expands into new fields

Accounting CEO René Lacerte has been growing his company with recent acquisitions that have been adding spend management and accounts receivable capabilities, with more deals perhaps on the way.

He founded as an online billing technology provider for small businesses in 2006 after co-founding and leading the payroll company PayCycle for over six years. Last May, the San Jose, California-based company acquired Divvy, a spend management software company, for $2.5 billion. Then in July, acquired Invoice2go, an accounts receivable software provider for small businesses, for approximately $625 million. But his roots in the accounting field go back several generations, with two grandmothers who were both accountants.

“Growing up with parents and grandparents that were in the accounting and data processing business, it’s just something that’s been super important to me, to deliver solutions that really support the accounting community,” he said. “That’s something we’ve been doing from the beginning.”

He sees the recent acquisitions as a way to provide more services for the company’s small business customers and their accountants. “Managing the back office is a necessary step of any business, but it’s not something that actually is why anybody gets into business,” said Lacerte. “When accounting firms get into providing strategic advisory services, they need tools to be able to do that because they don’t have the time to be able to collect all that information, driving around town, picking up paper, looking for sticky notes, finding and tracking down that one piece of paper that doesn’t exist. That goes away when you have So our intention, our purpose and our thoughtfulness behind supporting the accounting community hasn’t changed.” CEO René Lacerte

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The acquisition of Divvy fit in with’s existing capabilities in accounts receivable and payable. “As we continue to help accountants manage all of the payables and receivables operations that they have, one of the things we learned about was that spend management is a new category,” said Lacerte. “The ability to manage your spend on credit cards via an app is relatively new. That category is probably three to four years old and it’s growing fast. We realized the opportunity to combine that with the spend that we have was really powerful.”

Divvy helps the company build on its ability to help businesses manage their credit card spending and employee expenses. “We have over 126,000 businesses that use,” said Lacerte. “When you look at customers that are on it, the vast majority, 75% or more, of the spend that goes out the door is non-payroll, and the remaining spend that isn’t going out is probably on card. So our ability to help businesses manage their card spend, whether that is going to be expense management or spend management, was super important to us. That’s why we did the acquisition with Divvy, to provide a new tool and a new capability for accountants to be able to support their clients with spend management so that they could actually control spend on the fly.”

Invoice2Go helps add more invoicing features. “The reason we did the acquisition on Invoice2Go was we know there’s lots of opportunity on invoicing,” said Lacerte. “If you just look at our payables, well north of 60% of the payments we make for our customers are electronic. And if you just look at the industry in general, I would say probably over 90% of the payments are still going via check on AR. There’s lots of room to improve there. Invoice2Go has a lot of great capabilities to enhance the receivables experience, to engage with customers, and we wanted that capability.” is a publicly traded company and is going through a quiet period before it issues its earnings report in early February, so Lacerte couldn’t discuss any acquisitions in the near future. But he described his general strategy. “What we’ve said in the past is that the areas of financial operations that we think are interesting, that need more automation, are areas like spend management, expense management, working capital, AR, and even payroll and HR solutions,” said Lacerte. “Those are the things that we think could use more innovation, and that’s what we’ve said consistently over the last few earnings calls.”

In addition to accountants, has also been working with bookkeepers. The company recently released the third installment of its State of Bookkeeping Practices Survey, Bookkeeping Rebooted, polling nearly 600 accountants and bookkeepers about their experiences during the pandemic. The research found that the top three challenges facing their clients are keeping businesses open (30%), increasing costs (27%), employee recruitment and retention (17%). Nearly half (44%) of bookkeepers said they are closing the books faster for clients than they did prior to COVID-19, and 84% expect a revenue increase this year, with 37% forecasting significant revenue increases. Some 69% of the survey respondents plan to add to their teams despite staff shortages. One-third (34%) of the respondents believe there will be more remote work in the future, resulting in the need to hire, retain and upskill staff with more technology-driven offerings, training and nontraditional roles. While 80% of the respondents who expect high growth have already experienced strong digital adoption, 40% of the bookkeepers polled are still printing and mailing paper checks.

“One of the things that COVID has done for everybody is it’s proven the need to be able to work remotely, so we’ve all adapted,” said Lacerte.”But business still has a bunch of paper, and so that’s still the dominant form of payment. North of 80% of payments are made via paper. What I’m seeing from accountants is an increased urgency around helping that transition happen, that digital transformation, and making it stick.”

He cited examples of some of the accounting firms works with, including UHY, based in Farmington Hills, Michigan. “Their goal is to double their entire business in the next few years, and CAS — client advisory services — is going to be a leading part of it,” said Lacerte. “It starts with having all the information. You cannot provide strategic advice unless you actually have the underlying information. You have to understand the details of the business, but you don’t want to spend the time to collect it.”

Another firm that works with is Ketel Thorstenson, a firm based in Rapid City, South Dakota. “With COVID, they realized they needed to jump on and really support their clients,” said Lacerte. “They were able to add 100 clients immediately onto the platform in less than a month. They have 30 staff accountants that are paying the bills manually, each with a different process that prevented them from scaling. With, they were able to put 100 clients on within the first month.”

Another firm, KWC CPA, based in Alexandria, Virginia, also has been using “They’ve talked about how much it changes the amount of work that they’re doing and the ability to offer strategic services,” said Lacerte. “What we’re seeing is that the digitization of the back office allows things to be simpler, including for an accounting and audit firm, which is super important.”

As businesses support more peer-to-peer payment systems used by consumers like Venmo, Zelle, PayPal and the Cash App, and cryptocurrency like Bitcoin and Ether, the accounting technology will need to keep up. “Whether it’s a card payment, whether it’s an instant transfer, whether it’s a payment, that’s something that’s going to continue to really be supportive of this digital transformation,” said Lacerte. “The easier you can make all the steps that businesses do, the more likely you’re able to succeed.”

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