A recent audit review conducted by Ernst & Young revealed “control deficiencies” at payments software provider Bill Holdings. 

That review, which took place in April, examined the business-to-business company’s fiscal year 2022 consolidated financial statements filed with the Securities and Exchange Commission in August 2022, according to a Bill filing Monday with the SEC.

This month, following that review, San Jose, California-based Bill and EY determined those deficiencies “existed due to insufficient documentation and evidence retained for Sarbanes-Oxley compliance purposes,” the filing states. That federal law relates to required auditing and public company disclosures. 

As a result, on Monday, Bill determined it “had a material weakness in internal control over financial reporting related to information systems and applications within the quote-to-cash process as of June 30, 2022,” according to the filing. The company provides its financial software to small- and medium-sized businesses.

Given that weakness discovered, Bill said its disclosure controls and procedures “were not effective at a reasonable assurance level” for the past four quarters.

EY found “some gaps in documentation on their side, around some of our internal controls,” said Bill CFO John Rettig during a Thursday appearance at the Needham Technology & Media conference. “This review was triggered by the normal rotation in audit partners that happens after five years.” 

EY’s “opinion evolved and they felt like there might be some additional controls that needed to be defined as key controls,” Rettig said. 

There was no impact to Bill’s financial statements, and EY’s evaluation of the company’s 2022 financial statements “remains unchanged,” the company said in the SEC filing.

Still, Bill plans to file an amendment to its annual filing with the SEC to revise its report on financial reporting and disclosure controls and procedures. The company also said it would amend its quarterly filings, for the fiscal quarters ended Sept. 30, 2022 and Dec. 31, 2022, to revise disclosures related to the company’s disclosure controls and procedures.

“We will enhance our documentation and evidence and control environment for our fiscal ‘23 environment,” Rettig said Thursday.

By Caitlin Mullen on May 19, 2023
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