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Managing cash flow is always important, but in these recessionary times, managing it well can be the difference between survival and failure. The advent of software as a service (SaaS) has brought small and midsize businesses powerful new tools for managing financials. Among these is Bill.com, a Web-based service that automates accounts payable, check writing, and business document filing. Company founder René Lacerte, who previously founded online payroll service PayCycle and spent five years at Intuit, spoke with bMighty about the challenges of the current economic crises, how to take control of cash flow, and the ways that SaaS is changing application development.
bMighty: As an entrepreneur, you have your own concerns about the current economic situation. What are you worried about right now?
Lacerte: We're a VC-backed company, which insulates us somewhat. Traditionally, small-business owners are tapping their home equity and credit cards right now. The rates are low, but credit is so tight. The equity on my house is cut in half, so while the rate is lower, I can't get as much cash as I could have before. In tight times like this, managing cash flow and managing bills are more important than ever. We see people who are anxious to get their money. One thing we are seeing is more aggressive invoicing -- we had a recruiter send us a bogus invoice trying to get payment. It's a vicious cycle; it only takes a few people getting stiffed before orders start canceling. One of the things about this downturn is how quickly it happened; it caught even people with good balance sheets off guard.
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