The existing options are horrible. They charge a lot, spend an effort of maybe 5 minutes per customer, and will not handle complicated cases. The debt collection is even worse.
As far as what a more resourceful and powerful startup can do: they can consolidate a database of uncooperative customers or maybe even the debts of different vendors which would make legal action more viable, handle cross-border issues, provide payment ratings (different from credit rating - pretty sure many AAA companies would think twice before delaying payments!), and generally will be taken more seriously than a small business.
Just a handful of ideas.
The idea that big companies would care about a payment rating misunderstands the relationship. When your startup has an opportunity to close a sale on a BigCo and you find they have a history of taking a few months to pay... what do you did with that information? Insist on custom contract terms? Walk away?
I don't doubt that it's possible to create a startup that does something like Factoring and just does it really well (perhaps especially with better marketing). But that's true of any industry. I don't see any analogy to the Taxi/Uber disruption. It would fundamentally be the same thing.
Heh. Work less or hedge the bets.
I am saying it because I am familiar with the situation. A certain acronym company which may or may not be associated with the colour blue had a minor PoC gig and invited a bunch of contractors on loose terms. Many worked around the clock. Closer to the end of the project, it became apparent that there will be issues with the payment. Smarter guys bailed out.
Knowledge is power. There are always options. Kids in their twenties may be mesmerised by the power of known logos, then they learn that it's more about the figures.
I am wondering however about using AR to simulate the discovery of that horse's head in the bed...might work quite well to get quick payment.
Have you ever tried to get an invoice paid by an a*hole customer?
It's not exactly that. The post names it "Accounts Receivables as a Service". The idea is to make sure the invoice does not become a bad debt.
The willingness to pay small vendors and contractors varies across countries, industries, and cultures. Often, it involves a ridiculous amount of haggling and bickering.
For a small business, it is a lot of pain and loss of productivity (let alone actual revenue in some cases).
It's not technically ambitious but definitely a real problem to be solved.