AvidXchange Stock: A B2B Payments Pure-Play

They say that the difference between an accountant and a lawyer is that the accountant knows they’re boring. It takes a certain type of person to finish a managerial accounting class and conclude that T-accounts are their life’s calling. As uninspiring as accounting might be, it’s a critically important part of every business out there which uses some form of software to balance their books (we use Xero).

When you operate a business, you’ll owe other businesses money. That money owed exists on your balance sheet under “accounts payable,” while the money businesses owe you is called “accounts receivable.” It goes without saying that companies will try to avoid paying debts for as long as possible, and conversely, will prefer to be paid money they’re owed as quickly as possible. (More on this in a bit.) While consumers have moved beyond paper checks, businesses haven’t. Incredibly, paper checks still comprise 42% of all business-to–business (B2B) payments in the United States. It’s an opportunity that’s ripe for disruption as business owners look to improve margins during good times and bad.

We estimate the total cost of processing a paper invoice is approximately $19.00 across the paper invoice and paper check payment. We believe that automating these processes reduces that cost by over 60%, while also improving the accuracy of reporting and reconciliation.

AvidXchange

Getting rid of paper checks is where a firm called AvidXchange Holdings Inc. (