ZipBooks Raises $2 Million, Plans To Build The Best Accounting Software Program On The Market

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ZipBooks develops free accounting software for small businesses. They’re making a run at the traditional SaaS business model by providing short-term financing to small businesses. They think there is a better way to run a business than to charge everyone the same monthly subscription. Because of the way they make money, they are able to leave the invoicing and accounting features free for everyone. The biggest challenge they are facing is educating small business owners about what invoice financing is and how it can benefit their business. Below is our interview with Brad Hanks, Growth Engineering Executive at ZipBooks:

Q: Brad, what is ZipBooks startup story?

A: Tim Chaves, CEO and founder of ZipBooks got the idea for invoice financing from his own experience as a business owner. Before going to business school, he ran two different businesses and learned a lot about the counterintuitive nature of business growth. Growing revenue in the medium term always meant less cash on hand in the short term.

As you grow as a company, projects get bigger but payments often get slower–and you still need to pay your employees every two weeks. This is a function of working with larger companies because they usually want better terms than the smaller clients. It was ironic that even though his company was looking better and better on paper, his cashflow headaches grew right alongside his “on paper” profits.

ZipBooks is one possible solution to the daily struggle with liquidity. The app lets you do your accounting and invoicing in one place, which is convenient for small business owners. But the really cool twist is, if ZipBooks users qualify and want it, ZipBooks can pay small business owners for their invoice right away with a single click, and ZipBooks will automatically schedule repayment over time with low, transparent fees. Because ZipBooks generate revenue on those transactions, ZipBooks is free to everyone.

Just to be clear, ZipBooks doesn’t charge a monthly subscription and there are no limits on usage. There are lots of premium features that you get with ZipBooks that you would have to pay for with any freemium invoice software options that are out there.

Q: Could you please give us more insights ZipBooks functionality?

A: ZipBooks has gone through a lot of growth spurts and with the recent hire of more engineering talent, we are anticipating getting to true “double-entry bookkeeping” in early 2017. For the time being, ZipBooks does a great job of handling a company’s accounts receivable and ties in well with a native time tracker that seems like a logical extension for any billing software solution.

Here is a list of the features that you get with the app as it stands today:

Create edit or send an estimate
Convert an estimate to an invoice with an approved budget
Time tracking with auto-import into an invoice
Create, edit or send an invoice
Online accounting software (compatible w/ any internet-connected device)
Credit card processing
Bank feed integration
Reports (income statement, sales tax, expense by client/category)
Native iPhone app

We developed a healthy appreciation for how feature-rich our web app is as we developed our iPhone app to match most of its functionality. In some cases the iPhone app does more. For example, the iPhone app lets you take a picture of a receipt for future use when you have to itemize your business deductions.

Both the web app, which completely adapts to the size of your screen, and the iPhone app let you create estimates, invoices, automatically import billable information from our time tracker, pull in data feeds from your bank, process credit card payments. ZipBooks also supports PayPal (Bingo Sites that Accept PayPal).

There are lots of great invoicing solutions out there and a handful of companies that are doing accounting software, but no one is offering the premium experience that ZipBooks offers without a monthly subscription. And that is because no one offering built-in invoice financing right into the app the way that ZipBooks does.

Once you apply for invoice financing through ZipBooks, you can send an invoice and get paid with the click on one button. That is something ZIpBooks makes available in their web app and inside their iPhone app. To our knowledge, no other invoicing iPhone app let’s you finance an invoice right from the app.

Q: Which customers benefit from your software and how?

A: Any small business who wants to get paid, track their net revenue, provide their accountant with income statements, or automatically track their business expenses through our bank integration is welcome to try ZipBooks. The fact that we don’t charge a monthly subscription is just the cherry on top. I mean we also make automated billing possible and there is also an easy way to setup late payment reminders and solicit customer feedback so there are a lot of cherries on top.

Q: You’ve recently announced a $2 million Seed funding round; what’s your next step?

A: We have expanded the engineering team to meet the aggressive product roadmap that we have set for ourselves. We are excited to be able to use some of that to further prove out our business model that small businesses value having instant access to a credit line. We want to meet the needs of more and bigger businesses by expanding the scope of what our software can do. The top feature request that we get from companies considering ZipBooks is double-entry bookkeeping. Servicing the needs of companies with bigger average invoices means that we need to facilitate more than just the tracking of revenue and expenses. We are doubling down on the engineering team so that we can quickly get to a point where ZipBooks will be able to track assets and liabilities. Getting to the point where we can fully replace QuickBooks is going to be a big milestone for us.

Q: What can we expect from you in the future? What are your plans?

A: In the short term we want to build the best accounting software program on the market, not just the best free accounting software program out there. We want to first make sure that we are honing the experience of eighty percent by nailing the main features that everyone is going to need from their accounting software. We want to make reconciliation easier and the overall experience less painful than what companies have come to expect (and dread) from their online accounting software solution.

In the medium- to long-term, we want to be the “Jarvis” of small business accounting. we will also be able to make timely recommendations based on our ability to predict patterns from a company’s account history. We will also be able to anonymize financial data from many different kinds of companies and use that to give a small business owner an idea of how their business is faring compared to anonymized data from other companies in their industry.

It is a pretty exciting time for FinTech. The development of software has never been more streamlined than it is today and the talent pool you can draw from is deeper than ever before. We are pretty fortunate to have both formally trained accountants and top engineers at ZipBooks and in some cases both those qualifications are found in the same person!

Last Updated on January 21, 2017

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