Business technology company Acumatica expanded its expense reporting capabilities as part of a broader wave of product updates this week, promising a lower-priced alternative to offerings from SAP Concur, the travel and expense management powerhouse based a short drive away in Bellevue, Wash.
New features in Acumatica’s 2020 “R2” update include the ability to incorporate electronic banking feeds for corporate credit cards, further automating the process of expense reporting. Acumatica is also offering automation and machine learning technologies to help companies collect information from receipts and remind employees to submit copies of them.
Jon Roskill, Acumatica’s CEO, said he believes the new features in the company’s Advanced Expense Management offering put Acumatica on par with Concur’s core expense management application. The update should give its existing customers who also use Concur reason to reconsider that expense, he said.
“At some level, we’re targeting Concur with it, but it’s really for the overlap of people who have Acumatica and have Concur, and that’s hundreds of customers,” he said.
In a news release, Acumatica said it offered an advantage over “costly user-based licensing fees from solutions such as Concur and Abacus.”
Responding to GeekWire’s inquiry, Concur declined to comment on Acumatica’s statements but noted that its solutions are available not based on user-based licensing but rather on a per-transaction basis, with a lower transaction price at a higher level of commitment per billing cycle. Roskill said there are still user-based fees depending on the SAP solution that Concur users choose. But regardless, he said, Acumatica’s lower-priced consumption-based licensing means the cost of its expense reporting will be considerably less.
Concur was started in the Seattle region in 1993 and acquired by enterprise technology giant SAP in 2014 for more than $8 billion. SAP’s Concur segment generated revenue of 807 million euros, or US$954 (up 5%), in the first half of 2020, representing about 6% of SAP’s 13.2 billion euros in revenue for the period. Concur’s profit was 297 million euros, or US$351 million (up 3%), for the first half of the year.
Travel and expense management reporting software was an estimated $7 billion global market as of 2019.
Expense management is an especially hot topic in corporate finance departments right now. The COVID-19 pandemic has led companies to put new emphasis on expense management, with a focus on finding areas for cost savings, according to a new report from Center, another expense management tech company based in Bellevue, with former Concur CEO Steve Singh as one of its co-founders.
In Center’s survey of more than 200 U.S.-based finance professionals, more than 91% of respondents said they plan to invest in at least one tech initiative in the coming year due financial and workforce issues stemming from COVID-19.
Beyond expense management, Acumatica’s larger goal is to boost the value and stickiness of its cloud-based enterprise resource planning (ERP) software, which includes expense reporting as part of a broader set of features. Gartner put the overall global ERP software market at $39 billion as of 2019.
Acumatica actually doesn’t find itself competing against SAP for business in North America very often, Roskill said, citing Oracle Netsuite as the competitor it goes up against more frequently. One way Acumatica seeks to differentiate itself is by leveraging artificial intelligence and machine learning technology from major cloud providers including Amazon, Microsoft and Google.
Roskill said he believes that gives Acumatica an edge over larger rivals who believe, incorrectly in his view, that their internally developed AI/ML features are superior.
New machine learning capabilities in Acumatica’s cloud-based ERP software include a service for automatically importing data from invoices and related documents, using machine learning to read fields from a variety of document types, aiming to streamline the processing of accounts payable. The system gets smarter over time, learning from manual corrections of imported data.
A report by IDC in July cited Acumatica’s AI and ML capabilities among the company’s advantages but pointed to brand awareness and globalization as challenges.
“Acumatica must add more functionality to support the growing number of small and midmarket organizations with complex multi-entity, multiunit, and multicountry operations,” IDC said, noting that its discussions with the company “revealed that further multicompany consolidation is on the near-term product road map.”
Acumatica, founded in 2008, was acquired last year by private equity fund EQT Partners, which holds an 82% stake in the company. Roskill, who previously led Microsoft’s worldwide partner organization, joined Acumatica as CEO in 2014. Earlier this year, Acumatica used capital from EQT to acquire one of its longtime partners, JAAS Systems, bringing Acumatica’s headcount to about 350 people.
The company doesn’t disclose detailed financial results, but Roskill said this week that revenue grew in the mid-40% range in the first quarter, as the pandemic hit, which was below its targets, and then saw a big uptick in the second quarter, starting in April, as economic incentives including the Payroll Protection Program kicked in for some of its customers.
Then business “exploded,” he said. Acumatica posted 70% growth in the second quarter of 2020 compared with the prior year, he said, as the new realities of remote work made digital initiatives a requirement for companies, not just an option.
Updated after publication with details from Center’s expense management survey.
