How Early-Enterprise Finance Teams Evolve With Fintech Solutions

How can young companies grow when presented with smart financial solutions?

That question lies at heart of so many conversations in the B2B Fintech field. To articulate the answer, we sat down with PayEm’s Director of Business Development. Given his passion for SaaS, startups, and innovation while communicating with potential new clients - he was no doubt the right guy to pick.

Here, we pick his brain and share his insight. *

In your experience, what challenges have you seen early-enterprise finance teams face that they didn't at earlier stages?

As early-stage companies mature into the enterprise phase, it's common to experience growing pains, especially for their finance teams. As hiring needs grow across all departments, it can be challenging for financial processes to scale proportionately, primarily when performed manually. These manual processes might have worked when companies were smaller. However, when faced with an inevitable increase in the volume of employee- and employer-level invoices and transactions, it can become challenging for finance teams to maintain control and organization.

Procurement, especially amid such rapid growth is another pain point where finance teams can rapidly encounter challenges. The transition to enterprise-level often translates to a significant influx in procurement needs, which finance teams - even those well prepared - may struggle with. This growing pain is often a powerful motivator in adopting innovative solutions.

Luckily, there are automated solutions to help with spending regarding payment methods, including ACH, wire, and cards, along with other financial processes, like AP and employee requests. The challenge of balancing so many solutions leads companies to look for all-in-one solutions, which result in companies enjoying improved visibility and control over their finances

When companies embrace Fintech, their finance teams can connect with the rest of their companies in ways they weren't able to previously. What do you think motivates companies to make such a change?

I can speak mainly in regards to companies experiencing hyper-growth. Those companies recognize how imperative it is to improve finance-related functions in conjunction with other departments, as they grow at similar rates. If the finance team gets left behind, that may stunt the company's growth.

Finance teams at hyper-growth companies often contain just a tiny handful of employees, who in turn are responsible for the fiscal health of much larger organizations. When they lack the proper solutions, it can be easy to lose pace and disconnect from the rest of the company. This risk is especially relevant for subsidiary management insofar as it’s critical to identify solutions that enable the smooth scalability of an organization while also enabling finance teams to operate in lock-step with their departmental counterparts.

The need for finance teams to connect with their companies' other departments comes down to transparency - in terms of processes, challenges, and departmental spend insights. When employees and other stakeholders better understand their finance team, its perception shifts from that of a resolute gatekeeper to that of an equal part of the team. As a result, the company's health becomes a universal responsibility, as opposed to being placed squarely on the shoulders of finance.

It's no secret that the hyper-growth company tech stack has evolved in recent years. Have you witnessed this transformation first-hand?

Before the Fintech era, tech stacks for finance teams were limited to manual bank functions and ERP software. Now, said Fintech solutions can take advantage of those systems while using platforms that offer a greater degree of flexibility and an improved suite of employee-centric functions.

As a result, mid-market companies, especially, can grow, thanks to smart solutions concerning Procurement, corporate cards, AP automation, employee requests, and approval flows. The natural evolution of this expanded industry lies in the all-in-one platform. Such solutions have led companies to realize Fintech software implementation has become smoother and less complex than ever before.

“...Fintech software implementation has become smoother and less complex than ever before”

Speaking of tech stacks, do you have a sense of whether they differ between departments? Meaning, for example, does a finance team's tech stack compare to sales or marketing?

For a long time, finance teams' tech stacks lagged, which was ironic since they approved modernizing tools for other departments. For instance, Marketing, R&D, and Sales have had modern solutions for ages. Luckily, finance is beginning to catch up. Moreover, This evolution finally began to take root when it became cheaper and easier to develop solutions for finance teams. Obviously, it doesn't hurt that the demand was there.

Though it was initially fragmented based on use case (AP vs. corporate cards, for example), the finance team tech stack is presently characterized by the shift from manual to automatic processes, emphasizing in all-in-one platforms. This unified approach has led to better, more stable products, complete with API integrations and improved UI/UX.

Earlier, you referenced smart solutions concerning procurement. Can you elaborate on the need for a tech-led solution in that area?

It’s no small task - the simplification of procurement, and by extension, purchasing. In the B2C realm, there are, quite literally, an endless number of solutions that let people buy things easily and instantaneously.

With B2B, it’s much more complicated, given the number of stakeholders, policies, and workflows involved. In fact, many don’t even know where to begin when needing to submit a request or purchase order. Questions like, “has the vendor been approved?” or “Who needs to sign off on this form?” are not necessarily intuitive.

The point is that procurement is in dire need of innovation. That’s why platforms that sprung up to fill that niche have been so successful, particularly those that have produced all-in-one solutions that connect different financial aspects in a single place - from vendor management to custom approval flows, and beyond.

You've been engaging with growing organizations for a while now. What do you think are the industry's strongest selling propositions?

I think organizations are moving towards a connected-finance standard - a singularity of sorts by way of all-in-one platforms. In my mind, this means Fintech’s selling points going forward boil down to three points: interconnectivity, flexibility, and visibility.

• Interconnectivity, since it connects employees with their companies' financial operations and connects finance teams to modern, data-driven solutions. In practice, this has resulted in the connection of the payment and the request in a single platform.
• Flexibility, since Fintech's automation and reconciliation tools enable time savings on the part of Finance teams. In turn, it means they can spend more time planning, budgeting, and iterating on their existing processes.
• Visibility, since, across the board, finance teams, executives, and employees can gain an unparalleled level of insight into the operation and health of the company they seek to maintain. In practice, this has enabled employee visibility into purchase order status, along with approval flows.

Those three themes precisely summarize the motivation of companies I speak with every day, especially those experiencing hypergrowth. In turn, this is why they're attracted to spend management and the prospect of connected finance via all-in-one platforms, which represent the future of Fintech. Ultimately, modernization of payments, cards, automation, and AP isn't just "nice to have" but instead has a real impact on companies' overall ROI. As Fintech solutions are increasingly adopted, I think we'll see finance teams take their place at the forefront of their companies, with solutions implemented to reflect that fact. After all, the future is finance

*This interview was initially published by The Fintech Times in February 2022

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