Ramp vs. Bill.com vs. Mercury: Comparing AP/AR Automation Tools for Startups

Efficiency and streamlined operations are important for the success of your startup. You can gain a competitive edge by automating your accounts payable (AP) and accounts receivable (AR) processes.

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To save valuable time, reduce errors, and improve cash flow management, you must leverage technology to handle these financial workflows. This will allow you to focus on growth and innovation.

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Here’s where AP/AR automation tools like Ramp, Bill.com, and Mercury come in.

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This Ramp vs. Bill.com vs. Mercury article will help you understand how these tools stack up against each other and which best fits your startup's unique needs.

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What is Ramp?

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Ramp is a financial technology company established to help businesses manage their expenses more efficiently and intelligently.

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Based in New York City, Ramp has quickly grown to become a key player in the fintech industry, especially in corporate expense management. The company has raised significant venture capital funding, which has led to rapid innovation and expansion of its product offerings.

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Features

Ramp offers a comprehensive set of features that streamline and optimize expense management for startups and growing businesses. These include:

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Corporate Cards

Ramp offers corporate cards that are integrated with its expense management platform. These cards come with customizable spend controls and real-time expense tracking, enabling businesses to manage and monitor their spending more effectively.

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Expense Management

The platform automates the capture and categorization of expenses, reducing the need for manual entry and minimizing errors. It includes features like receipt matching, automated expense reports, and spend analytics.

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Bill Payments

Ramp provides a bill payment feature that allows businesses to pay their vendors directly from the platform. It supports various payment methods, including ACH transfers and checks, making it easier to manage payables.

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Spend Controls

Users can set spending limits and approval workflows to ensure all expenditures align with company policies. This prevents overspending and unauthorized purchases.

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Integrations

Ramp integrates seamlessly with top accounting software like QuickBooks, Xero, and NetSuite. It also connects with other tools like Slack and Google Workspace, facilitating smooth data flow and enhanced productivity.

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Reporting and Analytics

The platform provides insights into spending patterns, cost-saving opportunities, and financial health. These help with strategic decision-making and financial planning.

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What is Ramp Used For?

Ramp targets startups, small to medium-sized enterprises (SMEs), and growing businesses that need a robust and scalable solution for managing expenses. The platform is beneficial for companies that want to:

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Automate Expense Reporting

Ramp's automation features reduce the administrative burden associated with manual expense reporting. This helps teams to focus on core business activities.

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Control Spending

Businesses that require stringent control over their spending will find Ramp's spend control features and approval workflows useful.

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Integrate Financial Tools

Companies already using accounting software and other financial tools can use Ramp's integration capabilities to create a seamless financial management ecosystem.

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Financial Insights

Startups and SMEs that want to gain deeper insights into their spending patterns and identify cost-saving opportunities will benefit from Ramp's advanced reporting and analytics tools.

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Pros

• Ramp reduces the manual effort required to monitor spending and provides up-to-date financial data.
• The platform helps businesses identify areas they can cut costs and optimize their budget.
• Users can set up personalized alerts and notifications to stay informed about transactions, approvals, and potential issues.
• Ramp supports multiple currencies, making it suitable for international businesses.

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Cons

• The delivery times for physical cards are longer than usual.
• Ramp mainly focuses on expense management and optimizing card expenditures. Although the company is branching out into AP automation and procurement, these features are still in their early stages and will require time to develop.
• Ramp is designed for small businesses and may not be the best fit for midmarket and large enterprises.
• The platform lacks robust support for tax compliance, currency management, and specialized supplier tools.

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What is Bill.com?

Bill.com was founded in 2006 by René Lacerte, an experienced entrepreneur with a background in financial management solutions.

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Bill.com has grown over the years, earning a reputation as a leader in the field of financial process automation. The company went public in December 2019.

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Bill.com's mission is to simplify and automate complex back-office financial operations for small and medium-sized businesses (SMBs), making it easier for them to manage their AP and AR processes.

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Features

Bill.com offers several features that streamline AP and AR processes for startups, including:

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Invoice Processing

Bill.com allows users to easily capture, approve, and pay invoices. It supports various methods of invoice entry, including email, upload, and manual input. The platform uses artificial intelligence to extract and validate invoice data, reducing manual entry and errors.

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Payment Scheduling and Execution

Users can schedule payments in advance and choose from multiple payment methods, including ACH, credit card, and international wire transfers. Bill.com ensures timely payments by sending reminders and automating recurring payments.

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Approval Workflows

The platform offers customizable approval workflows, allowing businesses to set up multi-level approval processes based on their organizational structure. This ensures that payments are reviewed and authorized by the appropriate personnel before execution.

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AR Automation

Bill.com automates the invoicing process by generating and sending professional invoices to customers. It tracks payment status and sends automated reminders to customers for overdue payments.

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Integration Capabilities

Bill.com integrates seamlessly with popular accounting software like QuickBooks, Xero, Sage Intacct, and NetSuite. It also connects with major banks and other financial institutions, thereby facilitating smooth data transfer and reconciliation.

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Reporting and Analytics

Bill.com offers robust reporting and analytics tools that provide insights into cash flow, payment status, and financial performance. Customizable reports help businesses make informed decisions and improve financial planning.

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What is Bill.com Used For?

Bill.com targets small and medium-sized businesses (SMBs) that want to streamline their financial operations. The platform is beneficial for startups with complex AP and AR processes, such as those in professional services, accounting firms, and nonprofits.

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Some of its use cases include:

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AP Management for Growing Businesses

Companies experiencing growth often face challenges in managing the increasing volume of invoices and payments. Bill.com automates these processes, ensuring efficiency and accuracy as the business grows.

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AR Automation for Improved Cash Flow

Businesses that rely heavily on timely customer payments can benefit from Bill.com's AR automation features. Such businesses can reduce late payments and improve cash flow by automating invoicing and payment reminders.

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Integration with Accounting Software

Bill.com offers seamless integration for businesses that use popular accounting software. This enhances the automatic synchronization of financial data, thereby reducing manual data entry and minimizing the risk of errors.

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Remote Work Capabilities

With its cloud-based platform, Bill.com supports remote work by allowing users to access financial data and manage AP/AR processes from anywhere. This is useful for businesses with distributed teams or those transitioning to remote work environments.

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Pros

• Bill.com excels in automating invoices and streamlining payment processes.
• Approval workflows are simple and efficient.
• The platform supports extensive international payment capabilities.

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Cons

• The subscription is charged per user, with extra transaction fees for various activities.
• Certain users have reported issues with the integration of Bill.com with their accounting software, stating it is not as smooth as expected.
• There have also been complaints regarding inadequate customer service.

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What is Mercury?

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Mercury is a financial technology company established to build a modern banking system for startups.

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Recognizing the unique financial needs of early-stage companies, Mercury set out to create a banking experience that combines the reliability of traditional banks with the innovation and usability of fintech solutions.

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Features

Mercury offers different features to simplify banking and financial management for startups, including:

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Banking Services

Mercury provides checking and savings accounts insured by the FDIC, ensuring the security of startup funds. There are no monthly fees, minimum balance requirements, or overdraft fees, making it a cost-effective choice for startups.

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Mercury also offers virtual and physical debit cards, enabling easy access to funds and seamless online and offline transactions. Startups can send and receive international payments with competitive exchange rates and low fees.

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AP Automation

Mercury's bill pay feature allows startups to schedule and automate payments to vendors and service providers, streamlining the accounts payable process. Users can categorize and track expenses directly within the platform, providing better visibility into spending patterns.

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Also, Mercury enables startups to generate and send professional invoices to clients, simplifying the accounts receivable process. The platform offers tools to track outstanding invoices and follow up on late payments, helping maintain a healthy cash flow.

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Integration Capabilities

Mercury integrates with popular accounting software like QuickBooks and Xero, ensuring seamless synchronization of financial data. It also integrates with payment gateways to facilitate smooth online transactions.

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Real-Time Analytics and Custom Reports

Mercury provides real-time insights into account balances, transaction histories, and financial trends, enabling startups to make informed decisions. Users can generate custom financial reports tailored to their needs, thereby enhancing financial planning and analysis.

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What is Mercury Used For?

Mercury is designed for startups and tech-forward businesses that want a modern, hassle-free banking solution. Its main use cases include:

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Early-Stage Startups

Mercury’s cost-effective and straightforward banking services are ideal for early-stage startups that want to manage their finances without incurring high fees.

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The platform’s easy setup and intuitive interface make it accessible for founders with limited financial management experience.

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Tech Companies

Tech companies benefit from Mercury’s seamless integration with popular financial and accounting tools, ensuring smooth financial operations. The ability to handle international payments efficiently benefits tech startups with global operations.

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Remote and Distributed Teams

Mercury’s online banking capabilities support remote and distributed teams, enabling them to manage finances and make transactions from anywhere.

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Pros

• Mercury offers fee-free services, with no charges for annual maintenance, account management, Global ACH, wire transfers, or additional credit cards. However, there may be fees associated with Financial Workflows services.
• The Mercury Vault ensures up to $5 million in FDIC insurance by partnering with various banks and using sweep networks.
• Customers appreciate the seamless integration of payments, expense management, corporate cards, and other functionalities into one unified platform.

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Cons

• Mercury does not allow cash deposits. This makes it unsuitable for businesses that handle customer payments in cash.
• Withdrawals from Mercury Treasury usually take 1-2 business days to appear in your account but can take up to 5 business days. Such delays can cause challenges in managing cash flow.
• Lenders impose terms and conditions to ensure timely repayment of loans, and loan covenants might limit how founders can run their business while the loan remains unpaid.
• Mercury does not offer additional financial features that startups might need, like fully integrated accounts payable automation and expense management.

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Ramp vs. Bill.com vs. Mercury: A Detailed Comparison

Features

AP Automation

Invoice Processing

• Ramp: Ramp offers a streamlined invoice processing system that allows users to upload, manage, and track invoices efficiently. The platform reduces manual entry and errors by using AI to extract invoice details.
• Bill.com: Bill.com allows for automatic data extraction from invoices, which are then matched against purchase orders and receipts. It also supports multi-level approval workflows, ensuring that invoices are approved by the right people before payments are made.
• Mercury: Mercury provides basic invoice processing features suitable for early-stage startups. Users can upload invoices and manage them within the platform. Although it doesn’t offer advanced AI capabilities, its interface makes invoice management simple and effective for smaller teams.

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Payment Scheduling and Execution

• Ramp: Ramp's payment scheduling feature allows users to set up automatic payments for approved invoices. Payments can be scheduled in advance, and the platform supports ACH transfers and checks.
• Bill.com: Bill.com supports the ability to set up recurring payments. It also supports ACH, wire transfers, and paper checks. Users can also benefit from Bill.com's international payment capabilities, which are important for startups dealing with overseas vendors.
• Mercury: Users can schedule payments directly from their linked Mercury bank accounts. While it supports ACH and wire transfers, it lacks the depth of payment method options in Ramp and Bill.com.

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Approval Workflows

• Ramp: Ramp provides customizable approval workflows, allowing businesses to set up multi-tiered approval processes based on their needs. This ensures that every invoice and payment request is reviewed by the appropriate personnel.
• Bill.com: Bill.com’s approval workflows can be tailored to fit complex organizational structures. It supports various levels of approvals, ensuring that all financial transactions are vetted according to company policies.
• Mercury: Mercury offers basic approval workflows that are easy to set up and manage. While it might not be as customizable as Ramp or Bill.com, it provides sufficient functionality for startups with straightforward approval requirements.

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AR Automation

Invoice Generation

• Ramp: Ramp focuses on expense management, and while it supports some AR functionalities, its invoice generation capabilities are basic. Users can create and send invoices, but advanced features like recurring billing and custom invoice templates are limited.
• Bill.com: Users can create, customize, and send invoices directly from the platform. Features like recurring invoices, automatic reminders, and online payment options streamline the AR process.
• Mercury: Users can create and send invoices, but like Ramp, it lacks more advanced functionalities. Its simplicity is useful for startups that want a straightforward AR solution without additional complexity.

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Payment Collection and Reconciliation

• Ramp: Ramp allows businesses to receive payments via ACH or credit card. Reconciliation is straightforward, with transactions automatically matched to invoices.
• Bill.com: Bill.com offers robust payment collection and reconciliation capabilities. It supports different payment methods, including ACH, credit card, and international payments.
• Mercury: Mercury facilitates payment collection through ACH and wire transfers. While it provides basic reconciliation features, it may require more manual intervention compared to Bill.com.

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Customer Management

• Ramp: Ramp offers basic customer management features, thereby allowing businesses to track customer invoices and payments. However, it lacks advanced CRM integrations and customer communication tools.
• Bill.com: Bill.com includes comprehensive customer management tools. Users can manage customer information, track invoice histories, and send payment reminders.
• Mercury: Mercury provides essential customer management features, suitable for startups with straightforward needs. Users can track customer invoices and payments, but it lacks the advanced management features and integrations of Bill.com.

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Integrations

Accounting Software

• Ramp: Ramp integrates with popular accounting software like QuickBooks, Xero, and NetSuite. These integrations reduce the need for manual data entry and improve accuracy.
• Bill.com: Bill.com offers extensive integration options with major accounting software, including QuickBooks, Xero, Sage Intacct, and Oracle NetSuite. These integrations enhance financial reporting and analysis.
• Mercury: Mercury integrates with basic accounting software, like QuickBooks and Xero. While its integration options are more limited unlike Ramp and Bill.com, it provides important connectivity for small startups.

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Banking Integration

• Ramp: Ramp supports integration with various banks, allowing users to link their bank accounts for seamless transaction management.
• Bill.com: Bill.com offers robust banking integration, enabling users to connect multiple bank accounts. This is useful for businesses that operate with multiple bank accounts or need to manage international transactions.
• Mercury: Mercury offers built-in banking services. Users can open and manage bank accounts directly within Mercury, thereby simplifying the banking and financial management process.

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Third-Party Applications

• Ramp: Ramp integrates with project management tools, HR systems, and expense management software. These integrations enhance its utility and allow for a more connected workflow.
• Bill.com: Bill.com integrates with CRM systems, payment processors, and expense management tools. This makes Bill.com a versatile tool for businesses with diverse software ecosystems.
• Mercury: Mercury offers basic third-party integrations, mainly important business tools. While its range of integrations is limited, it covers key applications that startups need.

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Pricing

Ramp

Ramp offers several pricing tiers depending on your startup’s needs:

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Bill.com

Bill.com offers a tiered pricing structure as shown in the image below:

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Mercury

Mercury recently launched financial workflows that are free to try until August 1, 2024. You must choose one of the pricing tiers below after August 1:

• Core: No monthly fee. Limited to five bills per month with no advanced accounting automation for NetSuite.
• Plus: $35 monthly fee. Allows up to 20 bills per month, with a charge of $2 for each additional bill. No advanced accounting automation for NetSuite.
• Pro: $350 monthly fee includes a dedicated relationship manager and advanced accounting automation for NetSuite. Allows up to 250 bills per month, with a $1 charge for each additional bill.
• Enterprise: Pricing is customized and requires contacting a Mercury salesperson. Includes a dedicated relationship manager.

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Wrapping Up

While all three platforms offer useful AP/AR automation solutions, the ideal tool for your startup depends on your specific needs and priorities:

• Ramp is suitable for startups that prioritize ease of use, fast setup, and built-in spending controls.
• Bill.com is ideal for startups that require a wider range of payment options and strong integrations with popular accounting software.
• Mercury caters to startups that want a sleek, all-in-one banking experience.

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The best AP/AR automation tool for your startup is the one that scales with your growth, streamlines your workflows, and empowers you to manage your finances efficiently.

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Consider factors like your budget, team size, and desired level of automation when making your choice. Also, explore the free trials that each platform offers to find the ideal solution for your growing startup.

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FAQs

What are the eligibility criteria for Ramp?

Your business must be registered within the United States. It must also satisfy Ramp's underwriting requirements, which evaluate the financial stability and creditworthiness of your business.

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Is Mercury an effective banking platform?

Mercury is ideal for startups that want a tech-driven business banking platform with a great user experience and FDIC insurance coverage for large deposits. It’s also suitable for those seeking venture funding.

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However, as startups grow, they may need advanced features like multi-entity support and full AP automation, which Mercury does not offer.

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What is an AP automation tool?

An AP automation tool is a tech solution that streamlines and automates tasks related to processing invoices for businesses. Here’s how it works:

• Invoices are converted into a digital format, eliminating paper trails.
• The software uses optical character recognition (OCR) to extract important information from the invoices.
• Invoices are routed through an automated workflow for approval. Some tools use machine learning to suggest approvals or categorize invoices based on past data.
• Once approved, payments can be made electronically.

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