GoBootstrap: simplifying SME accounting

I'm keen to see startups in the accounting for small business space. Part of that is because I spent more years than I care to remember in finance roles, part is in the belief that accounting systems that reflect a 600 year old methodology are well past their sell by date. There has to be a better way. GoBootstrap.com makes a valiant effort in that direction and while I like their general approach, they have a long way to go.

First the good stuff. Offering just four tabs from which to choose keeps things really simple. These are income, expenses, taxes and reports. Each is self explanatory and recording the data is simple. There is an assumption that the user is operating on a cash basis so the only thing a user needs to enter are amounts received. On the expense side, GoBootstrap offers a selection of tax deductible categories drawn from the IRS Schedule C. As you enter more data, the system 'learns' what you have entered in the past and offers type ahead style suggestion to save time entering data. The taxes tab provides an estimate of your quarterly federal tax bill based on the figures you've entered. According to the site, it will offer state tax estimates 'soon.' Finally, a graphical report shows your income and expenses as a stacked bar chart with profit as a line chart. It is complemented by a summarized list of income and expenses which you can export to a spreadsheet via the CSV format. That means your tax accountant should be able to pick up the file and easily work with it. General usability is good and it should require almost zero training for a newbie to understand what they're doing. So far so good. But there are real limitations:

• All entries are manual. This is one of the most common sources of error by people entering their own accounting data and the one place where automation is critically important. It is said GoBootstrap will include links from billing software like Freshbooks and Blinksale but no word about automatically pulling in data from banks and credit card operators.
• The federal tax estimate  is good enough but it doesn't take into account deductions for capital purchases for example. Similarly, the omission of state taxes for the 41 states that impose a state income tax might give the user a false impression about how much they owe. For that, users will definitely have to consult their tax accountant.
• The spreadsheet export works well and just for giggles, I imported it to Google Docs. Unfortunately it only provides a summary. None of the detail is imported. That could well be a limitation because it does not provide the external advisor with any way to check the underlying data for accuracy.
• Following on from the above, GoBootstrap is currently a single user style application. It means there is no access for business and tax advisors. Real time access by any nominated user is one of the key benefits of online systems. It means for example that a user could ping an advisor when they're not sure about which expense bucket they need allocate an expense. The adviser then logs in, check out the 'Not Sure' bucket and pings back a note explaining how to handle the item.
• I could not see any obvious help. This is a simple system and should be close to self evident. However users will always have questions and a bit of contextual assistance makes a great deal of difference.

I'm sure these issues will be resolved once GoBootstrap moves out of its beta period but for now, users should realize that limitations exist. Given this is being developed by a couple of ex-Intuit people, it's reasonable to assume they understand the challenges ahead.

Commentators like to think that all new web applications need to have some sort of social flavor. I'm not sure that necessarily applies to accounting style applications though I would always welcome the addition of a password protected RSS feed and the item tagging accompanied by a tag cloud. Why? If I'm an advisor, an RSS feed allows me to dip into a client without having to login to the service and view a snapshot of activity. If I'm using something like GoogleReader I don't have to 'know' who is active, I can tell by the entries it shows me. Tag clouds provide a visually attractive way of drawing attention to important items. In the accounting context, tag clouds that illustrate major customers and major expenses would be useful.

Developing accounting applications is never easy. They are complex but are ripe for overhaul. GoBootstrap is definitely on the right track and has targeted a good niche but it does need to address key issues before offering a paid for service.