The Invoicing Gap: How Small Businesses Get Paid, and Why Banks Are Missing Out

Invoicing is one of the most fundamental workflows in running a small business. It’s directly tied to getting paid, managing cash flow, and maintaining customer relationships. Yet the landscape remains fragmented and inefficient despite years of development in digital banking and payments elsewhere. Most businesses still rely on paper invoices or emailed PDFs, and those that have adopted digital invoicing turn overwhelmingly to third-party platforms that prioritize convenience but often introduce higher costs and are disconnected from financial data. For banks, this represents a significant opportunity to reclaim payment acceptance for their business customers by building and integrating invoicing into the digital banking experience. 

In this Javelin Strategy & Research report, we examine how small businesses invoice today, where friction and frustrations persist, why adoption of bank-based invoicing has remained limited despite growing demand, and what, specifically, business owners want from their bank. Finally, the report outlines a practical, phased road map for financial institutions to embed invoicing into digital banking in ways that align with real business behavior and earn back valuable daily engagement. 

Key questions discussed in this report:

• How do small businesses invoice their customers today?
• What are their reasons for choosing those methods?
• What would motivate small businesses to transition to a bank-based product?
• How can banks maximize their competitive advantages by offering invoicing that is embedded into their customers’ overall finances?