The stream of receivables and payables determines healthy cash flow, but for many businesses, getting a clear, up-to-date picture of cash flow is next to impossible. Bill.com CEO Rene Lacerte believes that as business bill payment gets more digital, there’s opportunity to provide dashboards that aid cash-flow management. “We’re finding more demand from businesses around a joint vision of combining payments and receivables into a single cash view,” says Lacerte.
Bill.com is using part of a new investment to expand its ability to place both incoming payments and outgoing bills into a single online command center. The Palo Alto, Ca.-based accounts payable and receivable management firm just received $15.5 million in a Series D round from Financial Partners Fund, a unit of Citi Capital Advisors. Other participants included DCM, Emergence Capital partners, August Capital, Jafco Venture and Total Technology Ventures.
Bill.com recently finished work on new receivables functionality, which has doubled the business processes within the Bill.com platform. The receivables function — which can be integrated with accounting and payment systems such as QuickBooks online, Intacct, NetSuite, and PayPal Business — allows users to send invoices and receive electronic payments. This information can be accessed by Bill.com’s command center, which also includes the business’ own pending and paid bills — enabling a dashboard view of incoming and outgoing funds.
“In the past this has been managed with Excel spreadsheets. The decisions you have to make are around stretching out cash flow — who do you pay now and who do you pay later based on cash you have coming in,” Lacerte says.
Bill.com, which has now raised about $40 million in total venture capital, will use its new funding to scale for greater volume in automated business payments that the firm believes will result from declines in traditional mail billing due to postal downsizing. It will also invest in client acquisition strategies to expand partnerships with business clients and financial institutions. The command center itself will also be upgraded to improver user experience through greater on screen visual representation of billing relationships.
“If you get a bill from your lawyer, for example, how do you figure out if you just paid him or not? Under most prevailing [cash flow management] processes, you would log into your online bank account or look through a filing cabinet to find a cleared check. We want businesses to be able to easily see this information on screen, along with other billing relationships,” Lacerte says.
Bill.com, which charges $19.99 per month for payables services and $24.99 per month for both payables and receivables, faces competition on the automated invoice delivery front from PaySimple, Fiserv, FIS and other companies that provide digital payments technology; as well as document management firms. Another startup, two-year-old Taulia, has raised about $12 million in venture capital and offers a mix of accounts payable and treasury management solutions for digital billing.
PaySimple spokeswoman Sarah Jordan said the firm enables small businesses to offer their customers a variety of payment options, such as click-to-pay invoicing, phone and mail processing, and recurring billing, web and mobile payments. It also provides small businesses with merchant accounts so they can accept both credit card and ACH payments.
Jordan cited recent internal research that found that 80 percent of small businesses reported receiving late payments, with 49 percent reporting it’s a problem on a monthly basis, and 40 percent reporting an overall slowdown in receivables. In an attempt to mitigate that problem, Jordan said PaySimple allows businesses to keep all receivables in a single system, and offers instruction on how to migrate payments to faster, automated channels.
Mary Beth Lawson, vice president of product management for electronic payments, says Fiserv is currently working on an integrated accounts payable and accounts receivable product suite for small businesses.
“Small businesses need to have a comprehensive way to manage their finances so that they can concentrate on growing their businesses; however, today those tools either don’t exist or are difficult to use,” Lawson says.
The firm is combining its small business bill pay with an acquired CashEdge small business platform to offer a suite that will allow a small business to pay bills from billers and vendors, send electronic invoices to their customers and track all incoming and outgoing electronic payments.
“As we continue to iterate the product, we will also allow small businesses to take advantage of our electronic bill distribution network to distribute bills to consumers via the online banking service at the consumers’ financial institution. This means that consumers will be able to see their electronic bills from all businesses—large and small—in one comprehensive user experience allowing for increased adoption and usage that will benefit both consumers and the small businesses that serve them,” Lawson says.