2022 was a tough year for the dealmakers and the industry by and large. Mergers and acquisitions activity plunged in the second half of last year and has been in overall decline since then. This holds true for firms that focus on mega or billion-dollar deals comprising corporate payments directed at large enterprises.
Contrarily, mid-market businesses continued to thrive despite macroeconomic pressures. Business owners that operate in the small and lower middle market, saw a nearly 20% increase in deals in Q3 2022 compared to Q3 2021.
About 85% of the businesses in the US fall into the lower middle market category, according to the latest US Census/County Business Patterns series. In 2022, the rate of year-over-year employment growth in the middle market jumped to an all-time high of 11.1% with 57% of companies expanding the size of their workforce. In 2023, a large number of businesses are still bullish to continue to expand their workforce.
Most middle-market companies are hopeful and expect better conditions in 2023, according to the Citizens’ 2023 M&A Outlook survey. More than 80% of US middle-market companies and private equity firms see eye to eye on the possibility that company valuations will likely be stable or higher in 2023 after a period of notable price adjustments.
However, middle market leaders continue to voice concerns related to inflationary adjustments and maintaining growth, while supply chain challenges continue to be a significant obstacle – all of which reflect continuing headwinds to 2023 growth projections.
To target some of these key pain points for businesses and suppliers classifying as the mid-market accounts payable software solutions provider AvidXchange has introduced AvidAnalytics – a new business intelligence solution that aligns its buyer customers’ transactional data, enabling them to make smarter decisions.
BI solutions are designed to help today’s organizations make data-driven decisions. These solutions collect and process large amounts of data and present it in easy-to-consume, interactive formats.
AvidXchange tracked down that its buyer customers were having difficulties managing large amounts of data through their invoices, purchase orders, and payment transactions. In a recent AvidXchange survey, 70% of companies said their finance department is assigned to produce more detailed reporting and analysis in 2023, while 61% indicated their finance team always or very often relies on reports and analysis to inform business decisions. After going over the data, the company used this opportunity to innovate what’s currently being offered in the industry in regard to reporting methods.

Source: AvidXchange
The new offering uses accounts payable metrics along with intelligent analytics, dashboards, and embedded data visualizations to help middle-market businesses improve spend management and drive stronger operational efficiencies. These analytics support businesses to make more informed decisions for portfolio management, budgeting, trending, and forecasting.
Businesses can also increase the visibility of their payment cycles through visual dashboards that highlight where money is being spent and help manage all supplier relationships and company purchasing by identifying areas for cost-cutting and improving efficiency. This data is presented in pre-built or customized dashboards and reports based on a wide variety of data points to provide business leaders with everything in one place to meet the needs of their organization.
Late last year, AvidXchange debuted its cross-border payments service – aimed at facilitating mid-market businesses’ need to process cross-border transactions. The service was embedded into the accounting platform Oracle NetSuite.
Going forward, the firm will evaluate the need to offer AvidAnalytics to Oracle NetSuite customers using cross-border payments solution via the SuiteApp within NetSuite’s SuiteCloud platform, according to Serdar Dincaslan, senior vice president of business insights, decision science, and network growth at AvidXchange.
“With other new product launches, we hope to bring the associated data into AvidAnalytics and extend the value offered to our buyer customers,” he said.
How digital payments can benefit the mid-market
As the middle market remains bullish on its continued growth in 2023, many mid-market businesses are cognizant of the need to invest in technology shaping the future, such as AP automation. The adoption of digital transactions in the middle market can be challenging, as many businesses are accustomed to using checks for payment and may be hesitant to switch to digital payment methods.
Finance teams typically incur payment fees when processing paper checks that are expensive to maintain in terms of personnel and supplies. On the supplier side, slow payment timelines that result from processing paper checks can negatively impact cash flow. These cons make the case for why digital tools and transactions can help middle-market businesses make day-to-day operations more efficient.

Switching to a paperless system can help reduce the time and errors associated with handling AP paperwork. Furthermore, with increasing automation, businesses are likely better positioned for growth without increasing headcounts, according to Dincaslan.
Digital transactions can improve cash flow for suppliers by incorporating visibility, security, and cost-effectiveness into their payment journeys – however, to stay ahead of the competition, companies need to implement a system of real-time payment analytics in order to provide customizable services.
“Access to data in real-time is essential for any organization in today’s middle market, and products like AvidAnalytics are designed to provide real-time insights to businesses to better manage their expenses and cash flow – therefore, facilitating digital transaction adoption cycles,” said Dincaslan.