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

• samcampbell 9y ago
  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!
• chrischen 9y ago
  Their pricing seems to be on par with hiring a regular bookkeeper.
  • rabidonrails 9y ago
    I'm no Intuit fan but this seems to be more expensive that Quickbooks with all of the add-on features. That said, bookkepping is a major pain and stellar support is definitely worth something.
    • chrischen 9y ago
      It says they use Quickbooks Online. They are replacing the regular human accountant.
  • ovao 9y ago
    As someone who’s been in this field for quite a while now, my experience in working with most freelance bookkeepers is that...they’re terrible. It’s a trade that has its fair share of thorniness, and most freelancers I’ve worked with simply don’t have a sufficient grasp of it (or are simply unmotivated to care enough to follow through). With sufficient (very deep) automation it can be done properly, which is what Pilot seems to be aiming for.
• rglover 9y ago
  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.
• aresant 9y ago
  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.
  • dalore 9y ago
    I find the same thing with classifying purchases. Most shops can be classified by the shop itself. But with Amazon purchases it can be anything. I have half a mind to write a script that looks up the purchase and finds the category on the Amazon shop page and updates the qif file.
  • andrewaylett 9y ago
    I've found that the key here is minimising the number of categories, and making sure the categories align with how you spend more than what you buy. So my "Groceries" line item includes everything I get from a supermarket, not just literal groceries. I use https://youneedabudget.com/; https://youneedabudget.com/; it's been fantastic. The marketing focuses on the budget side, but having put together a budget you then obviously need to book-keep to use the budget you've put together :).
  • lancewiggs 9y ago
    Check out Pocketsmith
• adam_gyroscope 9y ago
  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.
  • andruby 9y ago
    Can you explain how it saves those hours? Do you no longer have to input invoices and expenses? Is that all automated?
    • adam_gyroscope 9y ago
      Yep - all of that is automated. Importantly, all the the classification of the transactions is automated as well, so I no longer have to look at a charge like "GUS99PWR-T BILL.COM" on my credit card statement and figure out a) where it is from and b) that it should be categorized as a marketing/promotional expense.
      • adam_gyroscope 9y ago
        Oh, and I get a report every month with all my reports (balance sheet, P&L, etc) and summary data, and they do amazing customer support.
      • MarkMc 9y ago
        How do they know that "GUS99PWR-T BILL.COM" is a marketing expense? Do they use the fact that other users have previously classified "GUS99PWR-T BILL.COM" as 'Marketing'?
        • wdaher 9y ago
          The first time we see something totally unknown to us, just like a normal human bookkeeper, we'll have to ask you about it (assuming there isn't metadata somewhere else that helps us categorize it). But then once you've told us, unlike a normal human bookkeeper, we won't forget about it later — we'll actually encode a rule in our software that will enforce this check going forward. (And yes, you also do benefit from "If our system has seen this type of transaction somewhere else, we can make a more intelligent guess")
• ivankirigin 9y ago
  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.
  • walterbell 9y ago
    Yes, we need startup tools that are competitive with freelancer tools like Wave, https://www.pcmag.com/article2/0,2817,2484099,00.asp https://www.pcmag.com/article2/0,2817,2484099,00.asp ”Wave jumps significantly in the online accounting standings this year ... the free service only charges you for payments, payroll, and premium support (at $19 per month) ... Not only is Wave the best free small business accounting website, it's one of the best online resources period for its target small business audience: freelancers, contractors, and sole proprietors.”
  • fma 9y ago
    Agreed...started using Wave but I feel like I should have used quickbooks. Though they have payroll, they do not pay your taxes for you (only in a few select states). You need to do it manually...and at times I've forgotten and had to pay penalty. Now I use square - and they do it all automatically. I didn't know I had to 'turn off' payroll in wave and was charged the $15 a month even though I didn't run payroll for any employees. Payments...their recurring invoices are good, but you need to do some manual work. They create the invoices and it adds to your sales. When they deposit your money to your bank it adds to your sales as well. So you need to find the one they deposit and manually delete. I asked if there's like a report they generate that tells me everything they've deposited...it doesn't exist. So you could mistakenly delete something, or forget to delete something...and it throws everything out of whack. You could be underpaying or overpaying taxes. Their 'ACH' requires people to log into their bank. I'm not going to try to convince my customers to click on a link on my invoice and put in their bank credentials. I have other gripes...there's definitely room for improvement. I haven't seen that much changed in the last few years...not sure if they cut back on their development team or what. I probably should have looked more heavily into Quickbooks since that's the industry standard. I will look into pilot, though.
• vinhboy 9y ago
  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.
  • tc7 9y ago
    Did you release a product that didn't get customers, or how were you unsuccessful?
    • vinhboy 9y ago
      Had some customers. But never got that hockey-stick growth all VCs want. And you're always competing with the big boys, Quickbooks, Netsuite, etc... It's a constant arms race to add more features, more integrations, etc... A lot of customer support because your customers rely on you to run their business. I enjoyed it, but it's a tough nut to crack.
• beaconstudios 9y ago
  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.
  • tantalor 9y ago
    In March 2010 it was spam, https://web.archive.org/web/20100317234443/http://www.pilot.com:80/ https://web.archive.org/web/20100317234443/http://www.pilot.... In May 2013 it was a placeholder for "curated collection for the style conscious gentleman", https://web.archive.org/web/20130522175805/http://www.pilot.com/ https://web.archive.org/web/20130522175805/http://www.pilot.... Then July 2017 it was for bookkeeping, https://web.archive.org/web/20170719213539/https://pilot.com/ https://web.archive.org/web/20170719213539/https://pilot.com...
    • beaconstudios 9y ago
      I guess they managed to pick it up for a reasonable price.
  • wdaher 9y ago
    Pilot CEO here. Short answer is "A domain broker, some good timing, and a fair bit of money". Definitely not "a large fraction," but an amount that made us think hard about it first.
    • niblettc 9y ago
      Do you guys also do payroll bookkeeping and processing? What about customers who want project/job cost accounting for payroll and other expenses?
      • fma 9y ago
        A question I'll tack on...for payroll do you guys automatically pay and file taxes for unemployment, medicare etc?
• deleted 9y ago
  [deleted]
• curun1r 9y ago
  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.
  • kareemm 9y ago
    These guys aren't a Quickbooks competitor. They use Quickbooks online to do their customers' bookkeeping. They're a technology-enhanced service business.
  • andruby 9y ago
    I fully agree with your first point. However, I don't think Quickbooks purposefully designed their software to be hard to use. I think that just happened when they grew their software organically without spending much effort and rework with good UX designers. It's more important that B2B "work" software works accurately, correctly and ticks all the required features, than that it is intuitive or beautiful. A steep learning curve is a problem for B2C software, not so much for B2B software that is used intensely.
    • 9y ago
• lancewiggs 9y ago
  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?
  • pdq 9y ago
    Seconding Xero from the US for payroll and accounting. Their pricing is excellent.
  • simonbarker87 9y ago
    Xero is probably my favourite peice of time saving software we use, possibly just my outright favourite. It works flawlessly and the fact that our accountants can login and work with us on something is a huge bonus.
  • flog 9y ago
    As a founder in the UK I was using Xero and a London based virtual-CFO about 8 years ago, and it was an absolute life saver not having to deal with the cruft. The accountants did the books for most of the good startups in London at the time, so had a good range of experiences from funding to tax credits. Of course, they did this without raising $15M :) Interesting to see how this seems to be a "new" thing even now in the US market. [Disclosure: I am an ex-Xero employee]
  • wdaher 9y ago
    We do all of our bookkeeping in QuickBooks Online (and only QBO) today. In the US, QBO is still definitely the market leader, and we think there are a bunch of benefits for our customers in using QBO. (Bank integrations and other third-party software integrations tend to be better, there's a bigger ecosystem of e.g. tax and accounting firms that are better-equipped to deal with it, etc.) (And then from an engineering perspective, we can be a lot more efficient if we can focus on targeting one platform.)
  • Lazare 9y ago
• pgt 9y ago
  What's the secret sauce? I tried signing up but it demands a consultation time. Just show me the product, please
  • wdaher 9y ago
    (Pilot CEO here). Here's the thing that's a bit different about Pilot: it's not a software product — it's "You have a bookkeeper who does your books (in QuickBooks Online), that you can call and email when you have questions, and that sends you a report every month." Under the hood, we're building the Iron Man suit for the bookkeepers—letting our team do all the heavy lifting to make sure the work is super-accurate in a way that your typical bookkeeper definitely can't. Basically, the last thing I wanted as a startup founder was "Yet another software product"—I wanted someone to just take care of the problem for me —which is why we built it this way. I also find it annoying when people gate software behind sales forms — "Just let me try it!" — but in this case, there really is nothing for you to try, by design. We do all the work for you. (The next steps today are: we quickly chat with you to better understand your business, and if it's a fit, we pair you with an account manager here, and then send you through a web flow to get read-only access to all the systems we need — your bank, payroll processor, etc.)
    • a_d 9y ago
      Brilliant model. PayPal's fraud detection is usually the most cited human intervention model for building "smart systems", but the idea goes back further: Amazon's backend in the 90s, CD baby's recommendation engine [1] and one can probably find examples that are decades old. I have built large operations teams around this central idea. Happy to chat if you want to compare notes and experience doing this. [1] https://sivers.org/hi https://sivers.org/hi
• Kiro 9y ago
  Is this for US only?
  • wdaher 9y ago
    Yes.
    • cmer 9y ago
      Why wouldn't this work for Canada? Could it?
• whitepoplar 9y ago
  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?
  • wdaher 9y ago
    Three key differences: * Our books are stored in QuickBooks Online, and you have access, so you're never locked in. If you need to work with another provider or just don't like us anymore, you can hand your data to any bookkeeper in the world, because it's just QuickBooks (vs. being handed an Excel export from a custom accounting system) * All we do is startup company bookkeeping, so we've developed super-deep expertise in it (vs. aiming to solve it for, e.g. the bakery or yoga studio) * We do accrual-basis bookkeeping (vs. only supporting cash-based bookkeeping)—this is a pretty inside-baseball thing, but it matters as the startup gets larger I don't know how much automation Bench has already built, or if it's all just humans under the hood, but one structural advantage of #1 for us is that it means our engineers can spend all their time focusing on automating error-prone work (rather than needing to build out a QuickBooks clone).
    • whitepoplar 9y ago
      Thanks! This...makes a lot of sense. Since you're focused exclusively on startups, is there any chance y'all can write up a "tools" guide for people just starting out, not just for bookkeeping? i.e. "Here's stack that new companies have a lot of luck with, that minimizes headaches and saves time: Pilot, Expensify, Gusto, Stripe etc." Speaking of which, any recommendations for things I can do now that will save me headaches down the road?
      • wdaher 9y ago
        Yes! "Pilot recommended financial stack" is definitely at the top of the list of blog posts we want to write because it's just super-nice to get set up on the right stack from day one, rather than having to worry about it when things are more complicated. The short, spoiler version for now is: Gusto, Chase corp card, Stripe, Expensify, bill.com if you do a lot of invoicing. (And then the more 101 stuff, like, "Please don't mix business and personal expenses")
• diffeomorphism 9y ago
  Any relation to pilot.co , Pilot Corporation (https://www.bloomberg.com/research/stocks/private/snapshot.asp?privcapid=4182636 https://www.bloomberg.com/research/stocks/private/snapshot.a...), Pilot (https://www.pilotfiber.com/ https://www.pilotfiber.com/) or Pilot (https://pilotpen.us/ https://pilotpen.us/) ?
  • wccrawford 9y ago
    I think this is a perfectly valid question, especially considering that Pilot once sued Palm for naming their device Pilot.
    • Infernal 9y ago
      Which Pilot sued Palm?
      • wccrawford 9y ago
        https://en.wikipedia.org/wiki/Pilot_1000 https://en.wikipedia.org/wiki/Pilot_1000
  • wdaher 9y ago
    No relation to any of those companies, though naturally we do buy Pilot pens. I mean, they're just great pens.
  • heartbreak 9y ago
    And one of those Pilots is known for tax evasion and other fraud: https://www.justice.gov/usao-edtn/pr/federal-jury-returns-guilty-verdicts-former-pilot-flying-j-president-vice-president-and https://www.justice.gov/usao-edtn/pr/federal-jury-returns-gu...
• Meekro 9y ago
  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?
  • obblekk 9y ago
    at some point of scale, it's not feasible to run all expenses through a credit card. Companies start asking for direct invoicing with bank transfers as payment to avoid the fees on credit card transactions.
  • awad 9y ago
    Being completely ignorant of your business and noting that all businesses are different, here are some generic considerations around each of the points you raise. 1) Do customers prepay for a month or pay after services have been rendered? Cancellation terms and prorating? There are accounting nuances to each which of course can matter greatly or not very much depending on the particulars of your set up. 2) Running expenses through a company credit card certainly makes things easier but the same considerations as above can also apply...do you prepay for any services? Have long term service contracts even if you pay monthly? 3) Speaking of taxes, do you have a payroll? That's a whole rabbit hole onto itself. As with most things, context is everything here. Having a proper set of financials that adhere to generally accepted accounting principles (GAAP) are absolutely needed for any fundraising or M&A activities you might do. At minimum, a more precise set of financials can help with understanding the nitty gritty of the business when it comes to forecasting and at-glance health of the business.
  • 9y ago
• PerfectElement 9y ago
  Is there something like this for Canadian businesses?
  • sirkworraps 9y ago
    http://origami.ca http://origami.ca We're a small business all-in-one, flat fee, bookkeeping/accounting service operating in the Canadian space. We solve a similar problem space for Canadian business.
  • thinkingkong 9y ago
    Bench.co
• amoorthy 9y ago
  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.
• awad 9y ago
  I think there are some employees active on this thread...how do you position against, say, Indinero?
  • wdaher 9y ago
    Biggest differences vs. inDinero are: 1. Our books are stored in QuickBooks Online, and you have access, so you're never locked in. (The "Leave inDinero" migration is a pretty rough one.) (Strategically this is also important for us because it lets our engineering team focus on building software to assist with the most thorny/painful parts of the process, as opposed to making a QuickBooks clone.) 2. We do accrual by default (inDinero will do it but only at the most premium tiers) 3. Most importantly: our customer service is way better—if you're seriously considering inDinero, I'd encourage you to talk to a few current users and see how they feel about it. (Not fearmongering, but the stuff we've heard has not been great.)
    • awad 9y ago
      Fair enough. I actually used to use them and the above resonate with me. From my perspective, your solution looks like something that would be worth looking into if I were starting fresh, given that we're a SaaS startup with the added nuances that entails.
• SandersAK 9y ago
  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?
  • wdaher 9y ago
    Pilot isn't "more bookkeeping software", it's "hire this company so that you don't need to worry about getting into the weeds in QuickBooks Online every month, because you have a person who will do all your work in QuickBooks Online for you (assisted by our software)". It's not that bookkeeping is rocket science or totally unlearnable (you can definitely learn it), the question is really whether it's actually the best use of your time to master it (when you could instead be focusing on running your business).
    • ebcase 9y ago
      Thanks for all your replies in this thread, @wdaher! Can you share how you are approaching growing / scaling the human side of your bookkeeping army? E.g. the dedicated account managers — when I shared your site with a CPA friend, he asked if you have outsourced teams in India doing the categorizing.
      • wdaher 9y ago
        Great question, and definitely one of the operational complexities of the business. Our thesis is: by relying heavily on software from day one, we can actually do it with a small, super-highly-skilled team (rather than a giant army of folks.) If the task can really be done by an arbitrary person somewhere without context on the business itself, I suspect we can execute that same task ourselves in software (only with much higher consistency and much lower cost). Transaction categorization is a great example of this, actually. I think the alternative—scaling by just hiring a ton of people—is compelling because it's short-term easy but long-term hard. By analogy to a software system: if you scale with an army of people, you're building a giant distributed system of super-unreliable hardware (the error rate of people is pretty high!), and you can't reprogram it by running "git push". I'll venture to make a stronger statement: if you care at all about consistency of quality, I think you have to do this mostly in software -- because otherwise the quality of your service is going to be entirely the quality of the individual bookkeeper you use, which is fundamentally going to be pretty variable.
• jimnotgym 9y ago
  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.
• orthecreedence 9y ago
  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).
• plinkplonk 9y ago
  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.
• happertiger 9y ago
  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. :)