Finance · Accounting

InDinero vs. offline accounting services: does anyone have a recommendation?

Sean Greene CEO & Founder, Bambino

January 22nd, 2016

I'm an early stage startup with minimal, but growing, accounting needs. Should I pursue an agreement with InDinero, an alternative cloud service, or an offline accounting firm using Quickbooks. Tangentially, my goal is to be seeking VC funding within the next 12 months, and I'm wondering if VC's have any preference? 
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Mark Talaba Founder, Vision Former, serial entrepreneur

January 22nd, 2016

Hi Sean. Two real-life examples that may be helpful, and a piece of advice: 1. I have a friend (Marc Kramer - author of 6 books on business including the highly-praised “Small Business Turnaround”.) who has done in-depth interviews with no less than 100 CEOs of public and very large private companies. Marc told me that when he asked the question ‘What’s the first really great business decision you ever made?’, 80%+ of the CEOs responded (in one way or another) ‘Getting an expert financial advisor.’ You won’t get expert financial advice from a cloud service, of from QuickBooks either for that matter (which can run in the cloud, too.) 2. I’ve gone out for Friends & Family, Angel, and VC money, and have gotten a good chunk of each. None of the investors gave a hoot about the accounting system. What they cared about was that the CEO (me) had a strong CFO. As one VC put it: “We like to hear the excitement and passion of a CEO who has something great going on. But then we turn to the CFO and ask “Is he (the CEO) for real? What’s your side of the story?” 3. Don’t just pick any accountant or accounting firm - even a well-regarded one. Pick the person you’ll actually be working with, and make sure that he or she has strong Management Accounting education and/or experience. (Management Accounting is a separate field of study, quite distinct from CPA/Tax accounting. Management Accountants learn the essentials of business operations, becoming well-versed in business needs like cash-flow planning, financing/fundraising, and dynamic budgeting.) Best of luck! Mark

Michael Brill Technology startup exec focused on AI-driven products

January 22nd, 2016

What you use for accounting is number 16,943 in the list of things an investor cares about... unless you're an accounting startup. ;-)

Paul Niederer Founder Raiseworth

January 22nd, 2016

"Xero" is leading edge, cloud based and you can allow them to have their own dashboard with what they want to see.

Martin Omansky Independent Venture Capital & Private Equity Professional

January 22nd, 2016

Use live accounting help. Online services don't give you analytical ability. Sent from my iPhone

John Ellis Digital Media Executive, Entrepreneur and Board Member

January 22nd, 2016

I would recommend an offline accounting firm to ensure your books are in order. I recommend http://www.fullstackfinance.com/ . I’ve worked with this team in my last 3 companies. They can scale with you to minimize your expenses until you’re ready for your own finance team. They work with a lot of VC-backed SoCal companies, which helps when you’re raising because they know their models and trust their numbers.

Katherine Chalmers B2B software marketing executive

January 22nd, 2016

You can find a good CPA on Upwork to help you set up your chart of accounts and get Quickbooks running.  Monthly/quarterly bookkeeping in Quickbooks for Mac is not too difficult - most of the transactions download automatically once you memorize them.  We use Quickbooks for Mac - it's not as fully featured as the Windows version but is fine for what a small startup needs.  ZenPayroll (Gusto) is great for payroll processing.

If you're looking for an affordable full-service option, take a look at Early Growth Financial Services - earlygrowthfinancialservices.com.  For about the same price as InDinero, you can use Quickbooks and actually interact with real accountants.

Michael Brill Technology startup exec focused on AI-driven products

January 23rd, 2016

Thanks Sean... always useful to have a bit more context and I certainly appreciate your intent to focus on the things that you can have the most impact on.

It's not clear whether you need a garden variety small business accountant or can use an online service, but I'd consider that separate from a CFO-level resource. The people who are awesome at strategic financial planning and financing support don't have the time or knowledge to process payroll and file your corporate returns. 

One way or another you'll manage an accounting relationship and, if you need it, manage a CFO relationship. If you're in a position to pay a $200/hr resource to manage a $80/hr resource then, sure, you can find one person or just hire a firm.

OTOH, if finance just isn't all that complex/strategic right now and you can stretch out another month's runway by being less spendy, then maybe you look at that. Who knows what the financing environment is going to look like in six months but there are plenty of reasons to believe it's going to be tough and an extra month may be all the difference.

Maria Sentic

January 23rd, 2016

Seems like I'm a little late to this conversation, but I wanted to add my insight. Firstly, Mark, I could not agree with you more. I'm a CPA who founded a Xero-based online accounting firm in 2013 and sold it last year. We worked with startups and small businesses and focused on the accounting setup, bookkeeping, payroll, and managerial accounting (no tax). What I learned was that entrepreneurs want these tasks taken care of so they can focus on their business. They also really value and benefit from the knowledge and expertise of a financial advisor, and so our clients developed very strong trusted relationships with their individual accountants.

So I took that insight from my first startup and more recently founded AccountingLeap, a platform that helps entrepreneurs like you Sean connect with the financial experts that Mark advises you find. The accountants, CPAs and CFOs on AccountingLeap are vetted for knowledge, experience, and commitment to excellent service. The focus is on finding the right accounting advisor (person, not firm) based on the client's needs (industry, location, services, software...).

Xero and QuickBooks are both great options for accounting software, but what you really need is a trusted financial expert who can take care of the painful parts of accounting and help advise you as you grow your business. In fact, Indinero (and Bench) started out as accounting software and then pivoted to build a service around the software when they realized that's what client need.

Hope this helps - it sounds like Mark already led you in the right direction :)

dod@xlr.net dod@xlr.net

January 25th, 2016

Pros and cons of all types.  Bottom line is, do what you can afford but it is critical that either YOU know what you're doing with your accounts - or you hire/contract someone who does.  Ensure your accounts are as up to date as possible and you are fully aware of your profitability - or lack of.  A good local bookkeeper is probably not a bad place to start.

Michael Brill Technology startup exec focused on AI-driven products

January 23rd, 2016

Sean, I'm curious what that means. Mark's suggestion was to hire a CFO and then hire an outside accounting firm/person with serious depth. 

I have no idea what your company does or what stage you're in. This may very well make sense. But it sounds like you're tiny, pre-revenue, pre-funded company and need to track some expenses and file your corporate returns on time. Most early-stage startups do that with Xero, Quickbooks, Excel or a shoebox. 

I'm sure I'm not saying anything you don't know, but everything you do at this point means you're not doing something else. You can spend your valuable time and money on engineering an awesome accounting infrastructure and team, or spend it getting your product into market and getting customers. 

Lean isn't just about your product.