It is the age-old problem faced by every business: how do they get paid? And it’s an issue that only becomes more pressing as the business grows – the time and effort required to track invoices, chase payments and resolve disputes multiplies rapidly as customer numbers increase. Now US start-up Growfin thinks it can help – it claims its new payments platform will transform the accounts receivable function.
“Traditional accounting systems are designed for the back office of the finance department,” says Aravind Gopalan, co-founder and CEO of Growfin. “What they lack is a way to involve other stakeholders.”
Gopalan believes the pain point for many businesses as they manage payments is that the work involves multiple stakeholders. For example, it may be a finance team that generates and manages invoices, but the customer’s relationship is more likely to be with a sales team member or an account manager. “All of them end up capturing payment information in their own formats and systems,” Gopalan says. “This creates vacuums of information and countless workflow layers, leading to lots of inefficiencies in collecting payments.”
It is a diagnosis that will resonate with many growing businesses. Someone in accounts may have a spreadsheet tracking an invoice, but other relevant customer information may be held in a CRM system or even an email conversation between the client and their company contact. There are countless silos where key data may be found and no-one has visibility across them all.
Growfin’s platform sets out to right that wrong. The idea is that everyone concerned with an invoice or a payment, including the customer, should be able to collaborate in a single space where they can all see the same information – and therefore get to grips with any problems more quickly. “This-first approach will offer better efficiencies, greater transparency and build trusted relationships between customers and businesses,” Gopalan argues.
There will be other advantages too. Importantly, company leaders – in finance and beyond – will have greater visibility over payments and cashflow. The Growfin platform incorporates artificial intelligence tools that provide insight on how and when cash will flow into the business, based on calculations around historic customer payments behaviour. That should enable the business to make smarter decisions and plan more strategically.
The platform also provides CRM functionality for finance teams, ensuring accounts run smoothly and disputes can be resolved as quickly and as painlessly as possible. The platform produces a “health score” for each customer that can help the business identify potential sources of payment delay and focus on constructive dialogue.
It is a concept that appears to resonate with Growfin’s own customers, particularly in the tech-enabled economy where rapid growth is putting payments systems under considerable strain. Early clients have included enterprise customers such as Intercom, Whatfix, Mindticle and Darwinbox, as well as a number of start-ups, all of whom have helped Growfin to develop the platform over the past year and a half.
The company is now set to begin selling the platform more widely and sees a large potential marketplace. In the US alone, the business-to-business payments segment that Growfin is targeting accounted for $25trn of money flows last year, against only $4 trn in the business-to-consumer market.
As for the future, Gopalin sees scope for expansion and development in several directions. “We’re just scratching the surface of the payments problem” he says. “At the end of the day, our role is to help the CEO convert revenues into cash more quickly.”
Building an integrated payment solution into the platform might be one way to address that need. Another could be to use the data that growfin is now beginning to collect to underpin the launch of financing services such as factoring and invoice finance.
In the meantime, Gopalin is simply committed to providing customers with the transparency and efficiency of payments he thinks they currently lack. “We believe that this new way of collaboration-first approach is the need of the hour for B2B enterprises to erase payment woes in a remote, digital-first world,” he says.