How SMBs Can Overcome FinTech Overload To Achieve Optimization

With the digitization process in full swing for many small and medium-sized businesses (SMBs), entrepreneurs are tasked with difficult decisions ahead about which technologies are best suited for their firms.

The modernization journey is filled with friction and roadblocks – and while the growing population of FinTech and software solutions moves in to help SMBs along this digitization path, technology overload can quickly create app fatigue. Though many products are designed to promote automation and productivity, technology build-up in the back office can actually impede efficiency.

Take the bookkeeping and accounting function, for example. Though there are plenty of tools at SMB owners’ fingertips to streamline their financial workflows, a lack of integration and optimization means entrepreneurs may not actually achieve the results they were hoping for. According to Sorin Silivestru, president of Valley Business Centre, business owners facing this challenge are tasked with turning away from doing work that adds value to their companies in order to manually manage their FinTech solutions.

As Silivestru recently told PYMNTS, the ongoing pandemic has exacerbated this issue as more business owners implement technologies to help navigate a remote work environment.

“We’ve seen an increased demand for cloud bookkeeping, just because of the nature of this pandemic,” he said. “With social distancing, it makes a lot of sense to transition to cloud bookkeeping.”

Though migration of key financial functions to the cloud can support professionals working from home, small business owners might be disappointed to discover that the tools they adopt fall short of expectations. Among the biggest hurdles, according to Silivestru, is enabling the growing list of disparate platforms to integrate and connect with each other, which is a key piece of the automation puzzle.

He pointed to processes like accounts payable (AP) and accounts receivable (AR), for instance. Small business owners can implement an automated accounting solution like Xero or QuickBooks, but that tool won’t inherently automate AR or AP operations. Likewise, while a business owner can integrate a separate FinTech tool for AR and AP workflows, those solutions won’t necessarily connect with each other, which could hamper a business’ ability to gain transparency into cash inflows and outflows, maximize revenues and streamline workflows.

Further, small businesses may not be using these FinTech solutions to their full potential, leaving key features unused without an understanding of how these tools could not only migrate processes to the cloud, but actually improve and automate those processes.

Small business owners “don’t take advantage of how these software solutions integrate with each other,” said Silivestru. “And if they don’t take advantage of integration, they cannot achieve the efficiency they’re supposed to.”

The result, he added, is that business owners attempt to go it alone and to facilitate integrations themselves. Ultimately, this takes the business owner’s focus away from more important aspects of running their operations. “They try to do it themselves,” he said. “It’s understandable, but they’re not in the profession of bookkeeping.”

Valley Business Centre positions itself as a service provider to guide small businesses in their digitization efforts by optimizing the accounting, bookkeeping and other FinTech solutions that are already in place. That could mean enabling those cross-platform integrations, or expanding the use of solutions by deploying certain features that had gone unused.

Key to the successful deployment of back-office technologies is a holistic view of the entire enterprise, according to Silivestru. When a small business can implement an inventory management platform that connects with their accounting ledger, identify a project management solution that meets the unique needs of their industry, or expand the use of AR technology to automate collections and reduce payment delays, that’s when an entrepreneur can optimize financials and focus on what matters most: growing their business.

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