B2B Payments

When Too Much Good Tech Can Be A Bad Thing For SMBs

There have never been more tools available to the entrepreneur, and tech adoption among small businesses (SMBs) is on the rise. FinTech innovators are targeting key points of friction for these SMB owners, largely deploying the cloud for solutions that span the gamut, from front office to back.

These technologies are varied, but they all have one goal in mind: to boost efficiency for entrepreneurs.

But as technology adoption increases, these technologies can have an adverse effect: Too many solutions leads to siloed platforms that fail to communicate with each other and actually create more work for business owners and managers. According to Jason Richelson, CEO and founder of StaffKeep, this phenomenon becomes glaringly apparent whenever a new employee comes on board.

“It’s still a manual process,” Richelson said of the challenge of employee onboarding to an array of tools, from payroll platforms to Gmail to timekeeping and online messaging solutions. “Every company I talk to will say there is a Word document or Google spreadsheet for each employee.”

There are so many solutions, he added, and no real standardization for how to link new employees to all the cloud-based solutions SMBs have adopted.

If Jason Richelson’s name seems familiar, it may be due to one of his other companies, point-of-sale (POS) tech provider ShopKeep, which he founded nearly a decade ago. There (and in his other endeavors, such as his current wine business Simply Wine), Richelson said he experienced this friction firsthand, but lacked access to a solution built for small companies.

“There are a few different ways large corporations handle it,” he said. “There are tools that offer a single sign-on — you go through a portal to access all of your web apps. That’s fine, but it’s complicated, expensive and difficult to implement. If you’re a big organization, you’ll use it, but small businesses can’t afford it and can’t handle the implementation.”

StaffKeep, which launched last year, uses APIs to take information submitted by employees — including Social Security numbers, addresses and bank account information — and then pushes that data into other platforms deployed within the SMB, including payroll, timekeeping and email tools.

Considering the sensitive nature of this employee data, security is paramount to the onboarding process too, the executive explained. Oftentimes, SMBs and their new hires use insecure ways to record and share that information.

“Small businesses will ask [new hires] to email their Social Security numbers and other details to set them up in payroll,” he said. “Or they’ll have a piece of paper. And generally, the more eyes on that data, if it’s on paper or email, it’s not secure.”

Cybersecurity became a topic no business owner could ignore in 2017, though it is typically focused on POS and other consumer-facing systems. But back-end platforms — payroll included — store equally sensitive company and employee data. Research from Bloomberg BNA last year highlighted this trend, noting that the issue of data privacy and security will be a key focus for the payroll technology space.

“Countries are coming out with more stringent regulations around the use of personal data and where it can be located and for what purposes,” explained Kira Rubiano, partner at global payroll service firm Celergo LLC, in an interview with Bloomberg BNA for the report.

Automating onboarding of new employees not only means less reliance on spreadsheets and paper, but also means employee information can be more securely stored.

But there is another side to this point of friction that Richelson said can be just as headache-inducing: employee off-boarding.

He had his own experience in which high employee turnover meant recurring charges for employees that were no longer at the business.

“When I was downsizing at my wine store, I asked, ‘Why am I paying so much for Gmail?’ And I realized I hadn’t turned the service off for employees that left,” the executive said. “For months I was paying for them. These small businesses use cloud-based tools that charge by the user, and very often you forget to turn them off in different tools when they leave, which costs you money and is a security issue.”

It’s another challenge that can arise for SMBs jumping onto the SaaS subscription model. Richelson said making it easier for employers to turn on or off services for employees means fewer subscription charges falling through the cracks, and for small businesses operating with tight margins, recapturing that cash can be critical.

StaffKeep currently integrates with only a handful of cloud-based platforms, but as the company continues to add API connections to more SMB solutions, Richelson said he has his eyes on the cash flow management aspect of employee-facing services too.

“I am a … power user [of new technologies],” he said. “I have a bunch of businesses, and I love trying software. I have so many log-ins and tools; I have to track every charge on my credit card because I maybe forgot to turn that one off when I was testing it. Small businesses are the same. They’re turning on tools, and they don’t necessarily pay attention to how much they’re getting charged. Most people can’t manage all of the connections.”

“Part of what we want to do besides onboarding, eventually, is to help small businesses reconcile and account for how many users they have on different tools,” he continued. “There are a lot of great software tools out there for small businesses, all cloud-based.”

——————————–

LATEST INSIGHTS:

Our data and analytics team has developed a number of creative methodologies and frameworks that measure and benchmark the innovation that’s reshaping the payments and commerce ecosystem. Check out the latest PYMNTS report on healthcare digital identity. 

TRENDING RIGHT NOW

To Top