked in.
• More real-time intelligence: Cash flow prediction tools will help them know how best to fund expenses, be it from a bank account, credit cards, line of credit or even via buy now, pay later options.
• Smarter customer outreach: Reaching customers where they are and offering a multi-channel approach to getting paid will become table stakes — making it easy to get paid in multiple ways that all automatically reconcile incoming payments to your accounting system and accelerate collection.

Incoming and outgoing payments — where everything syncs and reconciles automatically — will help small businesses spend more time on worthwhile tasks that are essential to growing their business, so they can acclimate fast to whatever mountain is next on the horizon.