Digits, a bookkeeping platform, has acquired Basis Finance, a budgeting and forecasting startup. The acquisition aims to enhance Digits’ financial planning and analysis capabilities and extend its dashboard and reporting functionalities. This move is seen as crucial by many founders due to rising interest rates and a tightening fundraising environment in 2024. Basis Finance will integrate its advanced scenario comparison tools and budgeting capabilities into Digits, allowing companies to create budgets and forecasts without extensive manual input.
Earlier reports on Digits highlighted its innovative approach to bookkeeping by integrating real-time data and machine learning for streamlined financial management. Similarly, Basis Finance has been recognized for its user-friendly budgeting tools that eliminate the need for cumbersome spreadsheets. Both companies have been influential in their respective domains, with Digits focusing on delivering clean financial data and Basis helping firms with efficient financial planning.
Through this acquisition, Digits seeks to accelerate its FP&A roadmap and enhance its financial planning capabilities. Basis Finance’s co-founders, Bebe Kim and Carlos Gil, along with their team, will continue to work with Digits, ensuring a seamless integration of both companies’ technologies and expertise.
Importance of Automation
The move comes as many small and medium-sized businesses struggle with manual accounts receivable (AR) and accounts payable (AP) processes. While over 60% of firms have initiated some level of AR/AP automation, only a small fraction have achieved full automation, leaving many still reliant on manual and paper-based methods. Automation of these processes is increasingly seen as essential, especially with a significant rise in invoice volumes anticipated over the next few years.
Benefits of Automated Financial Processes
Research indicates that companies with fully automated AP/AR systems experience numerous benefits, such as improved cash flow management, increased efficiency, and enhanced data visibility and insights. These advantages are crucial as businesses aim to manage growing volumes of financial transactions more effectively.
Digits’ CEO, Jeff Seibert, emphasized the importance of clean financial data and well-built financials in running a successful budgeting and planning process. The integration of Basis Finance’s tools is expected to boost Digits’ ability to support forward-looking decision-making for its clients.
Key Takeaways
– Digits’ acquisition of Basis Finance aims to enhance FP&A capabilities.
– Many firms still struggle with manual AR/AP processes, highlighting the need for automation.
– Automated financial processes lead to better cash flow management and efficiency.
Automation in financial processes is no longer a luxury but a necessity, particularly for small and medium-sized businesses. The merger between Digits and Basis Finance represents a strategic effort to provide comprehensive financial planning tools and improve the overall efficiency of financial operations. As companies anticipate increases in transaction volumes, the ability to automate and streamline processes will be a significant competitive advantage. This acquisition not only strengthens Digits’ position in the market but also sets a precedent for the importance of integrating advanced financial technologies to support business growth and sustainability.
