Today I’m going to re-visit the SMB market, which I’ve talk about before here. This segment of the market presents an extraordinary opportunity to relieve SMB’s of their paper-based (or excel-based) manual processes of getting paid, making payments and managing cash and introduce them to cloud-based automation that is affordable and built for them.
We talk a lot about AP automation for large corporations that process anywhere from 10,000 to 100,000 invoices a month or more and in these cases there is no question that automation makes sense (and there are plenty of solution providers serving this market). But what about the small business that have to make (and/or receive) 50 to 100 payments a month? For the most part, they are still using excel and paper processes to keep tabs on payables and receivables, they may have an accounting system such as Quickbooks or Sage and a bank account, however, none of these are linked together or share data/information easily. All in all, for SMB’s it takes a lot of manual, tedious work to get decent visibility into cash flows but without some level of automation (that is affordable) getting a real-time holistic view into cash inflows and outflows and being able to proactively manage AP and AR processes with ease is near impossible. This is why I think solutions such as Bill.com are well positioned to add significant value to the SMB market and more specifically to help owners/managers manage their businesses in a simpler and smarter way.
Last week, I was briefed by Bill.com and had a chance to speak with the founder and CEO, René Lacerte, I also received a demo of the solution from his team. Rene has a wealth of experience in this market having worked at Intuit for 5 years managing the bill pay and bill presentment products. After which, he co-founded PayCycle (online payroll service), which was acquired by Intuit in 2009. Rene founded Bill.com in 2006, it is a cloud-based solution that provides small businesses one place to make payments, get paid and manage cash flow while also offering document management and integration to accounting software (including Quickbooks, Sage, Netsuite and more). The company’s ‘sweet spot’ are those that make/receive anywhere from 20 to 500 payments a month.
Most of Bill.com’s clients began by using the payables solution as it was the first to be launched in 2008, the receivables portion was launched in January 2011 and finally the cash flow forecaster just launched over the last few months. The aim is to provide one place for SMB’s to manage all of these aspects of their business. Below is a summarized description of what Bill.com enables its customers to do.
Payables – Knowing that a large majority of SMB’s still receive paper invoices, Bill.com allows its clients to get this paper into the system in various ways, by either taking a picture, sending via email (if PDF or scanned) or faxing to a dedicated number. If a customer’s supplier is already on Bill.com, they would be able to submit an eInvoice. In any case, invoices only have to be entered once into the system, which then syncs with the accounting system.
When it comes to the approval process, the solution displays any relevant information that will be helpful to the approver. For example, details on if that bill has been paid before or if there is a contract (can be uploaded using the document management capability) also memos or notes from previous approvers are displayed. The user also has the ability to add additional approvers and multiple pages of attachments.
Lastly on the AP side is making the payment, users can make payments using ACH, credit cards or any number of bank accounts. Users can also pay be check, bill.com writes those on their own holding account and have a positive pay system, that way clients are not exposed in any way. If a specific person must be paid, the user can invite them to join bill.com for free and they will be able to receive payments electronically.
Receivables – On the flip side, invoices can be created within Bill.com or in the accounting system (which then syncs with Bill.com) and once created they can be submitted electronically, via email or via US postal mail (i.e., it gets printed and mailed out). Payments can be received by credit card, registering a bank account or by PayPal. When the invoice is received by the customer, there is an email notification and a PDF of the invoice attached and, if a paper invoice was received, it will have a QR code that when scanned will launch the user into a branded portal where they can register and make a payment (much like paying a cable bill online)
Cash Management – Having up-to-date data on payables and receivables’ within one automated system gives SMB’s the ability to proactively manage their cash flow. Bill.com’s innovative cash forecaster displays all cash inflows and outflows for a given period of time using an interactive chart. This allows businesses to visually see their cash flow and take immediate action to rectify any problem areas. For example, if in a particular month outflows are more than inflows the user can see which vendor payments should be delayed and immediately make a change which is then reflected in the cash position.
The above is a brief summary of the capabilities available to SMB’s via the Bill.com solution; there are other features that are available (for example, being able to do all of the above via a mobile phone or tablet). For me it is clear that solutions like Bill.com are here to stay and that SMB’s will begin using and benefiting from these solutions more and more. Through such solutions SMB’s have more control and visibility over their finances enabling them to focus more on the products and services that they offer and putting them in a position to run their businesses in a smarter way.
