No business wants to get paid slower. No one wants to park their financial operations with a larger company. And no one wants to pay more fees for banking and financial products.
Yet, that’s the situation many small- to medium-sized businesses (SMBs) find themselves in. Their business ecosystem is often limited to what they know and what they think they can afford to expand. PYMNTS Intelligence found that only 5% of larger SMBs have digitized their payment processes, despite recognizing the value of doing so.
BILL, which processes over 1% of U.S. GDP on behalf of small businesses, has made expanding this ecosystem part of its basic mission. Digitizing and expanding the SMB ecosystem represents a greenfield opportunity for FinTech companies to improve how they manage their financial operations, Mary Kay Bowman, executive vice president of payments and financial services at BILL, told Karen Webster.
“We like to talk about our financial operations as a platform,” she said. “And it’s not just the software, it’s also the services that surround it. And if you have that platform, it can be utilized across all of their trusted partners. When I think about bringing a level of customer empathy to this continuing effort to bring optimal technology and services and financial services to small businesses, it really comes back to saying, if not, if we don’t make it better for them, they would have to do this themselves.”
Part of Bowman and BILL’s challenge lies in the diverse nature of the small business sector. With approximately 33 million small businesses in the U.S., there’s no one-size-fits-all solution. Not all small businesses are the same, and it’s a mistake to see them as a single segment with differences evident on firmographic and psychographic levels, she said.
BILL’s approach centers on providing software that can digitize various financial documents, from invoices and quotes to contracts and purchase orders. This digital-first strategy aims to make the transition from paper-based processes more attractive and efficient for SMBs.
“We are looking at the software side of how we make those things that were paper, digital,” Bowman said. “And then, how do we connect the payment or the money movement to the most digitally optimized and preferred payment method as well.”
A key aspect of BILL’s approach is the integration of software and payment processing. By combining these elements, the company aims to streamline the transition from paper-based systems to digital processes. This integration allows for more optimized and preferred payment methods, enhancing cash flow management for SMBs. The platform also facilitates better visibility and transparency between SMBs and their accountants.
“Accountants are some of the most trusted partners of small businesses, but they don’t live in the small business every day,” Bowman said. “So, we can provide a great amount of visibility, a great amount of transparency and a great amount of speed between the accounting partner and the SMB.”
As the financial operations platform for SMBs evolves, BILL is focusing on simplifying processes while maintaining strict regulatory compliance.
“We’re regulated in all 50 states,” Bowman said. “And that’s one of the reasons that the SMBs can really trust us. And that extends to not only the SMBs themselves, but also their trading partners, the banks that they work with and their accountants.”
Considering that many SMB receivables are tied to ad hoc payments, which are unpredictable and non-recurring, paper-based payments can create friction as SMBs seek to turn those receivables into cash. The SMB owners may be busy, juggling multiple roles at once, and indeed they’re renowned for being scrappy entrepreneurs, she said.
Technology as a tool, geared toward helping them run their businesses more adroitly, may be a shift — and BILL’s roadmap is to help turn paper into what Bowman called “digital assets.”
The issue is a multi-threaded one, she said, adding that SMBs have some (but not extensive) influence in getting larger buyers to move away from checks. The availability of platforms such as BILL’s to “take in” analog payments on one side of the transaction and digitize them for the benefit of the SMB helps smooth cash flows.
“We’re moving from one standard to another, from paper to digital,” she said.
Beyond simply modernizing accounts payable and accounts departments, however, “there is all this stuff in the middle that did not start digitally or somehow became paper-based or manual along the way,” she said. “…We’re ironing out the bumps in the transition process, leading companies into a digitized future that is efficient and lower cost, with higher cash flows.”
The platform model also helps forge B2B ecosystems, as the firm has partnerships with the SMBs’ accounting and banking partners, Bowman said.
“We’ve built our systems ‘together’ with those players in mind, instead of trying to fit them together after the fact,” she said.
The interconnectedness alleviates the technical lift of the SMB converting its systems to what the accountants and banks want to “see” from those small business clients, she said.
“We’re able to provide some of that backbone with our software and payment services,” Bowman said.
Forging that interconnectedness for SMBs is a natural fit for Bowman, widely known as an innovator in the payments industry, having worked on payment and platform strategies at Amazon, Visa and Square, to name just a few of the heavy hitters in technology and digital transformations.
Looking ahead, BILL’s mission is clear, Bowman said. The company brings “the benefits of next-generation and future-generation payment and financial services from intelligence to technology to small businesses so that they can thrive.”
By addressing common pain points such as slow payments, high fees and complex management processes, BILL aims to transform the SMB financial landscape, allowing SMBs to focus on growth and innovation rather than administrative tasks, she said.
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