FinTech Companies Powering Seamless and Invisible Small Business Operations

February 15, 2017     By : Elena Mesropyan

99.7% of all businesses in the US are small businesses

Small businesses present a strong community-building and economy-driving force in any nation. Furthermore, countries that created the most business-friendly regulatory environments for setting up and running a business, are some of the most prosperous. While the US has something to learn from New Zealand, Singapore and Denmark in that regard, the small business ecosystem in the US is a massive industry and represents 99.7% of all US businesses.

FinTech Companies Powering Seamless and Invisible Small Business Operations

Source: U.S. Small Business Profile, 2016 by SBA Office of Advocacy

According to the U.S. Small Business Administration:

  • The 28 million small businesses in America account for 54% of all US sales.
  • Small businesses provide 55% of all jobs and 66% of all net new jobs since the 1970s.
  • The 600,000 plus franchised small businesses in the US account for 40% of all retail sales and provide jobs for some 8 million people.
  • The small business sector in America occupies 30–50% of all commercial space, an estimated 20–34 billion square feet.

One of the factors contributing to small business growth is the cost-efficiency of running the business itself, which includes an invoicing system in place, payroll (including remote employees), HR, insurance, bookkeeping, compliance, etc. Seemingly small parts of the whole are actually the wheels of the business – the right vendors allow entrepreneurs to focus on delivering the value to their customers and improving products/services.

Just in a five-year span, all that backend part of a small business has been reimagined by the FinTech community. Further, we will look at five examples of FinTech companies that significantly reduced the time and cost of getting the business up and running in the most efficient and compliant manner not only in the US but for small businesses around the world.

5 examples of FinTech companies empowering small business entrepreneurs

One of my favorite examples is Holvi (acquired by BBVA) – the world’s first financial hub operating with its own Payment Institution License authorized for operations across Europe by the Financial Supervisory Authority of Finland (FIN-FSA). It’s a current account combined with Holvi Business MasterCard. With Holvi, business owners can manage everything from selling online and invoicing customers to managing expenses and automating bookkeeping.

Holvi allows entrepreneurs to set up and run an online store in just a few clicks with no need for expensive software or coding skills. It’s fully integrated with business account and bookkeeping. Sales are tracked and recorded automatically so business owners can focus on getting more, rather than copying the details of previous sales into accounting software.

The features include:

  • Holvi Business Account
  • Holvi Business MasterCard
  • Business Apps
  • Paperless bookkeeping
  • Mobile app

Quickbooks (by Intuit) is another notable company. The features span is vast and has all a small business needs in one:

  • Everyday organization (automated expense reporting, automatic tracking of inventory on hand and per item cost so owners can see how profitable they are)
  • Cash Flow management (automatic bill pay, overdue payments tracking)
  • Invoicing (custom, professional invoices, sales receipts, Pay Now button integration for one-click payments and online invoices)
  • Reports (one-click reporting, dashboard overview)
  • Taxes (option to share access with an accountant, automatic subcontractors payments management)
  • Mobile
  • Payroll (W-2, error-free paychecks, payroll taxes filing)

Wave may be lesser-known, but just as interesting a case as previous ones. Wave offers a cloud-based platform that provides accounting, payroll, payments, lending, accounting, invoice, receipts software tools for small businesses and individuals. The software itself is 100% free; there are no usage limits and no fees. Instead, Wave’s services are pay-as-you-go; entrepreneurs only pay for what they use.

Following are some of the features in Wave account:

  • Accounting (a full-featured accounting app for no charge whatsoever)
  • Invoice (custom invoices, automated reminders for timely payments)
  • Payments (credit cards acceptance with money going right to businesses’ bank account)
  • Payroll (tracks salaries and hours worked, manages tax deductions, includes direct deposit)
  • Receipts (receipt scanning with phone, after which they automatically appear in accounting, email receipts also can be uploaded into Wave)
  • Personal (PFM)

BodeTree is a slightly different case its platform is focused on bridging the gap between financial institutions and small businesses by providing otherwise inaccessible financial insights. BodeTree platform is an online financial management platform that solves the major problems plaguing both small businesses and their financial partners. By connecting securely to a variety of data sources (bank account, credit cards and accounting systems), BodeTree’s platform generates the financial statements that institutions need to make quick and accurate decisions about what products and services are right for each business.

BodeTree provides a suite of services, including:

  • Aggregated financials from all business-related accounts
  • Automatically constructed financial statements (no data entry required)
  • Numerous financial ratios—cash balance, current ratio, quick ratio, profit margin analysis, expenditure analysis, etc.
  • Current business valuation and future forecast
  • Business health score based on financial performance
  • Competitive analysis and insights based on similar companies

When combined with smart alerts that notify small businesses and their financial partners when opportunities arise, these tools help small businesses better understand and manage their finances and gives their financial institutions better insight into what products and services will serve them best.

Zoho is an operating system for businesses – a single cloud platform with all the necessary applications to run a business entirely from the cloud. Businesses can acquire and manage customers using Zoho’s marketing, sales and customer support applications – Campaigns, CRM and Desk – and can then empower employees to create, store and distribute content on the cloud with Zoho’s productivity and collaboration applications – Office, Mail and Docs. Additionally, businesses can run their own operations on Zoho’s finance and human resources applications – Books, People and Recruit.

With Zoho suite implementation small businesses can:

  • Collect one-time and recurring payments with ease – Zoho Checkout offers the ability to collect payments on an online platform where businesses can set up one-time or recurring payments, or allow customers to choose how much they will pay at checkout. It also provides users with the ability to embed the payment pages on a company website or share the URL via email or social media.
  • Freelancers and business owners can now accept card payments without having to worry about the complex compliance processes involved while collecting card details from customers. Zoho Checkout ensures data security with PCI DSS compliance and SSL encryption.
  • Customize the payment platform to match the look and feel of a company’s brand (customization options include background colors, images, and logo, header and footer fields).
  • Sell products across borders and accept international payments through partner integration.
  • Handle payment failures effectively – in the event of a recurring payment failure, Zoho Checkout can automatically retry the customer’s credit card up to three times based on a configurable schedule, with a notification sent to the customer each time a retry fails
  • Connect a mailing list to a particular payment page so that customers using that page will automatically be added to the list and thereby extend a company’s marketing reach.
  • Real-time analytics and insights into revenues, failed payment tracking and follow-up customer communications.

A business can choose to run the entire Zoho suite or just a single application. Zoho applications are available directly through zoho.com, or through an ecosystem of Zoho API integration partners worldwide.

The mentioned companies are not alone in their quest of empowering small business entrepreneurs, over 250 innovative organizations are reshaping how businesses are set up and run. They cover such areas as risk management, compliance, bookkeeping, accounting, taxes, payroll, etc. More importantly, they release limited resources of small businesses teams for reallocation in areas that are critical to long-term success – product/service innovation, customer and vendor relationships development, research, among other things.

Elena Mesropyan
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Elena Mesropyan

Elena is a Market Research Analyst at LTP. She is a research professional with a background in social sciences and extensive experience in consumer behavior studies and marketing analytics. She is passionate about technologies enabling financial inclusion for underprivileged and vulnerable groups of the population around the world.
Elena Mesropyan
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