Small Businesses Looking to Do More With Less Turn to Payables Automation

In today’s softening economic environment, businesses need to focus on controlling what they can.

That’s according to René Lacerte, BILL CEO and founder, who said Thursday (Feb. 2) during his company’s first quarter earnings call that demand for digitizing back-office operations is only growing for those small and medium-sized businesses (SMBs) looking to navigate the economic uncertainties inherent to today’s macro and Main Street environments.

Cloud-based software tools that help automate back-offices for businesses by integrating traditionally siloed processes into all-in-one digital platforms are increasingly being leveraged by SMBs to remove common pain points and frictions arising from legacy paper-based and manual systems.

A quick look at BILL’s own four-year compound annual growth rate (CAGR) of 79% shows that automated payment solutions are booming.

“Our solutions are helping more than 400,000 businesses manage their financial operations, empowering them with more control and cash flow visibility while giving them more time to run their businesses. With our platform, ecosystem and scale, we are well positioned to help millions of SMBs automate their financial back office,” said Lacerte.

All SMBs have a need for back-office efficiency, and the enormous hurdles faced by businesses over the past few years have only highlighted the benefits automated tools provide in helping organizations realize key operational efficiencies in challenging times.

“The digital transformation is happening, this is not elective software,” Lacerte added.

Driving Value in a Soft Economy

Even in the best of times, finance and accounting leaders shouldn’t be spending their time on lengthy and costly manual reconciliations, much less during what is widely considered to be an economic downturn.

BILL told investors on the earnings call that the company views its number one competitor as being “pen and paper,” and said that it sees helping businesses manage and modernize their operations in a “way that’s never been done before” as a continually attractive white space opportunity.

“We continue to see the trend of our customers moderating their absolute spend due to macro factors, but there is a very high rate of recurring transactions between buyer and supplier,” Lacerte said.

The BILL CEO added that, “In an inflationary world, choosing our platform acts as a deflationary force. In today’s climate, businesses are looking for ways to do more with less, and our end-to-end payment visibility helps teams creatively and quickly solve pain points … in some cases even helping finance teams save two days out of every workweek.”

This past August, PYMNTS singled out BILL as an example of how the automated billing trend marched on even as the pandemic shifted, and the company’s senior leadership indicated during 2023’s first quarter earnings call that they continue to see healthy demand from SMBs leveraging BILL’s platform as a critical way to manage their business despite a challenging near-term macro environment.

“SMBs are always looking to operate more efficiently, across both up and down economic cycles,” Lacerte said.

PYMNTS research in the “AP/AR Quick Start Guide” finds that accounts payable (AP) and accounts receivable (AR) headaches are so painful that two-thirds of SMBs interested in single platform for payables and receivables would be willing to pay up to 1% per transaction just for relief.

Payment Digitization Feeds Actionable Insights

BILL’s original name was Cash View, as Lacerte told investors on the earnings call, going on to emphasize that by pulling disparate tools together into one single view for operational optimization, SMBs are able to create more value and drive more efficiency.

As previously reported by PYMNTS, BILL recently acquired SMB financial planning company Finmark as a way to expand BILL’s own SMB planning and cash flow analytics capabilities.

“With Finmark’s financial planning software and integrations, combined with our platform and data, we’ll be able to offer SMBs more comprehensive, real-time insight into their cash flow and help them plan for the future,” Irana Wasti, BILL’s chief product officer, said at the time.

By empowering SMBs with less paper and giving them more control and operational transparency, automated tools that feed financial data back to digital dashboards can give back finance and accounting teams both more time for their mission and more time for customers.

In an economic landscape buffeted by shifting macro headwinds, this may be more important than ever.