Taking smaller companies beyond the paper-and-pencil form of bookkeeping, Bill.com is a software-as-a-service solution that automates accounts payable, check writing, and business document filing. Its founder, René Lacerte, discusses how small and midsize businesses can harness control of their cash flow.
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: Right now, business owners face challenging economic times. What's early 2009 going to look like for small and midsize businesses?
René Lacerte: I don't know. However, my opinion is that people took some heavy medicine in October. The country took a huge dose, and the pendulum swung too far in the opposite direction. There's going to be some period of flat growth for the economy as a whole, and there are conflicting reports about the faults -- housing, commercial credit, etc. The result is that people are being very cautious; everyone is sitting on their hands waiting and not being aggressive about new business.
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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.
bMighty: Do you see opportunity?
Lacerte: You have to find the silver lining in every cloud if you're an entrepreneur. There's a lining in a downturn. People have to reposition. Historically, the second half of a recession sees tremendous acceleration in business openings. The people who get laid off want to work; they get tired of looking and start their own companies. The other opportunity is with the businesses that make it through the next 18 months. The survivors are the ones who will come out stronger, but business owners need to do whatever it takes to survive.
Next Page: How Bill.com Can Benefit Businesses
