In the world of financial technology, acquisitions are always making waves. The recent news of bookkeeping platform Digits acquiring budgeting and forecasting startup Basis Finance is no exception. This strategic move comes at a crucial time for founders, as they navigate the challenges of rising interest rates and a tightening fundraising environment in 2024.
Digits emphasized the importance of extending runway for founders, and with the acquisition of Basis Finance, the company aims to accelerate its financial planning and analysis (FP&A) roadmap. By integrating Basis's expertise in creating and maintaining budgets and forecasts, Digits will enhance its dashboard and reporting capabilities, bringing valuable tools to the table for companies of all sizes.
Co-founders Bebe Kim and Carlos Gil, along with their team, will continue to collaborate with Digits following the acquisition. This partnership will provide users with access to clean financial data and expertly built financials, ultimately supporting forward-looking decision-making processes.
The timing of this acquisition is significant, particularly as small and medium-sized businesses (SMBs) grapple with manual systems for their accounts receivable (AR) and accounts payable (AP) processes. Research has shown that while more firms are initiating AR/AP automation, a surprising number still rely on manual and paper-based processes.
Automating AP/AR processes has proven to offer numerous benefits, including better cash flow management, increased efficiency, and improved data visibility. As the volume of invoices handled via AR systems is expected to increase in the coming years, automating accounting processes will be essential for effectively managing this growth.
Companies that have fully automated their AP/AR processes report more accurate and streamlined operations, as well as significant cost savings and growth opportunities. The future of financial technology looks bright, with automation playing a key role in driving efficiency and success for businesses across industries.