NEW REPORT: SMBs Balance Buyer and Supplier Needs With Payments Platforms

Small- to medium-sized businesses (SMBs) face numerous obstacles to sustainable business growth, not the least of which is managing payments. For many growing buyers and suppliers, the timing of payments — when they are sent and when they are received — is key to long-term business planning and, ultimately, a successful growth strategy. Yet there is a mismatch between how buyers and suppliers want to be paid: those sending payments tend to want more time to pay, while those receiving payments want them to process as soon as possible.

In The AP/AR Quick-Start Guide: How Platforms Can Optimize Customer Experience Through Payments Modernization, a PYMNTS and Plastiq collaboration, we explore the potential role of platforms in the acceleration of SMB business growth.

SMBs want a powerful, all-in-one payments solution.

They are ready for better payments experiences and see payments optimization as important to their long-term growth. The resource expenditure involved in manual accounts payable (AP) and accounts receivable (AR) efforts and transaction costs rank side by side as SMB payors’ most mentioned business-to-business (B2B) payment concerns. PYMNTS research revealed that a majority of SMBs would be willing to pay to use an all-in-one payment solution if the fee was offset by time saved, loyalty rewards or tax deductions as a business expense.

This provides an opportunity for platforms that serve SMBs and can provide them with access to the technology that they need to streamline payments for their own clients. Offering clients new payments management options and increased payments choices will not only help improve the customer experience, but it will also help them scale their businesses sustainably. Creating these options can be a challenge, however, even for large organizations with sophisticated technology.

Platforms can offer SMB customers a “plug-and-play” solution that allows the SMBs’ clients to enjoy greater flexibility in payments without losing efficiency in payments processing — even when they do not have their own tech stack with these capabilities.

Platforms can accelerate digital transformation for SMBs struggling with legacy technology.

Per the report, one major hurdle experienced by SMBs is the time-consuming nature of AP/AR management. Manually processing transactions not only compounds the resource-intensive nature of business growth for SMBs, it limits their ability to develop innovative payment solutions in response to changing marketplace conditions. Automation, via a platform, is one solution that some SMBs have turned to.

Automation saves time and improves clients’ visibility over transactions, allowing them to create accurate projections of cash flow and reconcile AP/AR accounts easily. Manual account management can be time-consuming and fraught with human error, leading to errors in day-to-day data reporting and even regulatory compliance auditing.

In addition, automation may help SMBs improve user experiences and future-proof their long-term business goals. All-in-one or “one-card” payment solutions represent a sea change in how SMBs do business globally. As payment methods and eCommerce models evolve, businesses may struggle to keep up with client and customer demand for frictionless payment experiences.

Platforms may turn to a tech solution of their own to deliver the experiences that their SMB clients need.

Due to the complexity of payments innovation and its importance to SMBs, platforms may also struggle with creating the right mix of technology integrations and services for their SMB clients’ changing requirements. With access to a single payment solution that offers customizable payments, however, platforms can offer SMBs a buy now, pay later (BNPL) solution that works for both sides of the transaction.

Creating a customized solution for each client may stretch the resources of even the most technically sophisticated platforms. For some platforms, delivering on consumer experience at scale may require help. This may mean leveraging a third-party technology solution to ensure that payments processing, AP/AR integration and transaction monitoring processes perform consistently.

To learn more about how platforms are supporting better payments experiences for SMBs, download the report.