B2B Payments

Zoho Takes Aim At Fragmented Back-Offices

SMBs essentially have the world at their fingertips. In recent years, novel opportunities for growth, new business models and sales channels have sprung up with a newfound digital vigor.

To handle the current requirements of maintaining a business, online productivity tool and SaaS provider Zoho has found that SMBs are by and large willingly and rapidly adopting cloud-based web and mobile applications to enable them to effectively run their organizations.

But many eventually run into a barrier when it comes time to create a comprehensive picture of operations.

“What SMBs are now waking up to,” said Zoho President Raj Sabhlok, “is the fact that they’ve adopted all of these applications to solve various business problems. But now they need to integrate the data from these applications. And that’s a tall task.”

Not surprisingly, businesses can become overwhelmed by the complexity of operating and managing a large volume of disintegrated applications. Given the proliferation of channels and models of selling available to SMBs today, along with an increasingly digital workforce, integration between finance and other back-office applications is key to providing a holistic view of operations.

To address the widespread fragmentation across back-office operations, Zoho just recently announced Finance Plus, a fully integrated suite of five cloud-based financial and accounting applications: Books, Invoicing, Expense, Inventory and Subscription. Along with enabling the fundamental financial tasks it takes to keep a business running, the suite addresses some of the following problems that exacerbate back-office fragmentation.

“Many businesses today are leveraging Amazon to sell, or eBay, Etsy. And they’re using shopping carts like Shopify,” said Sabhlok, noting that in many cases, these operations run outside of the reach of their existing finance and accounting applications. But it’s not just the finances. Inventory tracking across multiple warehouses and distributors can get messy in a hurry.

Likewise, the workforce at large is increasingly mobile. Not just in terms of business trips, but in how they rack up business expenses. The traditional expense-reporting process, typically on spreadsheets or email, noted Sabhlok, can’t always account for the growing variety of payment methods out there, let alone the variety of ways receipts are delivered — in-app, via email, paper or none at all.

But there are larger changes in commerce that lead to fragmentation. Namely, the recent rise of subscription-based models.

“Many businesses have moved or are moving to subscription economy. It really upends traditional accounting processes and metrics,” Sabhlok said, noting one fundamental difference: While much of accounting looks at historical data, the subscription commerce model requires attention to future projections.

While businesses might be looking to adapt to growing consumer interest in the subscription space, traditional accounting applications can’t account for the change in focus. Since subscription commerce is forward-focused, businesses take in much of the cost up front. Key metrics such as consumer lifetime values or monthly recurring revenue, meanwhile, are left untracked.

“If I’m selling a $10-per-month subscription, but it cost me $100 to get that customer through advertising, selling, what have you,” Sabhlok said, “when I put it into an accounting application, it essentially looks like I’m losing $90.”

While standalone applications address the needs to manage multichannel, mobile and subscription-based operations for SMBs, all of that data sits separately — both from the others as well as from traditional accounting and bookkeeping applications. Moving and matching that data together for an overarching view can become a challenge for businesses. Sometimes, the process can require yet another application to handle, said Sabhlok.

Across its Finance Plus suite of applications, Zoho shares a common database. On top of the intrinsic integration this provides users, Zoho can leverage this database to quickly create new applications.

Currently, Sabhlok said Zoho has four applications planned to launch on the Finance Plus suite this year — including Zoho Checkout and Zoho Payroll — to bring more back-office tasks out into the light.

What all of these integrations add up to is a holistic view of a business’ financial operations and cashflow, a key element for businesses as they expand across channels, adopt new models, payment methods and strategies to keep pace with the changing face of commerce.



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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