The future is finance, are finance teams being placed front and centre? Being the foundation of a company, stunted internal operations regarding finance can limit the capabilities of the company as a whole; especially so if said company is entering its enterprise phase.
This age-old dilemma at the heart of modern business is something that Erez Agmon discusses at length throughout this guest post for The Fintech Times.
As Director of Business Development, Agmon is a key member of the PayEm team. He’s passionate about startups, people, helping businesses improve processes and embracing technology. Agmon has a demonstrated background in the Venture-Capital world, investing in SaaS and tech startups, and today scales sales at PayEm. He holds an L.L.B in Law and a B.A in Finance from Reichmang University (IDC Herzliya).
PayEm’s global spend and procurement platform brings control, transparency and automation to finance teams. The technology captures requests, invoices, creates bills, schedules and sends payments to anywhere in the world, in any currency, auto-categorises and syncs with an enterprise resource planner (ERP); PayEm automates tedious tasks, reduces frictions and frustration, giving finance teams precious time to focus on the big picture while giving them real-time visibility by department, team, employee, subsidiary, or vendor in reporting and automation.
PayEm was founded in 2019 and is headquartered in Tel Aviv, Israel. The company has raised $27million to date from investors such as Glilot Capital, Pitango First, NFX, Local Globe, FreshFund, and prominent fintech angels.
Here Agmon explains why fintech is the key to projecting finance teams and their organisations into hyper-growth, whilst identifying the motivations of companies currently in such a phase:
As early-stage companies mature into the enterprise phase, it’s common to experience growing pains, especially in their finance teams. As hiring needs grow across all departments, it can be challenging for financial processes to scale proportionately, primarily when performed manually. These manual processes might have worked when companies were smaller. However, when faced with an inevitable increase in the volume of employee- and employer-level invoices and transactions, it can become challenging for finance teams to maintain control and organisation.
Procurement, especially amid such rapid growth is another pain point where finance teams can rapidly encounter challenges. The transition to enterprise-level often translates to a significant influx in procurement needs, which finance teams – even those well prepared – may struggle with. This growing pain is often a powerful motivator in adopting innovative solutions.
Luckily, there are automated solutions to help with spending regarding payment methods, including automated clearing house (ACH), wire, and cards, along with other financial processes, like accounts payable (AP) and employee requests. The challenge of balancing so many solutions leads companies to look for all-in-one solutions, which result in companies enjoying improved visibility and control over their finances.
When companies embrace fintech, their finance teams can connect with the rest of their companies in ways they weren’t able to previously. Companies experiencing hyper-growth recognise how imperative it is to improve finance-related functions in conjunction with other departments, as they grow at similar rates. If the finance team gets left behind, that may stunt the company’s growth.
Finance teams at hyper-growth companies often contain just a tiny handful of employees, who in turn are responsible for the fiscal health of much larger organisations. When they lack the proper solutions, it can be easy to lose pace and disconnect from the rest of the company. This risk is especially relevant for subsidiary management insofar as it’s critical to identify solutions that enable the smooth scalability of an organisation while also enabling finance teams to operate in lock-step with their departmental counterparts.
The need for finance teams to connect with their companies’ other departments comes down to transparency – in terms of processes, challenges, and departmental spend insights. When employees and other stakeholders better understand their finance team, its perception shifts from that of a resolute gatekeeper to that of an equal part of the team. As a result, the company’s health becomes a universal responsibility, as opposed to being placed squarely on the shoulders of finance.
Hyper-growth company tech stack has evolved in recent years. Before the fintech era, tech stacks for finance teams were limited to manual bank functions and ERP software. Now, said fintech solutions can take advantage of those systems while using platforms that offer a greater degree of flexibility and an improved suite of employee-centric functions.
As a result, mid-market companies, especially, can grow, thanks to smart solutions concerning procurement, corporate cards, AP automation, employee requests, and approval flows. The natural evolution of this expanded industry lies in the all-in-one platform. Such solutions have led companies to realise fintech software implementation has become smoother and less complex than ever before.
For a long time, finance teams’ tech stacks lagged, which was ironic since they approved modernising tools for other departments. For instance, Marketing, R&D, and Sales have had modern solutions for ages. Luckily, finance is beginning to catch up. Moreover, this evolution finally began to take root when it became cheaper and easier to develop solutions for finance teams. Obviously, it doesn’t hurt that the demand was there.
Though it was initially fragmented based on use case (AP vs. corporate cards, for example), the finance team tech stack is presently characterised by the shift from manual to automatic processes, emphasising all-in-one platforms. This unified approach has led to better, more stable products, complete with API integrations and improved UI/UX.
Smart Solutions Concerning Procurement
It’s no small task – the simplification of procurement, and by extension, purchasing. In the B2C realm, there are, quite literally, an endless number of solutions that let people buy things easily and instantaneously.
With B2B, it’s much more complicated, given the number of stakeholders, policies, and workflows involved. In fact, many don’t even know where to begin when needing to submit a request or purchase order. Questions like, ‘has the vendor been approved?’ or ‘who needs to sign off on this form?’ are not necessarily intuitive.
The point is that procurement is in dire need of innovation. That’s why platforms that sprung up to fill that niche have been so successful, particularly those that have produced all-in-one solutions that connect different financial aspects in a single place – from vendor management to custom approval flows, and beyond.
Organisations are moving towards a connected-finance standard – a singularity of sorts by way of all-in-one platforms. In my mind, this means fintech’s selling points going forward boil down to three points: interconnectivity, flexibility, and visibility.
- Interconnectivity, since it connects employees with their companies’ financial operations and connects finance teams to modern, data-driven solutions. In practice, this has resulted in the connection of the payment and the request in a single platform.
- Flexibility, since fintech’s automation and reconciliation tools enable time savings on the part of Finance teams. In turn, it means they can spend more time planning, budgeting, and iterating on their existing processes.
- Visibility, since, across the board, finance teams, executives, and employees can gain an unparalleled level of insight into the operation and health of the company they seek to maintain. In practice, this has enabled employee visibility into purchase order status, along with approval flows.
Those three themes summarise the motivation of companies experiencing hypergrowth. In turn, this is why they’re attracted to spend management and the prospect of connected finance via all-in-one platforms, which represent the future of fintech. Ultimately, the modernisation of payments, cards, automation, and AP isn’t just ‘nice to have’ but instead has a real impact on companies’ overall return on investment (ROI).
As fintech solutions are increasingly adopted, we’ll see finance teams take their place at the forefront of their companies, with solutions implemented to reflect that fact. After all, the future is finance.
