Bookkeep CEO Jason Richelson wants to solve the problems he is seeing at businesses that work with gig economy delivery services and are having trouble tracking the payments they are supposed to receive.
His accounting automation system was designed for accountants and has developed more than 40 integrations this year alone for ecommerce, cannabis, point-of-sale and restaurant apps like Grubhub, Uber Eats and DoorDash that post daily sales to more established accounting systems like QuickBooks and Xero. Bookkeep also reconciles payment deposits and generates accounting summaries automatically on a daily basis. The company, based in Brooklyn, New York, has raised $5 million in seed funding this year.
Consumers have increasingly relied on gig economy delivery service apps to shop for goods and order food during the pandemic, especially with so many people working from home and having little time or desire to prepare lunch or visit a restaurant. But restaurants and stores are not always able to get good visibility into how much money they are making or losing through the apps, which typically take a cut of the revenue on each order.
“With all of these apps that everyone’s using for e-sales, bookkeepers have to get passwords and log in in order to find out what is going on with these deposits that they’re getting,” said Richelson. “A restaurant used to have one point of sale and one gross receipts deposit into their checking account for their credit cards, and it was pretty easy for the bookkeeper to figure out, OK, that’s my gross receipts against my point of sale. The fees will come out on the third of the next month, so I can figure out what’s going on and I can log in to the point of sale, which is normally a pretty good accounting platform. Now that’s gone. You’ve got Grubhub, Uber Eats, and five to 10 points of sales if you’re a restaurant, and in e-commerce, you’re often using two or three platforms and maybe up to 10 payment methods. Bookkeepers and accountants do not know where all these deposits are, what the fees are, what’s fees versus sales tax versus whatever. They can log into all these platforms to do it, but it’s basically slowing them down. And in the end, half of them don’t even bother and just book it to income because the owner never gives them the login. So we built a platform to automate this. We have 20 apps on our platform now and we do proper accrual accounting.”
Richelson started his career as a PricewaterhouseCoopers systems analyst before launching several companies, including InternetCash.com, The Greene Grape Grocery, Simply Wine, and ShopKeep, a cloud-based point of sale system. He sold ShopKeep for $440 million in 2020 to Lightspeed, a Montreal-based provider of cloud-based commerce technology. On the other side he has also operated a wine store, where he keeps the books.
“Over the last three years, I started a bookkeeping firm,” said Richelson. “It wasn’t an accounting firm. All we do is your books because I’ve always done my books, all by myself, and one of the last things I did after I left ShopKeep was to just start doing the books on my wine store again and automated it completely.”
That led to the creation of his latest company, Bookkeep. Now he hopes to use the technology he has developed to help businesses transfer data on transactions more easily across accounting and payment systems. He believes that many accountants are underestimating the challenges involved with transferring such data, but bookkeepers can see the need. One of his own investors was skeptical when he heard from his accountant that it wasn’t a problem.
“I told him your accountant does not do your books,” said Richelson. “Find out who does your books because that’s the person who’s suffering, and that’s the person who you never hear about. It’s the underserved. It’s mostly data entry people who are having that problem.”
Bookkeep integrates with QuickBooks, Xero, NetSuite and Sage Intaact, as well as with payment systems like PayPal and Square. Richelson would like the various technology providers to cooperate more on establishing common standards for transferring data so companies don’t have to rely on ever-changing application programming interfaces and customized connectors to integrate with each other.
“I want to start a nonprofit, basically an Accounting API Standards Alliance to get people on both sides — the people who create the data, which is the sales systems, the Uber Eats, the Grubhubs, the Shopifys — and then get the big CPA firms to come up with a standard of how we can transfer data securely and simply so that we can automate some of these workflows so that we can get this data properly into our books from your systems,” said Richelson. “It’s a really big problem, and we’ll try and get both sides to talk.”
He has also been working with cannabis businesses to help solve some of the problems they are facing with the accounting for their businesses, which are largely forced to rely on cash since most of the major banks still won’t work with them to avoid running afoul of federal law.
“They actually end up using a lot of that cash to pay their vendors,” said Richelson. “Unlike retail, where we would take an invoice, input and receive the inventory into the point of sale and then the accountant would pay the bill, when the inventory comes into the point of sale, they actually take the cash out of the drawer and pay the vendor in order to get the cash out of the business. They actually do recycle the cash by paying vendors right away, but sales tax is an enormous amount of money for them. They have to give estimates and pay it upfront. They have a lot of issues, but I think their biggest issue is that everyone thinks they make so much money that all their vendors charge them way too much money.”
He wants to use Bookkeep’s connectors for the different systems to streamline payments and recordkeeping. “I feel like nobody understands these workflows like we do in terms of sales to payments across e-commerce, cannabis, retail, and restaurants,” said Richelson. “We’re building this automation platform to really be a service provider to accountants and CPA firms and help them learn quickly and then automate all those processes.”