This series looks at technologies that will be game-changers for small business, particularly firms whose staffs are highly mobile and where travel is part of the game.
When sisters Stephanie and Andrea French went into the coffee roasting and pie business in Vancouver several years ago, the last thing they wanted to think about was paperwork.
They turned to Wave Accounting Inc., a Toronto-based software-as-a-service company. “We do all the bookkeeping online – invoicing, payments, receipts,” says Stephanie French, co-owner of The Pie Shoppe. “We can do everything from a laptop.”
Founded in 2009, Wave is one of several competing software services aiming to lure small businesses and entrepreneurs who are tired of the stuff-all-the-chits-in-a-drawer method of accounting.
While Internet-based accounting tools have long been available, the newest providers are moving fast to transform the most tedious of business tasks.
For nominal fees, or in some cases for free (with on-screen advertising), they seek to streamline and simplify bookkeeping and make it possible for entrepreneurs to keep track of their businesses on smartphones and tablets.
One company, North Carolina-based Shoeboxed.com, will send you a return envelope in which you can shove all those annoying receipts, and they will digitize and categorize everything for your company.
The migration of bookkeeping away from boxed software is part of a massive trend toward cloud-based computing. The International Data Corp., a global market research firm, estimates that between now and 2020, nearly 90 per cent of the $5-trillion likely to be spent new Internet and communications will focus on cloud-based technologies.
The more recent trend now for accounting software providers such as Wave and Kashoo, a Vancouver-based competitor also founded in 2009, is to serve small business.
“So many small businesses are frustrated,” says Rob Maurin, Wave’s vice president of brand engagement. Wave targets entrepreneurs and firms of between one and nine employees.
“We try to look after all the stuff that gets in the way of entrepreneurs who are trying to do their own thing,” he says.
“Most of the off-the-shelf software is really geared at medium-sized companies with 20 or more employees. When you get to that size, you probably have hired somebody to do your books. If you’re smaller, the odds are you have very little accounting training, and the finance side just gets in the way.”
Both Wave and Kashoo can be set up quickly. Customers access the service by signing up on the website. Wave is free, but includes advertising, while Kashoo offers new customers a 30-day free trial, with monthly fees after that.
Wave has already attracted about two million users, Mr. Maurin says: “We have customers from every country except maybe North Korea, Iran and the Central African Republic.” Kashoo’s CEO, Jim Secord, says his company has about 150,000 users, mostly in Canada and the United States.
Both companies were started by entrepreneurs, Wave by Kirk Simpson and James Lochrie and Kashoo by Mr. Secord, who says: “We saw an opportunity to rethink accounting software.”
He noticed that people at small companies, particularly startups, tended to work more collaboratively than those at larger firms, and they did a lot of their work on their smartphones and tablets, as opposed to computers.
Kashoo built its mobile platforms before its desktop- or laptop-based one, Mr. Secord says. The company also worked hard to minimize what he calls the “archaic” aspects of accounting – the technical terms and concepts that accountants but not ordinary people need to understand.
Wave started with a Web-based interface in 2010 and now, with millions of users, is coming out with its phone and tablet apps, Mr. Maurin says. Both companies emphasize that even with the simplicity, they offer serious business services.
“Our tools are true accounting tools – a lot call themselves accounting but they’re not real double-entry systems,” Mr. Maurin says. “You’re not pretending to run your business, so why would you pretend to do your accounting?”
The CPA Practice Advisor, an online site for Canadian accountants, gives both Wave and Kashoo high marks as simple accounting tools that can gather and organize data in ways that accountants understand and which can save time and money if the information needs to be given to a professional at tax time.
“Nobody wants to find themselves in April figuring out whether something last year was a personal lunch or a business lunch,” Mr. Maurin says. “You can skip that moment of pain in the spring” by tracking your intake and spending in the cloud.
Online security is always a concern for customers doing their finances in cyberspace. Both companies say they store information on secure servers the same way the banks do.
Besides stress relief, the biggest benefit to doing accounting online is that in any business, knowledge is power, Mr. Maurin says.
“There’s no business in the world that wouldn’t run better if they could have insight into what’s running under the hood.”