Automation of the payments ecosystem is a boon for SMBs

Adequate liquidity management is the perfect recipe for the success of an organization, which can be achieved through cash flow flexibility. It is the ability to play around with cash flows on a need basis.

The capacity to scale operations up or down in response to demand is crucial. Still, keeping your costs in check is vital to continue operating at peak efficiency and sustainably. With automated payments, businesses can achieve both goals by allowing access to real-time data about their payment flows and then using that information as part of a strategic planning process. Notably, 60% of the companies automating their accounting processes have reported a decline in cash flow mismatches, as per Pymnts.

Adopting an Intuitive Payment Experience

Intuitive payment experiences are crucial not just for the customer but also for your business. This is because they help concretize customers’ trust and allow them to stay loyal to the exceptional experience. What makes a payment intuitive is its ability to be executed in the least possible steps while being secure and having the customization option.

Intuitive payments allow users to stay loyal to their preferred financial institution, thus improving cash flow flexibility by enabling small businesses with ease-of-doing business through seamless and automated transactions. In addition, when done right, there is no need for expensive infrastructure upgrades or any high changeover costs involved. This means greater flexibility as well as lower operational costs overall.

The ease of doing business with AP/AR automation has a precursor in digitization, as agreed by 43% CFOs. While the same Pymnt study also found 70% of CFOs attributed digitization to building lifetime customer value. Here is how:

  • Taking control of the payment schedules and staying on top helps keep businesses out of spiraling debt.
  • The faster the payments get cleared, the higher the chances of availing attractive discounts and cashback in return for your enhanced credibility.
  • Using commercial credit cards seamlessly is another example of intuitive AP automation.

Visibility is Crucial for Better Planning

Automated payments are a great way to achieve cash flow flexibility, popularizing the concept of “pay later”. As per the report by Zapier, 90% of knowledge workers claim that it can help them save a lot of time and effort on routine administrative tasks. Automated payments can help better plan for SMBs that do not have large teams to track inflows and outflows, while FIs fail to serve them to their business’s content traditionally.

But B2B transactions are now garnering lots of traction given the niche products offered by fintech. Automated payments can help you achieve better visibility, allowing deferring amounts in the short term, owing to the certainty of possessing cash at a future date. This ray of confidence gained by better cash flow visibility amidst an increasingly uncertain economy is the biggest USP of AP automation.

The benefits of visibility are still two-fold:

  • You can use the deferment period to redirect the liquidity to working capital needs.
  • The payments are still made in time to prevent late fees with the help of an automated payment schedule as per the contracted credit period.
  • Having a net positive cash flow at all times can be ascribed to the greater visibility of the system.

AI-driven Forecasts Help Make Smarter Decisions

Forecasts derived from artificial intelligence help you plan for growth, as they do not take as long as manual predictions and are often more accurate. AI-driven projections also allow you to better prepare for cash flow as they quickly visualize various uses and sources of the cash flows to get a more comprehensive picture for the cash flow analysis.

The forecasting models are trained using historical data, making them very accurate in predicting future income streams, expenses, and profits based on past trends in these same fields over different periods (historical analysis). This feature especially allows businesses with VRPs to benefit from leveraging AI to predict flows, as it can be better trained for identifying trends over required periods with certain logical assumptions.

  • With automation-integrated invoicing software, you won’t need to input data to generate AI forecasts; instead, it will be a routine task.
  • These are abundantly helpful in identifying the causes of AR discrepancies. The sooner you know your DSO, the faster you can act.
  • Human-AI alliance also indirectly benefits suppliers through Invoice Factoring agencies that use it for document approval processing.

Embark Upon the High-Growth Path

A high-growth path can be defined as an economic trajectory of exponentially expanding businesses. The importance of high-growth courses for SMBs has only recently been unlocked post the pandemic infliction, but it’s here to last.

  • How do you choose your high-growth path? There are many dimensions, like addressing the efficiency issues in resource-scarce businesses and optimizing their potential to scale their businesses effectively.
  • This translates to having a trusted strategy for maintaining net positive cash flows.
  • How do you achieve success with a high-growth path? This significantly depends on sustaining that growth by plugging modern processes that ensure growth stability.
  • The same can be done by having a single interface for both AP and AR automation to generate a holistic financial report for the business across the department. This can help steer a high-performance business away from siloed stagnation.

Making the Streams of Cash Your Best Friend

Cash flow flexibility is a crucial component of any business. However, it’s not always easy to achieve. Automated payments can help you avoid the pitfalls of manual processes and reduce the time your team needs to spend on tasks like processing invoices or managing accounts receivable (AR). This makes cash flow flexibility easier for everyone involved, including customers, who don’t have to wait as long for their payments and get more accurate estimates of when your organization will pay them.

It has often been seen that businesses with highly revered ideas also end up defunct because they fail to monetize their products or services efficiently. This does not always mean having a blanket increase in the service pricing, but utilizing the cash inflows better and keeping the cash outflows under check. This calls for a well-formulated business model for a profitable venture with a predictable growth trajectory.

If you want to ensure that your business also reaps the benefits of such thoughtful cash flow planning, contact us to complete your automated payments.

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