A former employee of a Big Four accounting firm was frustrated with the lack of innovation in the accounting and financial sectors. His solution? Quit his job and start something new.
In 2014, Kurt Rathmann began ScaleFactor from his living room table in Austin with the vision of making traditional back office functions more efficient, especially in accounting and payroll. Rathmann carried out field research, essentially going door-to-door to investigate the needs of small businesses and incorporated his findings to develop a state of the art accounting software solution.
From bookkeeping, invoicing, to tax filings, ScaleFactor automates these time-consuming tasks to make them more efficient and to offer small business owners greater insight into the health of their business.
One of the startup’s key features is real time reporting. Most accounting firms release financial statements at the end of the month, making the first 10 to 15 days of the month “crazy busy,” explained Rathmann. “That forces the accountant to get into a phase of just trying to get it done. There are long hours, they’re not making it home for dinner, they’re just trying to complete the work.” On top of that, the data is about 30 days old and may not be as relevant. Instead, by using real time data analytics, a company can get advanced insight into its business. Rathmann said, “The data cycle gets cut from 30 days to just one or two days, and the business owner can really dictate some future actions they’ll make, and tactically navigate the business, rather than just react to it.”
Rathmann identified other bottlenecks in traditional accounting. “A lot of people dread interacting with their accountant, for whatever reason,” he said. “We’re really trying to change that.” When an owner has a pressing question, they don’t want to wait for their accountant to respond in one or two days – they expect immediate answers. Using machine learning, ScaleFactor determines how to send real-time notifications to facilitate better communication between the small business owner and the accountant. Important messages will be sent via text message while less urgent correspondence would be sent by email.
“It’s a response to a younger generation and less personal relationships that are part of a millennial-type generation,” Rathmann said. “It’s also that people are less patient for access to data and to information that is theirs. If there is something financial-related to their business, it’s very personal to entrepreneurs and small businesses. It’s more of, ‘I want it now,’ and, ‘Why can’t I have it now? I’m supposed to have it now.’ That’s a lot of the reactions we get in the connected world we live in. People expect faster.”
Are you developing new solutions to optimize office operations? Did you know your R&D activities could be eligible for the R&D Tax Credit and you could receive up to 14% back on your expenses? To find out more, please contact a Swanson Reed R&D Specialist today or check out our free online eligibility test.
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