Unpaid invoices and late payments can prove to have devastating effects on small businesses. But is there a solution to this problem plaguing SMEs?
To find out more about how some firms hope to tackle this issue, The Fintech Times spoke to Andy Taylor, founder of Payful, a B2B payments intelligence platform looking to end late payments.
Tell us more about Payful and its offering
At Payful, we want to set the global benchmark for timely B2B payments. As a company, we are on a mission to empower businesses regardless of their location to receive prompt payments and overcome the challenges of late payments. At our core, we are dedicated to supporting freelancers, micro-businesses, and SMEs to get their invoices paid on time by simplifying a complex process to mitigate the risk of late payment.
To do this, our insight product leverages behavioural data to accurately predict payment timelines. We inform our users about payment patterns, enabling them to anticipate when invoices are likely to be paid.
For example, our data can alert users to companies that routinely settle invoices beyond their due date. Additionally, our payment terms product empowers businesses to establish clear payment agreements with their clients.
By facilitating transparent discussions and securing mutual agreement on payment terms, we cultivate a culture of prompt payments. What’s more, once payment terms are agreed upon, we track whether an invoice was paid on time and feed that data back into our insights system. By doing so, it’s in the best interest of our users’ clients to pay invoices on time as it directly affects their standing within our system.
What problem was Payful set up to solve?
Two words; late payments. Currently, 49 per cent of invoices issued by small businesses are paid late. In the UK alone, we’re losing around 50,000 small businesses a year due to late payments. Right now, most freelancers, micro-businesses and SMEs do not know how to set credit terms adequately and larger companies are taking advantage of this.
Similarly, there’s currently no way to access reliable risk data. Not only is credit reference data expensive but it’s based on historic financial accounts and doesn’t account for ‘the now’. Unfortunately, it’s fuelling poor decisions. Ultimately, the solutions we have today are only helping to mask the problem of late payments, not eliminate it.
Since launch, how has Payful evolved?
Our journey began with the belief that the lack of transparency in payment behaviours was a significant problem, which needed addressing. To tackle this issue head-on, we developed an API and integrated it with accounting platforms. However, upon launching our solution, we quickly realised that this was only scratching the surface.
Launching helped us gain valuable insight and understand that a comprehensive, full-stack approach is necessary to truly solve the problem. That’s why, we’ve since evolved our strategy to encompass three components:
Insight – provides unique insight into the payment behaviours of businesses around the globe.
Payment Terms – helps SMEs navigate the complexities of dealing with larger businesses, understanding payment terms, and making it easy for them to be agreed upon.
Collections – renders collection products obsolete by making payments easier.
What has been the biggest challenge or most ‘tricky moment’ to overcome?
Navigating the market and securing early adopters for our product was a crucial milestone but it wasn’t always an easy process. Bringing any startup to market is rarely straightforward, especially when faced with limited resources in the pre-funded stage. However, we are addressing one of the most significant challenges faced by B2B businesses today – a problem that exists in a market opportunity of over $300billion.
I think that’s what has shone through to early adopters and is a big part of the reason why Payful has been such a success so far. While the path may not be easy, we believe in our potential and the positive change Payful can bring to B2B businesses. With every step forward, we gain valuable insight, refine our strategy, and steadily build momentum. By learning from these tricky moments, we’ve become an increasingly resolute business.
What are your biggest achievements or ‘proudest moment’ so far?
Since launching in April, it would have to be onboarding our first paying customer. I’m pleased to say that we’re now into double figures and rising quickly. This growing customer base has given us even greater insight into the power of our platform. In fact, our system has helped customers to have over 90 per cent of their invoices paid on time.
How would you describe the culture of your company?
At Payful, we firmly believe that transparency is the foundation upon which trust, accountability, and prompt payments are built. It is ingrained in our culture and guides our every decision. We understand that transparency should not be limited to our product alone; it must extend internally to our organisational culture and externally to our customers. From our first day, we’ve valued openness, collaboration, and inclusivity, which has helped us iterate and adapt at speed.
What’s in store for the future?
We have an ambitious milestone to help one million businesses eradicate late payments by 2030. To achieve this, we must integrate a seamless payments solution into our product stack. Our current focus is on simplifying invoice payments with a one-click solution directly from the email inbox. In the short term, we are preparing an angel round of funding to fuel growth and accelerate progress in preparation for seed fundraising in 2024.
Image and article originally from thefintechtimes.com. Read the original article here.