Adam Neary, CEO of Profitably is on a mission. A mission to help small businesses understand that QuickBooks, Sage and other accounting tools are great for helping you plan for the tax season. Excel is great for a variety of number crunching tasks. But if you want to forecast how your business looks head of time and dig into the profit drivers of your company – you need another tool. And that tool is Profitably (or one of its competing products).
I asked Adam some questions about the market of Excel, QuickBooks and financial planning in this Q&A
Absolutely. Based on Profitably research, 93% of businesses – including those who use accounting software like QuickBooks – plan and manage their business with a spreadsheet. Basically, everyone has an Excel model of some sort.
Why? Because there’s nothing out there that’s better. Excel is infinitely simple and infinitely flexible. The only tools in the marketplace today that do planning better cost >$1-2k per MONTH, and so any business with less than a couple million in annual revenue isn’t going to bother.
We’re here to disrupt this ecosystem.
2. Does Profitably compliment QuickBooks or compete against it
We complement QuickBooks. In fact, we partner with QuickBooks and recently won their 2011 Apps Showcase (1 of 4 winners). QuickBooks is accounting software, and businesses still need accounting software so that their accountants can do their taxes at the end of the year. They just need something else to help with planning where their business is headed…and making sure they get there.
3. Customer profitability is so important, yet why is it so hard to determine
You’re right. It’s critical, and the math is actually quite simple, but the work to get there can be a headache. Imagine a small architecture firm with 10-12 architects and 50-60 clients. To figure out how much money you’re making or losing with each client, you would have to take all the salaries of each employee and break those numbers up across the different clients based on the hours booked to each. These “pro rata allocations” are cumbersome without tools to help, and worse, the data isn’t always readily available. What happens when the payroll data is in a different system than timesheet data? Pretty soon, Customer Profitability is a critical chore than never gets done, and the firm ends up trudging away with “dog” customers they should have fired a year ago.
4. There are a lot of other tools on the market such as Outright, Freshbooks and Indinero that help small businesses manage all or portions of their cash. Any thoughts on the heterogeneous nature of the market place?
Outright, Indinero, Xero, LessAccounting…these are all great web-based accounting tools. These tools compete with QuickBooks to be the “one source of truth” for the company’s financial history, and we are eager to integrate with their data, as well. Lots of customers are looking for alternatives to QuickBooks, and this is where they are looking (not to mention NetSuite upmarket!). We are solving a bit of a different problem. Accounting software looks backward to make sure you’ve got an accurate record of what happened. We’re in the business of looking forward to make sure you’re taking your business in the right direction. Quickly.
5. Is Profitably a “business intelligence” tool as other BI tools are known?
“Business Intelligence” has become one of those terms that means everything and nothing to everyone. At some point, people also started saying “actionable” insights so frequently that it became a throwaway term. Particularly among startups and small businesses, finding the right term to describe what we’re doing is a tough challenge, so we’re focused on building a product so exciting that when they see it, they get it straight away. Sure, there’s a “BI” component to it. Specifically, we’re taking a lot of lessons from “Financial Planning & Analysis” software upmarket. But to the people we’re taking to, it’s all about “Plan. Measure. Execute.”