Managing liquidity and automating receivables and payables are important innovations for small businesses.


The owner of the company gathers his employees and says: “You have worked very hard this year, and as a result, the company's profit has increased significantly. As a reward, I write each of you a check for $ 5,000. " Excited with joy, the staff began to congratulate each other. And then the boss adds: “And if you show the same zeal next year, I will sign these checks!”
- Author unknown

Most of all over this situation will laugh those who know firsthand this problem, that is, small business owners. MB - the engine of social and economic development in any country. The states that have created the most favorable regulatory environment for the creation and maintenance of the simplest business enterprises are, as a rule, at the top of the rankings of prosperous countries. According to the US Small Business Administration, the MB ecosystem in the country is a very large industry. This category includes 99.7% of all businesses in the country. More than half (54%) of all sales in the United States occur in the stores of 28 million MB entities. In addition, small businesses give the country 55% of all jobs and have already created 66% of new jobs since the 1970s. More than 600 thousand franchised small businesses generate 40% of all retail sales and provide jobs for 8 million people.

Opening and running a small business can be difficult, and therefore banking services for business entities are one of the most important areas of the financial services industry. However, in the case of the traditional sector, there is one caveat: business banking does not go beyond simple settlement and cash services, limiting itself to providing a bank account and line of business lending and in no way touching on other vital aspects of entrepreneurial activity.

In the meantime, for small business owners, successful enterprise management goes beyond the creation of a bank account, because, among other things, it includes risk management, compliance with regulatory requirements, accounting, bills, taxes, payroll and much more. In this sense, automation of cash flow management is one of the most important guarantees of sustainable long-term commercial activity. According to the report of the SAP subsidiary Concur , the average cost of processing invoices is $ 12.9, while the median price, according to the Information and Image Management Association ( AIIM ), is $ 7.9. Interestingly, AIIM analysts found some correlation between the average cost of processing invoices for payment and the size of the organization.

Automation promises to reduce the cost of processing invoices for payment by an average of 29%. Such a reduction in costs may ultimately turn into a savings of 300 thousand dollars for an organization that processes up to 10 thousand bills per month. Despite the fact that the analysis of the movement of liquidity is one of the priorities for top-level financial managers, the AIIM study found that 22% of all businesses can predict medium-term cash flows with catastrophically low accuracy of only 5%.

Such costs, however, do not provide a holistic understanding of the problem. According to the Concur study, manual paperwork and partial automation of cash flow management also conceal other non-obvious costs that lower return rates. These costs arise from the manual handling of a large number of unusual situations, the pressure of regulators, the risk of fraud and the fragmentation of systems.

Affordable and affordable innovations in these areas will free up the limited resources of small business teams and direct them to work on areas that are vital for their long-term success, such as improving products and services, developing customer-vendor relationships, research, and others. One of the ways in which organizations can reduce costs and improve financial management is the automation of work with receivables and payables.

Fintech startups like YayPay , Corcentric, and other liquidity management automation carry significant advantages for small businesses, such as reducing costs for the whole cycle from purchase to payment, efficient data export to billing and document management systems, and manual error correction. input, the advantage of early repayment of debt, improved response to requests from vendors about the status of invoices for payment, improved cash management, balancing workloads and races oznanie bottlenecks, as well as much more. More importantly for business owners, 41% of users of such systems report that their payback is nine months or less. And among those who use such solutions for at least 18 months, the return to payback occurs already in 82% of cases.

Representatives of the Institute of Finance and Management ( IOFM ) emphasize that the achievement of a high level of automation of accounts payable allows businesses to reduce the average price of processing invoices for payment to 7.03 dollars , whereas for businesses they do not use automation at all or almost 9.62 dollars.

Moreover, automation reduces the cost of processing travel expense reports. According to the IOFM study, businesses with a high level of automation report that the average cost of processing a single report is $ 6.86, while for businesses with little automation, this figure reaches as much as $ 12.19.

The combination of automation with best practices allows you to achieve even greater savings, experts say: the most advanced organizations in this regard pay an average of 3.34 dollars for processing one invoice for payment from the moment it is received until approval.

“No matter how comical this may sound, small business owners remain the main users of checks and still use Excel to manage cash flows, which causes them a lot of inconvenience and leads to reduced efficiency, especially when it comes to the need to provide collateral for the loan. For this reason, over the next few years, automation will become a key phenomenon and everyone will strive to reduce obstacles to obtaining money and increase the transparency of the relevant processes, ”says Janet Zablok, the former Head of Visa's international small business unit, now a member of the independent Nav Council. , Inc.



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