Business Payment Management: Fintech Solutions

According to a survey conducted by Istituto Piepoli, the solution to payment management problems could come from fintech. Tracing an overview of corporate payment management in Italy means analyzing the processes currently in place, highlighting their strengths and weaknesses, taking into account the point of view of entrepreneurs and employees and finally seeking a comparison with the panorama of fintech solutions in India.

To take stock of the current state of the art is a study by the Piepoli Institute on commission, the ” Soldo PMI Spend  Management Report 2018 “. The methodology used for this report is CATI, an acronym for Computer-Aided Telephone Interviewing, typical of quantitative research and known for the absence of systematic errors during data collection.

 The sample analyzed between 15 and 20 November 2017 comprises 400 Italian SME stakeholders in a ratio of 1 to 4 between employees and financial managers. The companies selected for the survey are evenly distributed throughout the country and refer to multiple product sectors with a prevalence in the automotive and construction sectors.

The analysis showed how it could reduce the waste of time and financial resources by adopting process automation solutions with positive repercussions for both companies and employees. Currently, around 10% of financial managers in the sample analyzed take up to 4 hours to control company expenses, and a PMI employee in Italy takes more than 3 hours (192 minutes) to report expense reports every month. 

Among the sectors in which the management of corporate purchases has a greater weight in terms of time are the construction sector, in which it takes an average of almost three hours (164 min), trade (154 min), transport and warehousing (143 min) and rental, travel agencies, business support services (159 min).

Freeing oneself from these activities would mean increasing the time to devote to strategic activities. Nearly a fifth of SMEs reported a need for control over who can spend company money as their main concern, setting a goal for 2018 to automate these processes to make them transparent. 

Transparency and trust are two key terms to understand the importance of introducing solutions within business processes that simplify their execution and limit human error. Traditional techniques, such as using reimbursement notes, have, over the years, allowed unauthorized spending or excessive spending on items for which the company’s money should not have been used. Real-time control would avoid the problem.

Possible Solutions From The Fintech World

The report highlighted ample room for improvement in the management of monetary flows, and a solution that combines employees and financial managers is the one that provides for the use of controlled prepaid cards. The survey shows that 54% of the financial managers interviewed consider this solution the right way to control expenses by reducing the activity of compiling expense reports.

 For 22% of employees, it would demonstrate trust on the company’s part. The benefits deriving from prepaid company cards, such as those offered by  Soldo  – the creator of a multi-user expense account system  – concern both parties and are consolidated as a guarantee of greater efficiency and accuracy in accounting management.

Ease Of Top-Up And Security In Money Transactions

Using a prepaid card is a good and safe solution for reimbursements for those who work off-site or frequently travel for work: the transport of cash is avoided, and the card top-up is immediate. Most companies examined do not follow a specific procedure for advances on expenses to employees. One in four companies said they ask their collaborators for an advance on expenses incurred, especially if the salary received by the employee exceeds a certain amount. 

In travel abroad, you are freed from having to change money into other currencies and have specific control of all those expenses that fall under the T&E, i.e., travel and related business expenses. The survey also found that the company only recovered approximately 9% of cash budgets for traveling employees if used.

Budget Control

A fintech solution such as a prepaid card with centralized billing from an app or control panel allows for real-time control and analysis of expenses. Choosing a solution with reports that can be integrated into company accounting systems also allows for the correct allocation of company expenses and considerable savings in terms of time for administrative departments.81% of the sample of small and medium enterprises declared themselves unwilling to consider the money spent on business needs not correctly allocated in the monthly reports.

Finally, an aspect that does not emerge from the report but which is part of the social responsibility policies towards which more and more companies are proving to be sensitive is that of the digitization of documents and their online transmission: a lower quantity of paper used for printing the various expense reports is equivalent to a small step towards reducing the environmental impact of company activities.

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