B2B Payments

Beyond Auto-Pilot For Recurring SME Expenses

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Automating the accounts payable process has become a paramount priority for businesses looking to achieve top-tier performance levels. Integrating automated solutions is often talked about in terms of managing suppliers, gaining visibility into major expenses and deepening the understanding of where corporate cash ends up.

But there are other categories of spend that can benefit from automation. Seemingly trivial expenses that happen on a recurring basis — rent, subscriptions, web hosting and the like — can lead to time wasted in the AP department when done manually every month.

There's more to automating recurring payments for an SME than just putting bill pay on auto-pilot, however, according to Avaza Cofounder Tim Kremer. The Australian business management software firm recently released a solution to automate recurring expenses for SMEs, a tool the firm said looked to relieve the AP department of "mundane and time-consuming tasks," allowing them to focus on the "real work," Kremer said in a statement.

The executive recently told PYMNTS that setting up automatic bill payments for subscriptions and other types of recurring payments doesn't necessarily provide the same level of relief.

"I think the biggest challenge with recurring payments is managing them," he said. "Often, businesses start offering regular payments, whether for subscriptions or retainers, and don't realize the administrative overhead."

Only facilitating automatic payments in this spend category falls far short of providing spend visibility and management for the enterprise, the executive added.

"By using a good automated recurring invoicing product, you can see the whole history of invoices and payments against the subscription, and description text within the invoice can be automatically updated to reflect the respective billing period," he explained.

Implementing a more robust automatic expense management solution not only takes away the monotony of paying the same bill on a recurring basis but still lands spend control capabilities in the hands of AP professionals.

"We think it's really important to have complete visibility and control of any automated invoices and expenses being generated," Kremer noted.

Of course, the name of the game for bill payment automation, he said, is still to save time. "Finding new ways to save time is so important," Kremer added. "I feel with smaller and yet competitive markets, entrepreneurs in Australia are always on the lookout for anything that can give them more time and improve their competitive edge."

But the Avaza cofounder also pointed to other benefits of an automated solution, like the ability to manage these payments through a mobile device (he pointed to one client that enjoys the ability to track expenses and generate invoices while in a taxi or a meeting, for instance), as well as the capability for the service to support multiple currencies for purchases from an international seller or vendor.

It's not necessarily easy for an enterprise to hand off its recurring payment procedures to an automated software solution, however. Kremer said that many of Avaza's SME users prefer to first simply automate the drafting of their automatic payments before any money is allowed to move and gradually adopt a fully automated tool later on.

One reason for this could be the anxieties that emerge when an enterprise stops micro-managing a recurring payment.

Kremer said he is witnessing a rise in SMEs prioritizing payments security, which could cause businesses to need some time before they're comfortable with fully automating an expense.

"Ten years ago, I recall businesses regularly refer to security as a 'cost center' and something they preferred to ignore," he explained. "Now that there are a lot more publicized security threats, it's increasingly important to take it seriously."

For SMEs, however, Kremer said the biggest priority when implementing any new tool is more straightforward: making sure it works the way it should.

"Software should be so easy to use that it takes minimal or no training for users to pick up," he said "As software designers make more and more powerful software available to small businesses, the great design challenge is to keep it clean and simple."

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NEW PYMNTS STUDY: ACCELERATING THE REAL-TIME PAYMENTS DEMAND CURVE – NOVEMBER 2020

About: Accelerating The Real-Time Payments Demand Curve:What Banks Need To Know About What Consumers Want And Need, PYMNTS  examines consumers’ understanding of real-time payments and the methods they use for different types of payments. The report explores consumers’ interest in real-time payments and their willingness to switch to financial institutions that offer such capabilities.

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