Tipalti Takes Cloud Tech to Bigger Small Businesses

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While it's generally good news when a business gets larger, that growth can quickly get stunted if the company gets hamstrung by a more complicated supply chain.

International payments platform Tipalti says the answer can be found in a bundle of hosted and Web-delivered merchant services to simplify payment reconciliation, legal forms and links to enterprise resource planning.

Tipalti has updated its supplier payments automation platform to include a cloud-based integration with NetSuite's enterprise resource planning system. This allows execution and reconciliation of check, debit, electronic, PayPal and other payment methods.

The integration is geared toward companies that are approaching 100 payments sent and received per month, with a particular focus companies that have reached that milestone quickly.

"When you grow and get up to about 500 payments or more, there is where the sheer volume of payments can become hard to track," said Rob Israch, Tipalti's chief marketing officer.  

Tipalti hopes the integration can also aid international payments. "As you start putting suppliers in diverse regions, you start working with bigger suppliers who have different payment needs," Israch said. "One may want ACH, another may want a wire or an international e-check."

Other services include user-driven onboarding, integration with vendor records, automated vendor data management and tax form delivery and constant payment status reporting to suppliers.  The tax forms are collected, verified and screened for compliance and risk.

Tipalti made the adjustment based on feedback from existing users that were looking for more visibility in the connection between resources and cash flow. "The finance folks that we work with wanted payments in their ERP systems, so if a supplier needs to know where  a payment is, they can look that up," Israch said.

Information becomes harder to manage as business billing changes from paper to electronic and volume increases, according to Andy Schmidt, an executive advisor at CEB.

"If the inbound payments department doesn't have the invoice information, for example, it can be a while before the receiving business can apply the payment to the right place, so getting the right payment to the right invoice quickly is a big help," Schmidt said.

Tipalti's cost for setup is about $2,000 with a monthly fee of about $200. "A lot of our customers are already Netsuite customers, so it will make life easier to be able to find payments data in the ERP system," Israch  said.

For Tipalti, which specializes in processing mass payments for geographically disparate networks of contractors, such as freelancers, it's a chance to diversify by adding easy access to other services. It earlier added tax documents and advertising campaign payments to its mix.

A number of other companies offer similar mass payment services, such as Payoneer, Western Union and Dwolla, creating an impetus for a broader product set, similar to the mobile point of sale market—where simply enabling payments is not enough in a crowded industry. Other companies such as BillTrust and Bill.com are specifically aimed at automating business to business payments.

"As small businesses grow in size, particularly when they are experiencing rapid growth, the level of complexity in how they pay their suppliers and manage their business systems grows exponentially," said Michael Moeser, director of payments for Javelin Strategy & Research.

For example, adding a new supplier is not as simple as adding a bill, since the supplier will affect other systems such as supply chain logistics, financial reporting, inventory management, tax compliance, regulatory audit and accounts payables, Moeser said.

"Because of the power of the cloud, software companies are increasingly able to serve smaller-sized businesses with fully integrated solutions that typically have been reserved for larger organizations," Moeser said.

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