As businesses chart their way through the choppy waters of 2020, finance teams play a crucial role. With cash flows interrupted, they’re finding efficiencies and profitable business lines to double down upon. As arbiters of an increasing share of commercial activity, fintech companies building payment processing software have a unique perspective on how businesses are dealing with the new conditions imposed by COVID-19 — and they’re ready to share with the wider finance community.
We checked in with four payment processing fintech companies about how they and their customers have adapted to the pandemic, and what they’ve learned from the experience.
Don’t Let Zoom Stop You From Fundraising
If startups are still raising funding during the pandemic, so can you. In a pair of recent blog posts, equity startup Carta noted that remote pitching allows founders and executives “to chat with VCs you wouldn’t ordinarily meet in person.” Just make sure you have a reliable internet connection.
The key is to keep things concise — focusing on why your idea deserves their attention, what your needs are and how you would use their money — and tailor your pitch to your specific audience. The company also pointed out that while investors will be particularly risk-averse for the foreseeable future (favoring certain categories over others, and experience over fresh faces), founders from diverse backgrounds can expect more doors to open than before.
Palo Alto-based Carta helps public and private companies manage cap tables, valuations, equity plans and investments, amassing more than $600 million in funding since it was founded in 2012.
“The current economic climate increases the chance of your business having to raise a down round — a term that describes raising money at a valuation that’s less than your previous round,” the company wrote. “Although a down round typically casts doubt on the stability of your business, the broader economic slowdown ameliorates how much a down round should impact investor trust.”
Be Prepared To Pivot
For businesses that rely on in-person interaction and regular commercial activity, the pandemic has been a true kick in the guts. As a fintech infrastructure company that helps payment processing platforms do more for merchants through payments and financial services, Finix has seen a number of its clients pivot during the pandemic. Among those the company recounted in a recent blog post: a member experiences platform that began providing technical support to help customers offer video-based classes and services, a payments service that extended its reach through industry partnerships, and a small business lending platform that reoriented itself toward helping customers access federal loans.
Led by co-founder and CEO Richie Serna (pictured above), Finix’s infrastructure helps smooth the process of bringing payments in-house for SaaS businesses, independent software vendors and online marketplaces. The company sets itself apart from competitors by charging a regular software fee, rather than skimming a percentage off each transaction.
“We operate as a hidden layer of technology that helps our customers do more for their merchants via payments and financial services,” the company wrote. “We’re proud of the many ways Finix customers have rallied their organizations together to develop helpful solutions and programs to support businesses and consumers amidst [the] coronavirus.”
Finance Teams Aren’t Just Accountants Anymore
As robotic process automation and other technologies take mundane tasks off white-collar workers’ plates, finance teams find themselves with more time than ever for long term thinking and strategic planning. According to a recent survey of CFOs by San Mateo-based company Tipalti, 17 percent of finance leaders have already moved their team members away from repetitive tasks traditionally associated with corporate accounting and into more strategic roles.
Tipalti says one of the most time-consuming tasks in finance is the accounts payable process. By automating this process, the company says it also reduces organizational exposure to potential fraud, tax, regulatory and audit penalties, and frees up time for finance professionals to pivot to strategic forecasting and decision-making.
“The role of the CFO is changing,” the company wrote in a recent blog post.
“With a unique, holistic view of the business, the modern CFO is breaking the traditional boundaries of their finance-based role to develop insight-driven strategies for growth. By identifying opportunities and providing strategic foresight, the CFO empowers CEOs to make data-backed decisions for the company at large.”
Indeed, it found that 81 percent of CFOs see the identification and targeting of new areas of value as one of their primary responsibilities, and 77 percent believe their job description includes driving business-wide operational transformation.
Know What The Competition Is Up To
As you go about automating mundane finance processes, eyeing potential pivot opportunities and pitching investors, it’s also helpful to know what everyone else is up to. Bill.com recently surveyed more than 300 CFOs and other senior finance executives to learn what was at the top of their minds during the current economic upheaval and tentative recovery. Among the key findings, Bill.com learned that the majority of finance executives are mostly concerned with (no surprise here) cash flow management, along with accurate forecasting near the top of the list. Meanwhile, more than half of surveyed leaders also said their accounts payable and receivable processes are on their way to near-total automation, thanks to newly available software.
Bill.com offers a payment management platform for small and mid-sized businesses, helping to streamline, automate and control more than $70 billion worth of payments each year.
“The CEOs, CFOs and other senior finance executives we surveyed understand that investment in financial technology solutions would have a positive impact on how their departments function,” the company wrote in a blog post, “enabling remote workers to be more agile, while also improving cash flow, forecast accuracy and risk management.”
