In 2021, 56% of small businesses sent some form of electronic invoice, and 16% did so through their bank. Four years and several digital banking refresh cycles later, those numbers are 61% and 18%. Electronic invoicing has grown. Bank-based invoicing has not.
That’s the finding from Javelin Strategy & Research’s most recent invoicing study, The Invoicing Gap: How Small Businesses Get Paid, and Why Banks Are Missing Out. Most of the growth in digital invoicing over the period went to PayPal, Square, QuickBooks, Stripe, FreshBooks, and Xero.
For a category as fundamental as getting paid, a four-year stall inside the most important small business channel is not a rounding error. It is a strategic gap, and a clear opportunity.
Javelin’s answer is structural. Of the largest U.S. financial institutions, only four have meaningfully brought invoicing into the small business banking experience: Chase (launched May 2024), Citizens Bank (powered by Autobooks, 2023), TD Bank (powered by Autobooks, 2021), and U.S. Bank (merchant-only, via Elavon). Together, those four account for roughly a quarter of all primary banking relationships among U.S. small businesses.
The other three-quarters of the market is where the opportunity lives. Most financial institutions have not yet offered invoicing inside digital banking, not because their small business customers don’t want it, but because distribution hasn’t caught up to demand.
The bottleneck on small business invoicing is not whether small businesses want it. They do. The bottleneck has been the path to delivery. And that path is now well established.
Every invoice that goes out through PayPal, Square, or QuickBooks is a payment the financial institution never sees and a relationship touchpoint the institution never has. Multiply that across the hundreds of thousands of small businesses using third-party invoicing today, and the deposit base, the data, and the engagement all live somewhere else.
It is not only a deposit story. Javelin finds that small businesses report the same four frustrations regardless of which method they use today: customers overlook invoices, creating them takes too much time, payment acceptance is expensive (especially card fees), and the data never connects to cash flow analysis. No one’s current solution has fully solved the problem. The competitive door is open.
For financial institutions, that openness is the opportunity. Small business customers are not loyal to PayPal or Square the way they are loyal to their bank. They use what’s available. If something better shows up where they already are, they will use it.
The Javelin wishlist is short and notably familiar. When small businesses were asked what features would matter most if their bank offered invoicing, they ranked support for multiple payment methods (cards, ACH, digital wallets) first, followed by visibility into invoice status, then connection with accounting software. Demand for Zelle for Business as a payment acceptance method appeared "especially promising," indicating interest in fast, free settlement directly into the checking account.
None of that is a request to replicate Square. It is a request for what a financial institution naturally has and what a fintech does not: the deposit account, the transaction history, the existing relationship, and the same-day settlement that comes from accepting payments where the money already lives.
For paper invoicers, still a meaningful share of the market, Javelin finds the barrier is not capability or cost. It is perceived effort. 40% say emailing or mailing is "just easier" than adopting a dedicated tool. The opening for financial institutions is to deliver invoicing without a new app, a new login, or a new account. That is a structural advantage of being inside digital banking. It is also the standard small business customers will measure the experience against.
The demand is real and durable. Small businesses have wanted invoicing inside their primary banking experience for at least four years. The category has not stalled because interest faded. It stalled because most institutions had no clear path to deliver it.
The path is now well established. Most leading core and digital banking vendors have already partnered with Autobooks to extend invoicing to smaller financial institutions. The Javelin study uses that exact framing. Connected invoicing inside digital banking is a partner conversation, and most of the upstream work has already been done at the vendor level. The path to delivery for any individual financial institution is short.
The value comes from the connection. Small businesses are not asking for an invoicing tool. They are asking for a payment experience that is connected to their deposit account, their transaction history, and (when enabled) their accounting layer. That connection is what makes invoicing inside digital banking different from invoicing through a third party. It is also what powers Cash Flow Intelligence, the proactive view of money that small business owners say they value most.
The invoicing gap is the most quotable finding in the Javelin study. It is not the most important one. The most important finding is that small business customers want their bank to do this work, and the infrastructure for delivering it already exists. The opportunity ahead is closing the distance between the two.
Javelin Strategy & Research, The Invoicing Gap: How Small Businesses Get Paid, and Why Banks Are Missing Out, December 2025. The study compares 2021 and 2025 small business invoicing behavior, with detailed segmentation by invoicing method (paper, third-party tool, bank-based).
Javelin’s research evaluates the providers extending invoicing inside digital banking. The report identifies Autobooks as the partner behind two of the four major banks that have meaningfully brought invoicing into small business banking (Citizens Bank in 2023 and TD Bank in 2021), and notes that most leading core and digital banking vendors have partnered with Autobooks to extend the capability to smaller financial institutions.
Connected invoicing means the invoicing experience shares data with the rest of digital banking. The invoice goes out, the payment comes in, the transaction posts to the same account, and (when accounting is enabled) the record-keeping happens without a second tool. For the small business owner, it removes the reconciliation work that fintech invoicing tools leave behind. For the financial institution, it keeps the payment and the data inside the relationship.
No. Small businesses use third-party tools because they have not been offered a better option inside digital banking. Javelin’s research consistently finds that small businesses prefer to get capabilities from their primary financial institution when those capabilities are available. The choice they made was situational, not loyal.
If you run a financial institution and want to see what connected invoicing looks like inside digital banking, the Autobooks.co/banking walks through the capability and how it shows up for your small business customers. If you’re earlier in the conversation, the Autobooks Hub overview is the right starting point for how the connected solution maps onto your existing digital banking.
Source: Javelin Strategy & Research, The Invoicing Gap: How Small Businesses Get Paid, and Why Banks Are Missing Out, December 2025. Additional context: Javelin 2025 Small Business Digital Banking Vendor Scorecard, August 2025.