Vantage: Solna

Solna is on a mission to empower a generation of entrepreneurs to turn their passions into profit

Can you tell us more about Solna, including what makes your vision unique?

Freelancers and small businesses are missing out on billions every year due to unpaid invoices and the costs associated with chasing payments. With thousands going out of business every year due to avoidable cash-flow problems, Solna is on a mission to empower a generation of entrepreneurs to turn their passions into profit. But profit is more than the bottom line. It’s about growth, market diversity, more job offers from small companies, and more choice for consumers.

We do this by helping freelancers and small businesses overcome the difficulties of late, and non-payments, so they can focus on the more important things. Solna provides freelancers and small businesses with the tools to help them manage their finances, stay on top of their cash flow, and get paid more efficiently, as well as offering them the right insights at the right time so they can manage and mitigate any future risk.

It’s fewer sleepless nights and more time turning dreams into actions.

Solna claims to be innovating in the invoicing process – what did you feel needed changing or was missing, and why?

There are a number of issues regarding the invoicing process and late payments, at a micro and macro level, that we feel needed addressing. Some of these we have addressed in Solna, while others still need to be tackled.

As it stands, there are a number of invoicing tools available. Many of these are full of accounting jargon or designed by accountants, and can often be confusing, inaccessible, and intimidating. To put it bluntly, they are not designed with the freelancer or small business owner in mind. We wanted to offer users an intuitive tool that removes all complication and puts numbers into meaningful context.

Small business owners are often not aware of, or don’t have access to the risk insights they need to help them take control of their cash flow. Our vision is to provide even the smallest of companies with the tools, processes, insights and cash management tools required in order to be successful in business. And we’ve built Solna with that in mind. We see this already happening in other industries, where individuals or business are given better tools so they can take control of their lives.

As I mentioned above, there is still a lot that needs changing and needs to be addressed. Right now there are very few consequences for companies paying their suppliers late. In particular larger companies who use delayed payments to smaller suppliers as a method of optimising their own cash flow. We would like to see the government enforcestricter guidelines and penalties levied at the worse offenders. The private sector can help by creating innovative solutions that leverage emerging technologies like blockchain, and AI. By tackling this issue from a regulation and technology perspective, we feel that the culture of late payments can finally be abolished.

We’ve seen companies in the Accounts Payable space harnessing various technologies, including voice technology and mobile solutions to approve, make and manage payments. What technologies are you leveraging and looking to leverage and why?

The causes of late payments are numerous and while mobile solutions and voice technology help SMEs access and send invoices on the go, they aren’t the best at tackling other areas of concern. To give an example, being able to send an invoice via voice command might improve the ease in which you can get an invoice out, but it doesn’t help the small business get the invoice paid on time or find a solution if it’s late or not paid at all.

Our focus initially has been on providing SMEs with access to tools and data (e.g. credit scores) and services, that were traditionally out of reach for them, with the use of APIs. Thanks to APIs we’ll be able to provide SMEs with access to the right type of financial services in the event of non-payment by their customers. In the future, we are particularly interested in exploring how blockchain technologies can be used to solve the issues of late and non-payments, with specific focus on traceability and time stamping through the entire invoicing process, as well as tracking invoice ownership which is relevant for factoring and invoice discounting.

Are there any features that you are developing that will make your proposition best in class? And how do you determine what features are important to the small businesses that you are targeting?

We constantly seek feedback from our customers and use this information to develop and improve the product. Since launch, we’ve got a lot of interest from international customers, so we are now in the process of internationalising the product.  Integrations with challenger banks (e.g. Starling Bank / Revolut) are also on our product road map, as well as providing financial services throughout the platform along the user journey.

How important is customer experience in the invoicing process? How is Solna competing on user / customer experience?

Customer experience is probably one of the most important things. Customers today expect a great experience no matter what app/service they are using. For us, building a great product is one of our key pillars to achieving success, and this cannot be achieved without input from our customers.

We conduct weekly customer feedback calls to measure satisfaction and get a handle on how customers are using Solna, to understand and address any issues they are facing, and any features they feel are missing. With that valuable feedback, we are able to get a clear picture of what is happening, resolve any issues, and also go after the right opportunities.

We are happy that so far customers are enjoying using Solna. The clean and simple UX is often cited as a key reason that customers use Solna vs. some of the more ‘bloated’ apps that have been built by our competitors.

We have seen different alternative credit assessment methods emerge recently. How does Solna approach credit scoring? Does it involve alternative data sources or checking approaches? What makes your approach unique and how successful has it been?

Credit checking is something that small business owners, unfortunately, do not do enough of. There are a number of reasons for this. Traditionally, gaining access to credit scores has been expensive and too complex for the smallest companies. In other cases, small businesses are not aware of some of the tools that they can be using to their advantage, and often become aware of these when it is too late. By overlaying credit score data into the invoicing process, we hope to educate SMEs in the importance of credit checking their clients, before and during an ongoing relationship. As a first-line-of-defence, businesses need to be aware of what they can do to help minimise the prospect of delays in payment. Giving them access to the financial health of their clients can help avoid the risks associated with late payments.

We’ve seen credit scores being utilised effectively in the consumer market, with companies like Clearscore (acquired by Experian for £275m) bringing this technology and its benefits to the masses. It only makes sense that the same is applied to business.

Late payment is an enduring industry issue. What steps can a customer take to reduce late payment time and what support do you offer in this regard?

First things first, invoicing at the right time and sending an invoice that includes; all the right details, necessary information, and sent to the right person is probably the most important thing. It’s surprising how many invoices don’t get paid because they have gone to the wrong person or did not have the right information.

It is important to credit check and consider the risk of any customer – which is why we’ve included this within Solna. Understanding their financial health will help decide if a contract should be entered, and what payment terms should be set.

Setting clear payment terms is key. These need to be highlighted on all invoices and every email sent. These reinforce the terms of the agreement and ensures they are not missed by the customer. It’s also important to ensure the right payment terms are set, for example, a freelancer doing a small job, that can’t afford to get paid 30+ days after invoice issue, may ask for payment in advance of work or opt for shorter payment terms (Net 7 or Net 10).

We need to make it easy for  customers to pay. Invoices can take time to process, so removing any obstacles that could delay payment is important. We’ve integrated with Stripe so users can have faster, hassle-free payments, online straight from the invoice.

Chasing up late invoices can be time consuming, but it is as important as sending out the invoice in the first place. Some customers simply forget to pay, so if an invoice becomes overdue, it needs to be chased right away. That way the customer is reminded and they can action it. We’ve simplified the process in Solna by allowing users to set up automatic reminders, that chase the invoice until it has been paid.

Stripe is a provider that is seen as very innovative in financial services at the moment – and it’s interesting to see that you have partnered with them. What value proposition do you believe this will offer your customers?

Stripe is a leader in the payment space for the simple reason that they provide solutions that work. By embedding Stripe payments into our software, we provide our users with the ability to offer their customers multiple payment methods, thus speeding up overall payments.

Our goal is to partner with all key payment processors and allow users to get paid in many ways; PayPal, GoCardless (Direct Debit), Bank Transfers.

Solna is London-based, how do you foresee Brexit impacting your company and wider innovation in the FinTech space?

We’re an internationally diverse team, so we were definitely in the ‘remain’ camp when the public voted. One of our biggest fears in the tech space is that Brexit might see companies leaving the UK in favour of European cities (i.e. Amsterdam, Paris, Frankfurt) and this might make the UK less attractive to investors and acquiring top talent.


About the Author:

Dr. Inna Kaushan
Co-Founder & CEO

With a background in finance and investments, and having gained a Ph.D. in Economics, Inna is at the forefront of setting and driving the company vision and strategy.

Prior to setting her sights on helping small businesses, Inna spent a number of years helping larger businesses achieve growth in investment banking. After a successful career in several senior positions, she decided to risk it all and follow her dream of becoming an entrepreneur. After having lived and worked in 5 different countries to pursue successful careers throughout, she shifted her focus on leading a newly launched company which aims to help small businesses and their finances.

More about the Vantage Series:

This post is part of the Vantage series by KAE that provides a fresh perspective and hears first-hand from various players across the FinTech & CX ecosystem.

KAE will be posting a number of interviews with companies that share their candid viewpoints and to really get under the skin of the FinTech world and Customer Experience within various industries.

If you would like to share your views and participate in the Vantage series, feel free to reach out to us at Vantage@kae.com.