Small- to medium-sized businesses (SMBs) face a number of operational challenges when managing their growth.
From accounts payable (AP) and accounts receivable (AR) tracking to making sure liquidity strategies are optimized for scale, adding the latest payments technology to a financial management strategy can be daunting. Here are five common areas where SMBs considering payments modernization might see a need for a modern approach to AP/AR.
1. Manual review of invoices
When invoicing isn’t automated, SMBs can lose control over liquidity and visibility into cash flows. Manual invoice entry can also lead to errors, which, in turn, can lead to companies spending more time fixing incomplete payments.
2. High payment/credit costs
When payment choice isn’t available, businesses may have to resort to high-cost credit options or fee-laden payment methods to meet their liquidity needs.
3. AP/AR not integrated with other systems
When AP/AR data isn’t integrated with other core systems, such as accounting software or enterprise resource planning platforms, SMBs waste time manually entering data and risk making errors that corrupt cash flow forecasting.
4. No single view of cash
When all is said and done, accurate data drives profitable business decisions. When SMBs have access to a single view of their cash, they can craft long-term growth strategies using accurate forecasts of cash flows and up-to-date liquidity management options.
5. Lack of payment choices
Multiple ways to pay provide buyers and suppliers with more control over their cash flow, which means improved payment choices can substantially impact an SMB’s bottom line.
Just like their customers, SMBs want easier payment processes but need to contend with a space where easy digital payments have often been elusive. For more on this topic, download The Future Of Business Payables Innovation Report, a PYMNTS and Plastiq collaboration.
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