American consumers are increasingly making payments electronically while their checkbooks gather dust. So why are businesses so behind their customers?
A startup called Bill.com is the brainchild of former Intuit employee René Lacerte. The company has developed a cloud-based system to make it safe for businesses to adopt electronic payments. The company is announcing today that it has converted more than 40 percent of its customers from checks to Automated Clearing House (ACH), the electronic network for financial transactions in the U.S.
About 80 percent of American companies still rely on paper invoices and checks or manual reconciliation, according to a 2012 survey by The Accounts Payable Network. Why?
The ACH has been around for decades, but businesses haven’t utilized it due to its complexity. Bill.com has been working to automate the process for small businesses so they can advantage of ACH and cut down on processing costs.
The company claims its average customer has saved 106 hours and $1,392.10 per month. And it’s not just helping customers pay bills — Bill.com also helps customers process online invoices and manage sensitive financial documents. It also integrates with existing accounting software to analyze relevant data and provide a “cash forecast.”
“Scott Cook [Intuit's founder] used to say that the enemy is the paper and pencil — people doing this the old fashioned way,” said Lacerte, Bill.com’s CEO and founder in an interview.
Lacerte hopes the early adoption by SMBs is a sign of the company’s growth potential. Today, the company has 175,000 customers in its network, but it won’t disclose how many of them are paid. Bill.com makes its money by charging $.0.49 for each transaction.
Aside from paper mechanisms, Bill.com’s big competitors include accounting software systems like NetSuite.
Bill.com raised $15 million for its previous financing round. At that time, August Capital’s David Hornik made the bold claim that the company “moves more money than Square each month.”
Top image via Bill.com