Technology to keep your accounts shipshape, the startups that are streamlining financial management

Finance departments play a key role in addressing the challenges that companies are facing in these times of coronavirus. To improve how they operate, fintech startups are offering solutions that make it possible to invoice more quickly, obtain cashflow forecasts and optimise the collection of non-payments thanks to technologies like artificial intelligence

“The greatest danger in times of turbulence is not the turbulence; it is to act with yesterday’s logic.”  This statement, articulated by the renowned economist Peter Drucker decades ago, is undoubtedly applicable today. The coronavirus crisis has hit almost every sector, and companies are reinventing themselves to adapt to the shock by trying to remain calm and apply common sense.

One of the main risks they face is lack of liquidity. According to a recent Banco de España study, between 67-69% of non-financial companies will have liquidity needs this year. A drop in turnover is one of the main reasons that makes it hard to meet payments due – 56% of entrepreneurs expect turnover to fall over the coming months, according to a study by KPMG and the CEOE (Spanish Confederation of Employers’ Organisations).

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Finance departments have a critical role to play in mitigating the impact of the pandemic on company accounts. As well as taking advantage of specific financing measures, such as those launched by BBVA, another strategy that they should follow is digitization, which according to the previous report still represents a challenge for 52% of business owners.

Some of the startups that took part in the BBVA Open Innovation acceleration programme offer digital services that can improve the work of those responsible for finances in small businesses.

From spreadsheets to the cloud

Many companies have yet to get onboard with the cloud, as shown by the latest survey on ICT use in companies carried out by the INE (Spanish Statistical Office). 28.1% of companies with more than 10 employees that have internet connectivity source cloud services, a percentage that drops to 10.4% for smaller organisations.

One of the startups that allows companies to make the leap to the cloud to streamline their invoicing process is Billage, which recently participated in the InnovaHome Festival. Its existence shows that necessity is the mother of ingenuity – the founders had not come across a comprehensive business management solution for micro-SMEs in any of the other projects they had been involved in, and decided to develop one.

“The major problem was to put all the pieces together and generate workflows between the different departments”, says Billage’s co-founder and CEO, Antoni Guitart. For this reason, their SaaS (‘Software as a Service’) tool integrates invoicing, project management and CRM (‘Customer Relationship Management’).

Where billing is concerned, the startup Billage’s software represents an evolution of traditional spreadsheets, making it possible to create and send out customised invoices, manage incoming payments and get cashflow predictions “to be able to react early”.

Having the whole life cycle of the billing and payment collection process is really valuable

It also links with financial entities so that users can review the movements of multiple accounts, make transfers and automatically perform bank reconciliation within the tool. “Having the whole life cycle of the billing and payment collection process, right up to cash movements, is really valuable from an efficiency point of view”, explains Guitart. The next steps for this startup, which already has 20,000 users, are specifically aimed at strengthening the fintech side so that companies perceive it as “a complete money management tool”.

Liquidity in the bag

Other tools are focused on a particular financial management process. This is the case with SeeDCash, a mobile app that simplifies the control of liquidity for its 600 users (SMEs, freelancers and startups). “Not all small companies are clear on the fact that liquidity is key until something unexpected happens”, says SeeDCash co-founder and CEO Teresa Núñez, another participant of the InnovaHome Festival.

The app allows you to automatically generate payment and collection forecasts using predictive models. These forecasts are compared against bank movements to monitor liquidity and users can receive personalised alerts if an account is overexposed, in order to take action.

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Not all small companies are clear on the fact that liquidity is key

Núñez explains that being able to envisage cashflow in the short, medium and long term “gives the company credibility in the eyes of financial institutions”, which can help them access financing. She also recommends that, using tools like theirs, companies review their cash plan weekly in this period and float different scenarios, including the most pessimistic, to anticipate potential bumps in the road.

As the CEO of SeeDCash summarises: “It’s moving towards a service market in which all of us have a part to play in getting everything a company needs at the financial management level”. Other startups in the BBVA ecosystem also support financial departments, such as Signaturit, which offers electronic signature solutions for contracts, invoices and quotations.

Artificial intelligence and finance

When it comes to invoices, one aspect that all companies worry about is getting them paid on time – 58% of companies in Spain have experienced delays in receiving payments due to coronavirus, according to a study by Informa D&B. Invisible Collector focuses on this area. Its SaaS uses artificial intelligence to optimise the collection of non-payments for 130 large European companies.

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Their algorithm analyses the debtor profile to determine the best automated communication strategy (email, text message or phone call via a voice chatbot). Afterwards, the debtor can renegotiate the debt on a platform and settle it using a digital means of payment. The software also identifies patterns of behaviour throughout the process – it can analyse the date and time when debtors respond in order to contact them at that time.

In this way, the system interacts with the debtor “to understand what is happening with that debt and to solve the problem as quickly as possible in the most friendly way”, affirms Invisible Collector’s CFO Miguel Rangel, who also shared his experience at the InnovaHome Festival. The goal is not only to collect payments, but also “to ensure that debtor and creditor have the opportunity to continue working together”.

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As a matter of fact, customer retention is even more important in turbulent times. Digitizing the finance department can help companies to optimise tasks, and they can then focus on delivering more value to their users. This is fundamental to ensuring that the crisis does not take an undue toll and to being ready to face future challenges.

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