Navigating the Future of Finance: Sage’s Strategic Approach

Being genuine and caring deeply about your work isn't a philosophy but a daily practice, says Chip Mahan, Global Head of Fintech at Sage, referencing a principle that has guided his career. 

Sage is a global leader in providing software solutions for businesses, specialising in accounting, financial management, HR, and payroll systems.

Founded in 1981 in Newcastle-upon-Tyne, England, Sage has grown to support millions of customers across the world, from small startups to large enterprises. At its core, Sage aims to help businesses automate complex processes, gain actionable insights, and drive growth through better financial and human resource management. 

This is achieved by integrating cutting-edge technology, such as artificial intelligence and data analytics, into its systems to provide real-time financial data and operational insights that are crucial for informed decision-making. 

Sage provides integrated accounting, payroll, and payment system that enable small and medium business owners to manage accounting, invoicing, expenses, cash flow, bank reconciliation, inventory, multi-currencies, quotes and financials reporting as well as enabling customers to submit tax returns online and be tax-compliant. 

“We are dedicated to embedding sophisticated financial technology solutions within our core accounting software,” Chip explains, developing a tailored approach to meet the “varied operational needs“ of its customers.

“This integration not only enhances our accounting offerings but simplifies them on a unified platform,” Chip notes. The goal, he says, is to help customers “overcome traditional business barriers and focus on growth,” thereby facilitating smoother operational processes and promoting business expansion.

Revolutionising business with fintech

Chip has a multifaceted background, with experiences ranging from U.S. government intelligence to executive roles at Bank of America and American Express. His diverse expertise influences Sage's fintech strategies, which focus on integrating advanced financial technologies into everyday business processes to streamline operations and facilitate growth. He says that Sage's strategy of integrating innovative fintech services directly into its accounting platform revolves around making financial management more seamless and efficient for businesses, and adds that this integration “can greatly enhance user experience and functionality in several key areas”. 

One of these areas is payment acceptance. By incorporating fintech solutions that enable payments acceptance directly within their platform, 

“Sage allows businesses to process customer payments more efficiently,” says Chip.

“This means businesses can accept various forms of payment – such as credit cards, direct bank transfers and online payment services – directly through the accounting software.”

This, he adds, “simplifies the reconciliation process and improves cash flow management”. It also reduces the need for third-party payment processors, potentially lowering transaction fees and simplifying the accounting process.

Another area to benefit from Sage innovation is supplier and employee payments. Sage's integration includes systems for managing payments to suppliers and employees, Chip explains.

“This automates traditionally manual processes,” he says. “For example, businesses can set up automated payments for suppliers based on due dates or receive invoices, directly from the accounting software.”

He adds: “payroll functionalities can also be managed within the same system, ensuring employee payments are processed speedily and accurately, and that they adhere to various tax and employment laws.” 

This, he says, “can lead to significant time savings and reduce errors associated with manual entry”.

Sage’s accounting solutions also offer embedded finance solutions, such as loans or direct-invoicing. 

“If a business issues an invoice through our platform, it could trigger invoice financing options, providing the business with immediate cash flow,” says Chip. “This is particularly beneficial for small to medium-sized enterprises (SMEs), which often face cash flow problems due to delayed payments.” 

He adds that Sage’s partner, Satago, focuses on this embedded invoice-finance functionality, saying that this is a service “that complements our offerings by allowing SMEs to directly access crucial financing solutions through their accounting platforms”.

This approach helps businesses manage their finances more effectively, with better visibility and control over financial data, leading to more informed decision-making and strategic planning. 

“Global integration of financial services and embedded banking solutions are significantly shaping the fintech industry as a whole,” Chip says. “Fundamentally, it's altering the way businesses manage both their finances as well as interact with their different financial systems.”

Key trends shaping customer and partner demands

For customers, says Chip, the most transformative trend is the “introduction of fintech services into core software solutions”. He explains that this streamlines financial operations, from payments acceptance to invoice financing. 

“The global landscape is reshaping customer demands,” Chip says. “With fintech services now being integrated across multiple geographies, businesses can expand their operations internationally with greater ease. This reduces the barriers to entering new markets and supports global growth.”

He adds: “This allows businesses to operate seamlessly in new markets without the need to navigate these complex financial systems as they have in the past, highlighting the shift towards global market accountability and accessibility that modern financial technologies facilitate. 

“This trend not only simplifies international expansion but also provides a clear pathway for companies aiming to scale globally.”

He continues: “Turning to our partners, the focus shifts towards innovation, collaboration, and expanding offerings. The drive toward fintech and banking integrations opens new doors for partners to create refined solutions and to enhance their market position.”

Chip explains that collaborative ecosystems fuel innovation, which in turn drives the development of advanced financial management tools. Partners, he says, may benefit from shared growth and success “because their clients gain from simplified operations, global expansion opportunities, and data-driven answers”.

Sage has a rich and dynamic partner ecosystem, whose businesses are being shaped by significant market forces, Chip points out. 

“The development of services such as payments acceptance, employee payments, invoice financing and expense management into core software solutions across multiple geographies are standardising and simplifying financial operations for businesses of all sizes.”

He adds that an impactful factor across Sage’s partner ecosystem is bank integrations: “The integration of bank feeds into general ledgers is now becoming very common. You're enhancing the financial data accuracy, as well as the accessibility for customers.”

A third force shaping the channel partner landscape is innovative market strategies, such as accounting and compliance as a service. 

“These are a set of accounting services around ledgers, compliance, and reporting platforms partners can access and offer to their customers across their banking platform.”

What does the future hold for Sage?

Sage is set to significantly scale up operations over the next eighteen months, focusing on expanding its cloud-native products across multiple international markets. 

“We're scaling our Intacct business, which is our cloud-native medium segment, and expanding it not just in English speaking countries like US, Canada and UKI. We have recently launched Sage Intacct in France with plans for Spain and Germany in the near future,” Chip reveals. 

Sage is also enhancing its offerings to SMEs by integrating payroll, HR, and planning products into its systems.

“We are scaling the other products by connecting customers to essential business functions such as payroll and HR,” Chip explains. 

Sage has achieved significant growth for its smaller business customers, and its expansion strategy includes an increased focus on integrating cutting-edge technology like AI and generative AI into its network. 

“With the launch of Sage Copilot, powered by generative AI, we're aiming to embed advanced capabilities to automate complex workflows and provide powerful insights for businesses,” says Chip. 

He adds that this initiative is expected to revolutionise how businesses interact with their financial data and streamline operations through intelligent automation.

Sage is not just innovating in product offerings but also in how these products interact with users. A critical feature of the new software alerts business owners of upcoming financial shortfalls, and offers potential solutions. 

“Imagine a tool that not only predicts cash flow problems but also proactively offers financial solutions, like eligibility for loans or grants, surfaced in real-time,” says Chip. 

He adds: “Our solutions also facilitate communications between business owners and their accountants, by scheduling meetings, to ensure all parties are well-informed and can discuss strategies effectively.”

How fintech enhances business operations

Over the past five years, Sage has significantly transformed its service offerings, leveraging cutting-edge fintech to enhance efficiency and cater to a diverse clientele. This shift is central to its strategy to integrate advanced financial technology solutions.

The role of the CFO within companies has also evolved, reflecting a broader industry trend towards a more strategic function, which is enabled by technology. 

Sage’s recent report - The Secrets of Successful CFOs - highlights that 85% of CFOs are poised to assume a more crucial role in strategic planning and counsel, thanks to the global integration of fintech solutions. This trend enables CFOs to provide more insightful, data-driven advice across their organisations, facilitating strategic decisions that propel business growth and global expansion.

Furthermore, as more than half of CFOs prepare to extend their influence beyond traditional financial domains, embedded banking solutions and global fintech services integration play a pivotal role. These technologies provide the foundation for CFOs to offer broader business insights, which are crucial for making significant contributions to areas beyond their conventional scope.

Chip says: “With the integration of AI, CFOs are now better equipped to provide data-driven counsel that shapes company strategies, moving beyond traditional financial management to embrace strategic decision-making. This technological empowerment allows CFOs to focus on high-level strategic planning and operational agility.”

As Sage looks to the future, it is poised to solidify its position as a leader in cloud-based financial management solutions. The company has ambitious plans to expand its global footprint and enhance its AI capabilities, aiming to drive greater automation and more profound data analytics. 

Chip says: “Over the next 12-18 months, we aim to enhance our product suite and extend our market reach, particularly focusing on cloud solutions and AI capabilities. 

“This includes strategic partnerships with over 45 fintech firms like Swoop, Satago and Ramp, which are pivotal in enriching our ecosystem and offering comprehensive, tailored solutions to meet the evolving needs of businesses worldwide.

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