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Tuesday, November 5, 2024

A Small Business Banking Platform That Helps Owners Gain Cash Flow Clarity

Smart Banking That Puts Smbs In Control Of Cash Flow
Mike Senecal

Writer: Mike Senecal

Mike Senecal

Mike Senecal, Staff Writer

Mike Senecal draws on more than 20 years of editorial experience to update CardRates.com readers on industry trends, business news, and best practices in budgeting and credit use. Mike has worked for decades in academic and trade publishing, including roles as managing editor and technical editor at the University of Florida and as contributor to finance industry publications, including Surety Bond Quarterly and Independent Agent, among others. Mike holds bachelor’s and master’s degrees from the University of South Carolina, and he enjoys bringing his years of academic and industry expertise online to help consumers of diverse financial backgrounds.

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Lillian Guevara-Castro

Editor: Lillian Guevara-Castro

Lillian Guevara-Castro

Lillian Guevara-Castro, Senior Editor

Lillian Guevara-Castro brings more than 30 years of editing and journalism experience to the CardRates team. She has worked at The Atlanta Journal and Constitution, Gwinnett Daily News, Gainesville Sun, and The New York Times, where she covered demographics, consumer issues, and the business and financial sectors. Lillian has a degree in journalism and communications from Georgia State University and brings her fact-checking expertise to ensure Digital Brands content is accurate and engaging.

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Adam West

Reviewer: Adam West

Adam West

Adam West, Managing Editor

Adam has interviewed over 1,000 finance experts since joining the CardRates team in 2016. He spearheads industry news coverage related to helping consumers achieve greater financial literacy and improved credit. He has more than 12 years of storytelling, editing, and design experience in print and online journalism and is most knowledgeable in the areas of credit scores, financial products and services, and the banking industry.

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In a Nutshell: Having the confidence to make the right decisions at the right time is essential to small business success. Knowing at a moment’s notice what money is coming in and going out is a big part of that. Relay puts SMBs in charge of cash flow by connecting business banking and accounting directly in one platform. Users can open multiple business checking and savings accounts that integrate with back-office tools like receipt management and accounts payable. They can also issue and set up team spending controls across multiple physical (or virtual) debit cards, and, most recently, apply for the Relay Visa® Credit Card. Smart banking from Relay helps up-and-coming small businesses gain maximum cash flow visibility on their way to sustainability and growth.

Every business wants a faster, better, and cheaper way to manage money. Maybe you can figure it out if you’re on the enterprise level and you have teams to build solutions. But it’s a different story for small businesses when an owner/manager and a few employees handle everything from A to Z.

Unfortunately, your bank balance may be your ultimate measuring stick for financial decision-making when it’s just you at the controls. That’s the case, for example, if you check your bank balance to figure out whether paying an unexpectedly steep bill threatens your ability to make payroll next week.

You’re running your business in your head if you’re doing it that way — and you know it. Incomplete information can lead to stress, uncertainty, and counterproductive decision-making. Constant mental juggling and fiddling with piecemeal software solutions can draw you away from what got you into business in the first place.

Relay logo

That’s a recipe for fading away instead of besting the competition. Turn efficiencies into insights with Relay, which provides cash flow clarity SMB owners can trust by linking banking with accounting and bookkeeping to reveal the implications behind the numbers. Co-Founder and CEO Yoseph West told us uncertainty about money routinely holds SMBs back from reaching their potential.

“Our recent Cash Flow Compass survey of more than 750 U.S. small business owners across America found that 91% face a serious cash flow challenge, and most of them never see it coming,” West said. “Missed or delayed payments caused by financial bottlenecks — which 31% of respondents experienced this past year — can impact your ability to pay rent, your suppliers, or even your employees.”

Relay fixes that with flexible business checking that integrates with accounts payable, automated savings that can earn up to 3% APY, receipt management to track expenses, and the exclusive Relay Visa Credit Card, available via invitation to select clients interested in growing their financial safety net.

“The card pays 1.5% cash back on everyday purchases with no minimum spend,” West said. “You gain a more complete picture of your cash flow when your credit, debit, and savings are working together under the Relay umbrella.”

Streamlining SMB Financial Management

The mantra of achieving things more efficiently is a given at Relay — cash flow clarity for SMBs is the ultimate mission behind everything on the platform. A traditional bank account provides static information. Relay puts that information in a real-time context.

Ten years of fintech experience before co-founding Relay in 2018 taught West the power of meeting small business owners where they are. When deciding between designing a product for how you think things should work versus how they really work , Relay always chooses the latter strategy.

“The best software is opinionated, and our core opinion is that every small business is unique,” West said. “So we designed our system to be simple but powerful and flexible.”

Relay Business Checking offers access to up to 20 separate checking accounts and 50 physical or virtual debit cards with no account fees or minimum balances. Deposit and pay digitally or via ACH transfer, wire, check, or cash. Automate transfers into separate checking accounts according to dollar amounts or percentages.

Yoseph West
Yoseph West is Relay’s Co-Founder and CEO.

The platform automatically codes team member debit purchases, pulls in clean, standardized vendor data, and captures and stores receipts. You get a comprehensive view of what’s coming in and going out that then syncs to accounting platforms QuickBooks Online and Xero for quick and accurate reconciliations.

“Setting up budgets, controls on individual accounts, automatic transfer rules — that’s all easy and customizable to you, your business, and your preferences,” West said. “It’s all about how you want to run things.”

Many Relay customers come to the platform to implement the Profit First methodology of entrepreneur and author Mike Michalowicz, which is directly integrated into Relay. The idea is: income minus profit equals expenses. By setting aside your profit from the start, you avoid overspending and ensure profitability, putting you in better control of your cash flow. There’s even one-on-one counseling with certified Profit First Professionals.

Small businesses who apply Profit First are organizing their income across distinct accounts, each with a set purpose.

“They’ll set up dedicated accounts for income, tax, payroll, inventory, and operating expenses,” West said. “And as funds come in, rules automatically transfer specific percentages into different accounts.”

Integrations and Credit Card Add Value

That’s the challenge for a surprising percentage of small business owners, according to Relay research: keeping money in its intended bucket despite the many pressures to the contrary.

“They dip into their payroll or their tax money just because they’re trying to serve their customers better,” West said.

Integrations keep things straight. For example, the connections to QuickBooks Online and Xero reduce duplicate transaction syncs. They also remove typical authentication barriers between platforms and enable code-free accounting due to the quality of Relay’s data.

As part of the Relay Pro package, the platform can pull in unpaid bills from accounting software to manage the entire approval and bill pay process.

Relay Visa Credit Card
The Relay Visa Credit Card pays 1.5% cash back on all purchases.

An integration with the payroll provider Gusto provides an additional measure of protection through Shortfall Analysis. Relay checks Gusto to see if there’s a pay run coming up for the business. If there is, Relay compares the money in and money out historically for the account connected to Gusto to determine if a warning is warranted.

“We might ping you to say you might not have enough money for this upcoming pay run and that we recommend moving some money around,” West said. “What we hear from small business owners is that it’s a lifesaver.”

Perhaps the most significant recent launch is the Relay Visa Credit Card, which provides relief to entrepreneurs accustomed to waiting for money to come in before taking action. Customers who receive Relay’s invitation to participate in the card program gain the additional cash flow flexibility of a 30-day repayment term with 1.5% cash back on all purchases, no minimum spend required.

“What comes with that is receipt management and the ability to integrate your card spending with your accounting tools,” West said. “Not only do you get the full experience of a modern small business credit card with competitive rewards, you also gain the confidence and tools to keep your back office in a compliant state.”

Helping Small Business Owners Get Paid

Relay’s practical, results-oriented solution set came about in part due to West’s developmental experiences in fintech.

At Wave, a provider of accounting software for micro SMBs, the product didn’t really take off until it began to offer invoicing. Then, bookkeeping software provider Hubdoc built global strategic partnerships with Intuit (maker of QuickBooks Online) and Xero but found tough sledding getting users to adopt a comprehensive financial system of record when all they really wanted to do was check cash on hand.

“We learned that as much as they want to be good at accounting, it’s not the language most small business owners speak,” West said. “They don’t speak profit and loss in the accounting sense. The language they speak is cash.”

In that world, connecting smart banking to the back office is the most direct solution to ensure money arrives when and where it’s intended.

Onboarding is an automated, 10-minute process with a focus on making it as easy as possible for a small business owner to get started on the platform. Training resources include a biweekly small business webinar that attracts thousands interested in leveraging the platform for their unique needs. Dedicated customer support via chatbot, email, and phone ensures timely and helpful responses.

“That’s how we help our customers be as successful as possible,” West said.

Exceptional retention is a hallmark of Relay customer relationships. Many customers stick around after their original signup because they can’t return to the status quo after they discover the peaceful feeling of having their money all lined up. One, a small-batch artisanal bakery in Denver called Rebel Bread, reported that before it signed on with Relay, the approach of payroll was a stomach-tightening event.

“Now they have the confidence to walk what we call the cash flow tightrope,” West said. “It’s about making sure money is where it needs to be, when it needs to be there.”