Billtrust, a provider of automated invoicing and statement systems for small and medium-sized businesses, is one of the fastest growing companies around.
In the last three years it supplemented its operations by acquiring three other businesses, opened operations centers across the country, and expanded into a new corporate headquarters at American Metro Center.
Last year marked the company’s fifth consecutive appearance on Inc. magazine’s 500/5000 list of fastest growing private companies in the country.
Since 2007, the company has grown from 22 to 110 employees, precipitating a move into new corporate offices at 100 American Metro Boulevard in Hamilton.
“The new Hamilton location provides our organization with a great footprint for future growth,” says Flint Lane, president and CEO of Billtrust. “Hamilton is well situated for our North American customers and prospects to visit. Importantly, the new office has improved our recruiting efforts to support our expansion.”
The company will have eight operation centers nationwide to print, fold, and mail the bills in order to expedite bill delivery and payment. These locations, including a newly-opened center on South Gold Drive in Hamilton, are selected based on their ability to support customers by reducing their mail times.
Offering an example, Lane says, “For our nationwide billers, we might transmit bills electronically to our Sacramento facility to be mailed, so that the bills would get there faster and be paid faster.”
In the last five years, Billtrust has transformed itself from a product company to one that offers complete billing solutions.
Over the same period it moved from dependence on venture capital to being solidly profitable, maintaining a growth rate of 50 percent a year, and a customer base of 800 that has quadrupled since 2007. Revenues for the company were between $30 million and $40 million in 2011.
To fuel this rapid expansion, the company is strategically acquiring print-and-mail companies and then helping their customers migrate to electronic billing.
Billtrust was founded in 2001 as Factor Systems, which is still the legal name of the company. In the three years following the influx of $4 million in capital from the Edison Venture Fund in 2006, the company “purposely” lost money as it invested in growing the business.
Three years ago Billtrust bought Statement Services of Tampa, Florida, which focused on the country club industry. Then in September, 2011, it acquired Invoice Connection of Carlsbad, California, which had a niche in business-to-business billing for wholesale distribution concerns like electrical and plumbing suppliers.
Billtrust’s third acquisition, announced on January 17, is Mark Altman & Associates of Hudson, Massachusetts. Lane, expects this merger to accelerate Billtrust’s growth in the municipality market.
“The company does municipality billing, for local towns and governments, areas where we were not strong,” says Lane. “It gives us a jumpstart on a new industry that will allow us to grow even faster.”
Billtrust has already begun to transition customers of Mark Altman & Associates to the Billtrust infrastructure. Mark Altman is now group president at Billtrust, with responsibility for the municipality group; and his company’s print and mail facility will become the eighth operating facility in Billtrust’s nationwide network. Although in the past Altman’s company was focused in the New England area, it will now be seeking customers across the country.
Lane says that the acquisition was Billtrust’s biggest so far. “It provides a strong foundation for further expansion into the municipality market. The combination of Mark Altman & Associates’ expertise with Billtrust’s advanced billing technology platform provides a significant competitive advantage for further growth throughout the United States.”
Bringing new companies on board can be challenging. “It is definitely hard to get companies integrated, and it is a lot of work to get all the processes working, human resources, payroll, etc., and all the bills integrated,” says Lane. “It is our belief that we will get better able to do it and will do more over time.” He expects a significant consolidation in this industry over the next few years.
Billtrust’s growth is not entirely through acquisition. “We also sign 100 new customers a year through our sales people,” says Lane. The company has 10 salespeople who are seeking new customers throughout the country in vertical industries such as wholesale distribution, manufacturing, newspapers, telecom, waste management, and now municipality billing. Billtrust is currently trying to hire additional salespeople.
Although the move to electronic billing has become almost a foregone conclusion, says Lane, the general populace is not necessarily ready to make that switch and give up paper bills. “All of our customers would prefer that everybody do things electronically,” Lane says, “but it is a battle to get them to do so.”
The unwillingness of customers to surrender paper bills can be very costly for billers, suggests Lane, because a biller’s biggest expense is sending out a paper bill and paying the postage related to it; the cost is about $1 for sending out each bill and receiving payment back.
Billtrust used to leave the challenge of convincing customers to go electronic up to its clients, but now it helps them out. The problem in transitioning people to electronic billing is simply that companies haven’t made such a move compelling enough, suggests Lane.
To help its customers drive people from print to electronic bills, Billtrust advises them on how to formulate compelling promotions. The most effective marketing channel for encouraging this change is the paper bill itself.
A client may try something as simple as including a glossy sheet that says, “Sign up for electronic billing and save a tree.” Or, a somewhat more costly but much more effective approach may offer a $5 Dunkin’ Donuts gift certificate or a chance to participate in a contest to win an iPad. Lane has found that during the first year of such an effort about 25 percent of customers will move to electronic billing and then 20 to 25 percent of customers will move each year the marketing effort continues.
Billtrust’s customers typically save anywhere between 20 to 35 percent on their bill delivery costs. However, the value goes much deeper as an optimized billing process helps them get paid faster and improves customer satisfaction, Lane says.
He adds that Billtrust is less a product company now and more strategic. “The problem many businesses face with their accounts receivable process is they do not recognize the strategic role billing plays in what we like to call the three C’s: cost savings, cash flow, and customer satisfaction. We provide our customers with an advanced technology platform and expertise to bring efficiency to the accounts receivable process. Billtrust has taken the migration to electronic delivery seriously and has dedicated resources to help customers create strategic programs for eBilling.”
Lane says that Billtrust has built a flexible technology platform that enables the company to make its services economically feasible to a wide range of customers. “Some of our customers include small businesses that might be doing a few thousand bills a month, while other larger companies are sending millions of bills each month. Our customers range from an electrical distributor with a couple of branches to Fortune 500 companies like Kraft Foods, CDW LLC, and New Balance.”
Each new Billtrust customer must go through an implementation process, and each time Billtrust purchases a new company, it must take all of that company’s clients through this process. At first billing will continue the way it was previously done.
Once Billtrust completes the design of new bills and the creation of online billing sites where payments can be made either with a credit card or via direct online payments from a customer’s bank, new customers are migrated to the Billtrust platform, which can offer them better services.
In Billtrust’s system everything that can be automated is automated, and Billtrust uses sophisticated bar codes to drive this process. To get a bill out the door, Billtrust needs to receive a billing file from its customer specifying the type of billing preferred by each client.
Billtrust stores this information in a database; cleans up the addresses so the post office will accept them; and generates PDF copies of the bills. Then it delivers the bills, either to the post office or electronically via e-mail, a fax, or a website. All of Billtrust’s customers have access to CustomerCare, a web-based archive and retrieval product that enables clients to manage billing and track processing in real time.
Lane graduated in 1988 from Rensselaer Polytechnic Institute with a bachelor of science in computer science. He and his wife have four children, and he volunteers as a big brother for Big Brothers Big Sisters of Mercer County and assists his local PTA with web projects.
Lane worked for Andersen Consulting and Brownstone Solutions before working for a Princeton start-up, Logic Works, in 1995. Lane, Ed McLaughlin, and some of the others at LogicWorks started Secure Electronic Services (doing business as Paytrust) in 1998. Paytrust scanned paper bills and put them online. Lane managed the acquisition of a potential competitor, PayMyBills.com, before he left in 2001. Paytrust was bought by Metavante and moved out of Princeton.
Commenting on the future, Lane says, “Billtrust has created an entrepreneurial, innovative culture to drive accelerated growth over the next five years. We are hiring aggressively within New Jersey and are continuing to expand our team to support expansion.”
Billtrust, 100 American Metro Boulevard, Suite 150, Hamilton 08619; 609-235-1010; fax, 609-235-1011. Flint Lane, president & CEO. www.billtrust.com.