Cloud accounting vendors have long articulated a value proposition that, in part, talks of giving businesses a deep insight into their cash flow so they can make well informed plans for their short and mid-term financial future. The reality however is that accounting applications are by nature backwards looking and focus primarily on reporting of prior transactions – this focus does little to deliver on future insights. It is for this reason that vendors exist in the revenue management and cash flow forecasting space – they’re able to focus on forward looking rather than historical events.
One of the longest running of these vendors is bill.com,a vendor that sells itself as a cash flow command and control system. Bill.com is all about wrapping process and lifecycle around accounts payable and receivable – that offer online bill pay, custom invoicing services, unlimited document storage and revenue lifecycle collaboration tools (think approvals, enquiries etc). Bill has been quietly partnering far and wide and is now integrated into a number of accounting solutions as well as chasing banks as a channel – Bill.com is integrated into a number of banking platforms, a natural fit since the bank account holds the single record of truth for most businesses.
Bill.com is upping the ante and today releasing a new cash management feature that aims to deliver a more fluid method of cash flow management than what SMBs are used to. It does so by closing the loop between user’s banks, books and business itself, and in doing so to move away from disconnected and reactionary spreadsheet-based cash flow tools to move to a connected, proactive and real-time paradigm. The idea is to give businesses a real time view of their cash forecast and to enable actions to be taken in response to cash positions – things like allowing early payment discounts to be populated as a response to a cash flow hole for example. Some of the deeper functionality speaks to this closed-loop approach, with the new functionality, users gain the ability to drill down into invoices, bills, contracts and notes while forecasting cash. They can move items in and out to account for “what if” scenarios to help with their planning and reacting to their own cash situation.
I put it to Bill.com that this functionality is something that ideally would be native to a business’ accounting system and that by utilizing a discrete application there was both a barrier to adoption and a jarring from inconsistent UIs. Bill.com CEO Rene Lacerte disagreed, his perspective is that accounting vendors will continue to focus on compliance and a historical focus on transactions, leaving the space wide open for those looking at a more future focused vision. Interestingly a company I was an adviser to, billFLO had this vision, it didn’t really manage to translate a fantastic idea into a compelling business. The fact that Bill.com has been around for six years or so now indicates they’re doing something right, but at the same time it’s telling that no one has really broken out in this space yet – maybe businesses are to busy looking at today to think about tomorrow….