Record low interest rates, trillions of dollars in government stimulus spending, and pent-up demand from consumers who have been burdened by COVID restrictions for the last 18 months -- that's a recipe for a powerful economic expansion unlike anything we've seen in our lifetimes. Over 99% of American businesses are small businesses, and they employ almost 50% of all workers across the country so their participation is critical to sustained growth.

As the economic recovery kicks into high gear, Bill.com (NYSE:BILL) and Intuit (NASDAQ:INTU) will benefit from an influx of new small-to-medium-sized businesses. Both companies offer software that makes the tedious parts of running a business more seamless, helping with things like managing payables and bookkeeping. They're already delivering robust growth, and both stocks have votes of confidence from Cathie Wood's ARK Fintech Innovation ETF.

1. Bill.com

This company provides a cloud-based platform aimed at solving an age-old business issue. When businesses receive numerous invoices, sometimes things get missed -- not to mention how manually making payments and entering the data into bookkeeping software is a complete time sink. 

Smiling business owner hanging open sign on shop door

Image Source: Getty Images

Bill.com provides a digital inbox that businesses can upload invoices to, which allows for automatic payments to vendors. Settings can be adjusted so smaller payments don't require approval and can flow through instantly. Most importantly, payments are synced through integrations with most major accounting software providers to prevent duplicate entries. The software also allows the issuance of professional invoices to help businesses get paid more quickly.

Uptake has been strong with 27% growth in total customers in the most recent quarter and 45% more revenue year over year.

Metric

Fiscal Q3 2020

Fiscal Q3 2021

Revenue

$41.2 million

$59.7 million

Total customers

91,000

115,600

Earnings (loss) per share

($0.11)

($0.32)

Data source: company filings.

Bill.com is losing an increasing amount of money as it invested 60% more into research and development in the fiscal third quarter. It also spent more on acquiring new customers, increasing sales and marketing costs 29% year over year. The rising expenses are forgivable, though, as long as they continue to generate robust revenue growth. And the company maintains high gross margins above 74%, providing optionality when it comes to delivering net profits.

In June, the company completed a $2.5 billion acquisition of Divvy, an expense management platform helping businesses track business-wide spending. Combined, the companies will offer a more holistic suite of products to customers.

Bill.com generated $157 million in full-year fiscal 2020 revenue, and based on management's guidance, the top line should reach $221.4 million in fiscal 2021, up 40%. With a $19.4 billion market capitalization as of this writing, the stock is trading at 88 times current-year sales. Though far from cheap, if the company can sustain its growth, the stock should look attractive to investors with a time horizon of five years or more -- and this current economic boom could extend long into the future. 

2. Intuit

Intuit is the provider of the popular accounting software QuickBooks, used by millions of small businesses thanks to its affordable price and simple user interface. The company also has a lucrative consumer brand -- TurboTax -- that allows people to file individual tax returns themselves or with the help of an accountant. 

The U.S. tax season usually runs between December and April, so the company's revenue experiences a spike in its fiscal second and third quarters. In the recently announced third-quarter results (for the period ended April 30), Intuit generated revenue growth of 39% year over year -- an impressive result even for the seasonally strong period. 

Metric

Fiscal Q3 2020

Fiscal Q3 2021

Revenue

$3.00 billion

$4.17 billion

Earnings per share

$4.11

$5.30

Data source: Company filings

The strength in this particular tax season appears to come from consumers taking more control over their personal tax returns. The number of TurboTax Live users who turned to Intuit products for the first time were projected to grow 100% this season compared to the same period in 2020. This could be a consequence of the pandemic lockdowns shifting work away from accountants, since consumers were unable to visit them last year. Now, the change in tax-filing habits appears to be here to stay.

Businesses are also flocking to the platform with QuickBooks Online Accounting software experiencing 24% revenue growth during the quarter. The strong results across all segments allowed management to raise its full-year guidance -- Intuit now expects 22% top-line growth, compared to 16% previously (at the midpoint).

After a tough 2020 for small businesses, it was unclear whether Intuit would suffer a contraction in its accounting software segment, but it's evident this sector of the economy is coming back in a big way. Based on a report by The National Federation of Independent Business, 48% of small businesses had unfilled job openings in May, up significantly from the near-half-century average of 22%.

Analysts are estimating fiscal 2021 earnings per share of $9.43, which means the stock trades at 55 times this year's earnings. For investors looking to own a promising growth stock long term, Intuit's momentum makes it an excellent pick.

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium advisory service. We’re motley! Questioning an investing thesis -- even one of our own -- helps us all think critically about investing and make decisions that help us become smarter, happier, and richer.