Sage has announced a new integration with Stripe for Sage Business Cloud Accounting (Sage One) with Stripe.
Sage believes that small and medium size businesses can accelerate the payments cycle through the integration and receive payments twice as fast on average. This helps to reduce the problem of late payments for SMEs.
The challenge of late payments to small businesses was highlighted by Alan Laing, Sage MD UK&I recently in an interview with Enterprise Times. This announcement follows on from a comment he made in the interview about how Sage are helping to address the problem. He said: “Payments. We are doing much more around payments on partnerships with GoCardless, Stripe. We think in our payments business we can do a lot more by partnering with organisations than doing it all ourselves.”
Answering the late payments challenge
According to research by Plum Consulting and Sage, late payments stand at around £112 billion in the UK economy. That leads to a huge impact on small business through lost time and cost in chasing up the arrears. According to the research, 17% of all payments made across the UK are late and as much as 9% are eventually written off as bad debt.
Helping to solve the problem
The new integration between Sage Business Cloud (SBC) Accounting and Stripe streamlines the whole payments process. It allows organisations to send invoices electronically. Recipients are able to pay through debit and credit cards in a similar way to an ecommerce store. Enabling customers to use instant payment methods and removing paper-based or even electronic invoices should mean they pay faster.
Once the invoice is raised customers are able to follow a link to view the invoice hosted on SBC Accounting and pay immediately. Sage also commented that it introducing the ability for Sage customers to: “activate payment and invoice services in less than five minutes from within their software”. It will enable them to take payments over the phone or through the “Pay Now” button. They can also create personalised invoices using the Sage Mobile app.
What will the impact be?
Sage believes that payments will take on average half the time if SMEs utilise the integration. Companies will also see improved cash flows as a result. Iain McDougall, UK and Ireland Country Manager at Stripe said: “Sinking resources into needlessly laborious tasks isn’t a good use of time for any business. Stripe develops tools and features that make running and growing an internet business easier. We’re excited to work with Sage to improve payments experiences and simplify payment reconciliation for their customers, all the while reducing pay out times for many suppliers.”
What Sage has not done is extend the relationship with Stripe to include banking payments. This is something that Xero recently partnered with Stripe in the US to do. It would have been a differentiator for Sage ahead. Xero already offers payments integration with Stripe.
What does this mean
Laing also inferred that there are other product announcements to come in the next few months. This is the first of several integrations and product updates that Sage are likely to announce. It also shows that Sage are delivering on their promise to help small businesses improve payment times. Seamus Smith, EVP Payments and Banking at Sage, commented: “Today’s launch is an example of innovation and collaboration in fintech, providing customers with world-class products that will revolutionise the way they work, no matter what stage of their business journey they are at.
“We know cashflow is the lifeblood of business – yet businesses in the UK spend on average 15 working days chasing late payments – this is unacceptable. These are problems that can be easily fixed with the right technology solutions, designed to make invoicing and other admin tasks seamless. Accelerating payments is an absolute priority for any business and I’m delighted to see Stripe’s integration embedded into the Sage platform to target this important issue.”
The language in the press release is also interesting. It states that this is a partnership with Stripe which would imply other Sage products will also be integrated with Stripe. However, there is no announcement about Sage Financials (Sage Live). We have contacted Sage to see whether they can confirm further Stripe integrations and what the likely timescales are.