The title of this piece appearing in The Edge Markets suggests that a wave of innovation is coming to the B2B shore, and as one reads along, one finds that the posting is more directly related to the SME space. In this case it is an exec from one of the ERP and financial software vendors in the Asia Pacific market who thinks SMEs should be getting on board. The posting is mostly advocating for the use of available (and growing) technology that supports small business cash flow through access to liquidity and easier accounting.
Another way to increase productivity is through the utilisation of a company’s assets, he adds. “For a small business, cash is king. It is important to make sure it has full visibility of all of its liabilities and obligations and make sure it is making payments and receiving them on time. Basically, working cash is very important.”…..Agiasotis says fintech is influencing this by removing the middlemen and overheads from business-to-business (B2B) financial transactions. “I think that is where you are going to see the first wave. And this is where the crossover comes into the application software companies.”
We have been following the alternative financing space for some time, and do not disagree that this type of tech is good for small business. We would characterize the ocean metaphor more as a rising tide of fintech, with a body surfing wave that already broke shore a couple of years back, followed now perhaps by a new wave of business owner recognition as to available solutions. The use of alternative finance tech will spread with the further adoption of e-invoicing, the natural catalyst for automated payables workflow and portal into the ‘alternative anything’ paradigm. But how they get there can vary, including carrot, stick, or self-motivation.
“There will be people who already have a technology strategy or have already made the investments to have part of their organisations open to working this way. If you think about the traditional supply chain, big businesses depend upon small businesses and vice versa. So, when a big business says, ‘This is how I want to do business’ or ‘This is how I want to make payments’, it will force small businesses to follow suit,” says Agiasotis.
The author then moves the topics of discussion more into general B2B, with AI and IoT as perhaps the real wave on the near horizon.
Overview by Steve Murphy, Director, Commercial and Enterprise Payments Advisory Service at Mercator Advisory Group