from Hacker News

Pilot.com raises $15M to bring bookkeeping into the modern era

by aston on 3/14/18, 3:34 PM with 141 comments

  • by curun1r on 3/14/18, 5:00 PM

    Having worked at Intuit, I'm always amazed at the number of people that look at how crap Quickbooks is and think that beating them is a matter of just making better software. There's some really important psychology that most competitors completely miss.

    First, Quickbooks is frequently not chosen directly. Many, many small businesses choose their bookkeeper first and use whatever they use. One trick Intuit uses both in Quickbooks (bookkeepers) and TurboTax (CPAs) is to put a lot of effort/money into focusing on those relationships knowing that they have a huge indirect impact on acquiring and keeping customers.

    Second, the fact that Quickbooks is so awkward and inconsistent to use isn't a UI problem, it's a feature. This is an important lesson in designing software that people use for their jobs. When you make elegant, intuitive software that almost anyone can use in short order, it stops being an impressive item to put on a resume. And it stops being a barrier to entry for competing professionals. Software like Quickbooks that's hard to use correctly becomes a selling point for bookkeepers and almost accomplishes the same purpose (though to a lesser degree) than professional licensing organizations...it limits the competition and keeps the rates they can charge high.

    So many Quickbooks competitors have failed to knock them off their perch by not realizing that their customers aren't really their target audience and what should be their target audience doesn't want easy.

  • by adam_gyroscope on 3/14/18, 4:20 PM

    Pilot customer here; they are amazing. It's pretty different from a regular bookkeeper largely in that Pilot is super accurate and timely. My time spent doing bookkeeping for my small startup went from an hour or two a week to zero hours a week - those are pretty important hours. Highly recommended.

  • by lancewiggs on 3/14/18, 5:02 PM

    In NZ, UK and Australia we have been using Xero for years, and there is a vibrant ecosystem around it. And yes - it’s turned bookkeepers and accountants into advisors, completely changing their professions. Xero is listed, worth $3-4 billion and growing quickly.

    So how is this different, and how is it going to integrate with Xero, QBO and other cloud accounting software? And why does the article not mention these elephants in the room?

  • by ivankirigin on 3/14/18, 4:22 PM

    If you're new to being a startup founder, you might be surprised by how much time you must waste on this area. Getting it right isn't optional, but most technical founders have a weak finance background. Spend money on tools like this to get your time back.

  • by amoorthy on 3/14/18, 8:53 PM

    I use two Intuit products at my startup: Online Payroll because my BofA account easily integrates with it and Quickbooks to manage the books (because my accountant suggested it). Both products are easy to use.

    Online Payroll looks like a '90s UI but works. Some complications like if you have some non-standard paperwork to file with a tax payment then you have to do at irs.gov.

    Quickbooks UI is actually pretty slick (perhaps recently updated?) The automatic classification is ok, nothing special. One issue is duplicate payroll transactions due to sync'ing with a bank account and Intuit Online Payroll.

    On the whole I spend about 5 min every pay cycle creating paychecks and issuing tax payments. Once a quarter I classify expenses in Quickbooks - about an hour. And once a year I spend a couple hours double checking things with my accountant for the tax return.

    These numbers may get more complicated when we're > 3 employees and have revenues.

  • by whitepoplar on 3/14/18, 5:49 PM

    As someone who's currently looking at Bench and Pilot, it seems that Bench is a similar product, albeit much cheaper once one's revenues start to grow. How does Pilot compare to Bench?

  • by Meekro on 3/14/18, 8:05 PM

    I run a SaaS company, and I'm curious why I would need a product like this. Here's how I handle things now:

    1. Stripe charges my customers' credit cards every month, and deposits money into my bank account once a week. If I want to check my revenues, I just go to Stripe's website and download the CSVs.

    2. All expenses are run through a company credit card. If I want to check my expenses, I just go to my bank's site and download transaction CSVs for the card. If I want to graph them by month or whatever, I can just import that CSV into Excel.

    3. For tax purposes, I need to break down #2 into categories of deductible expenses. I just wrote a perl script parse the credit card CSVs and match descriptions. So for example, it'd have a rule like "/digitalocean/ -> Cloud Hosting" and so on.

    I admit I'm super-ignorant in this area, but the above solution seems to work without requiring any ongoing effort on my part. How would something like Pilot improve things for me?

  • by aresant on 3/14/18, 4:20 PM

    A startup I would love to see is one that could provide detailed personal bookkeeping.

    Mint.com invented this at some level, but there's still an awful lot of manual classification to drive accuracy in my experience.

    In my own household Amazon Prime, for instance, is a major line item expense.

    But I'm unaware of a solution that can sort through and properly classify each purchase within Amazon.

  • by diffeomorphism on 3/14/18, 5:58 PM

  • by rglover on 3/14/18, 4:18 PM

    I'm a Pilot customer. Loving the service and communication with the folks there. Highly recommended if you're looking to get your books straight.

  • by jimnotgym on 3/14/18, 11:04 PM

    This seems to me like an attempt to get into the small end of SME space and also those simpler cases where there is

    a) No stock involved

    b) A small number of expenses (like items on a credit card)

    I guess a saas startup or a freelancer tend to be relatively naive to finance so generally hire an accountant. This is not just to do their books of course, in the UK they are looking for someone to advise on structure, and this often means forming a corporation, which they will do for you. Then there is the issue of VAT (sales tax) which people don't find easy and are scared of. The accountant will do all of this for you for a fee. To save you money they might suggest that you post your expenses to some kind of portal based on xero or quickbooks. Typing in the few expenses of these kind of businesses is absolutely the most trivial of thing to any bookkeeper. They might also use this system to raise invoices from if they are a free lancer.

    In a small Saas business the sales are most likely automated, the Stripe charges are a one liner, and the expenses are often all on a credit card (hosting etc). Payroll is a doddle if you are on fixed salaries and a complete PITA if variable hours no matter what the accounting system. If I was to do the monthly bookkeeping for one of these businesses I would spend more time opening the files and administering my billing to them than I would doing the books. My point here is you either a) know what you are doing and could use a spreadsheet or intuit or xero or Sage or b) need an accountant for advice beyond 'what code do I post hosting costs to'. Maybe this fills a particular niche in the US, but I don't see it troubling the accounts world in general.

    I work in a different space. We have stock, and an ERP keeping count of sales, cos etc. This is the space your Oracle, Sage, SAP are operating in with big money implementations, and i don't see anything to trouble that here.

  • by plinkplonk on 3/15/18, 4:34 AM

    Due Disclosure: Worked at Intuit, once upon a time

    QuickBooks has network effects (most accountants use it and are familiar with it) and lockin effects (once you have many years of your data in it, there is no way to get it out and into another software. at least that is the way it was when I worked there).

    Other products with these characteristics have been disrupted and so can QB. But it will take a lot of work, or a powerful change in perspective. That said, from the article on TC, I don't think Pilot is actually competing with QB.Seems to be more like a layer on top.

    I also agree with most of what curun1r says. Intuit is a weird company in many ways, but they do know what they are doing businesswise.

  • by samcampbell on 3/14/18, 4:11 PM

    As a former Big 4 accountant in SF, I see Pilot addressing a huge need for startups with a fresh technology layer. I'm sure customers will be happy to get back to building their companies!

  • by happertiger on 3/15/18, 9:10 AM

    Good. We need a substantive competitor for Quickbooks and some real innovation in the space.

    You can’t underestimate the complexity and specific requirements of accounting software. Startups in the space begin their journey in a nuclear minefield of customer requirements, and have to navigate not only the professions inane nuances, but also continually evolving bureaucracies and the accounting and tax realities they create. Not. Easy. Stuff.

    I wish them luck. Seriously. It’s nice to see entrepreneurs attacking the boring companies. :)

  • by chrischen on 3/14/18, 4:13 PM

    Their pricing seems to be on par with hiring a regular bookkeeper.

  • by orthecreedence on 3/14/18, 11:37 PM

    Somewhat off-topic, but are there products that do this for home accounting? Like it hooks into my bank account(s), grabs all the transactions, categorizes them, and lets me run reports on them? I have a hodge-podge setup going right now with ledger/plaid.com/custom web UI, but missing things like notifications and budgeting.

    I've looked around a bit but not found anything that lets me just set it up once and leave it (and learns from categorization data).

  • by vinhboy on 3/14/18, 4:34 PM

    I've been working, unsuccessfully, on accounting software for small businesses for like 8+ years now. I am surprised they got so much funding to come into the space. Good luck to them. It's a great space to build software for because people rely on it and they are willing to pay for it. I wish I had that kind of funding to continue doing it.

  • by pgt on 3/14/18, 5:03 PM

    What's the secret sauce? I tried signing up but it demands a consultation time. Just show me the product, please

  • by awad on 3/14/18, 10:31 PM

    I think there are some employees active on this thread...how do you position against, say, Indinero?

  • by SandersAK on 3/14/18, 10:37 PM

    I'm having a hard time understanding how this is worth it compared to Xero and their rule-based functions. It's really easy for Xero to learn just the same as a person (if not better).

    Am I missing something?

  • by beaconstudios on 3/14/18, 4:40 PM

    on a somewhat tangential note, how on earth did they secure that domain? Surely buying it would cost a fairly large fraction of that $15M investment if they were to have done it at market rates.

  • by Kiro on 3/14/18, 5:47 PM

    Is this for US only?

  • by PerfectElement on 3/14/18, 8:46 PM

    Is there something like this for Canadian businesses?