ABACUS LETS YOU FILE YOUR EXPENSES--AND GET PAID BACK--IN REAL TIME FROM YOUR PHONE.
Ted Power had just gotten his dream job at Google, but the first thing he experienced with the company was more like something out of the movie Office Space. Power says.
"I was based in the New York office, but my manager was in California and she asked me to spend a month out there for orientation. I had to pay for the flight and the hotel out of pocket, which I couldn’t really afford considering I was fresh out of college. It was a couple months before I got reimbursed through their nightmare system. Considering how much companies like Google focus on employee happiness and tech, it was amazing how backwards the process was."
Now Power wants to kill expense reports for good so no one else has to suffer. His new mobile app, called Abacus, lets employees ping a la carte expenses to their employers in real time, right from their phones. Managers can approve the reimbursements quickly, and then Abacus directly deposits the funds to the employee’s bank account. Power says.
"The money is usually in your account within one to two business days. People love not having to wait weeks or months to get paid back."
From an employee’s perspective, it sounds too good to be true. No saving receipts or filling out paperwork. Need to take a business trip? As soon as you buy the ticket or book the hotel, just ping the dollar amount to your boss and wait to get paid back. But what about the other side of this user experience--the boss "on the other end" of Abacus? Won’t he or she be getting spammed every other minute with piecemeal charges to approve?
Power says.
"Sometimes managers new to Abacus worry that these notifications will get annoying--we worried about that, too. What we’ve found is that managers usually like the transparency of knowing what their team is up to, and it’s a great opportunity to send a little love to your employees by getting back to them quickly. You can turn off the notifications, and only do it once a week or once a month, but most people do it daily or every couple days."
Turning an irritating administrative chore into something more like personal messaging sounds like a brilliant mind hack indeed. But for giant companies like Google with a lot of existing accounting infrastructure, Abacus probably won’t be able to come to the rescue. Powers who cofounded Abacus with Josh Halickman and Omar Qari says.
"Right now we’re really focused on smaller companies, ~5-100 employees. This seems to be where the biggest need is--these companies need something better than a spreadsheet, but they don’t yet have super complicated Oracle-type accounting tools."
Still, Power says that "a few big companies" are test driving Abacus with internal teams, and Pinterest is using Abacus specifically to reimburse prospective employees’ travel expenses when they’re flown out for job interviews. That’s exactly the pain point that inspired Abacus’s creation in the first place, so Power and his team must be on the right track.
COMMENTARY: I like the idea for Abacus, but I wonder, given the formal accounting and payables procedures of big companies, who detest cutting checks on the fly, but usually schedule payments once a week, whether they will subscribe to an app like Abacus. On the other hand, smaller companies (less than 100 employees), like the ones Abacus is targeting, have a bit more flexibility, and a whole lot easier to sell to.
I chatted with Omar Qari one of the Abacus co-founders via the Abacus website, and I quizzed him about the response from customers so far, the number of clients they had signed up, and size of those clients, and he told me:
"Admittedly biased, but thus far, we've had a positive response from our customers. They range in size from small founding teams all the way up to 200 employee companies. I'd say the biggest pluses for them are the fact that there literally is no more 'expense report', so employees and manages can do everything in realtime and we do next day direct deposit reimbursements for employees. The biggest complaint thus far from administrators has been that they want more accounting integrations - we've already launched QuickBooks and Xero, but working on Netsuite now."
I am glad to see that Abacus is working rapidly to make their expense report app integrate with small business accounting software like QuickBooks. This is a must have.
But, why stop with expense reports? Abacus should consider adopting their app for paying independent contractors/consultants and temporary workers employed by temp agencies. It shouldn't be too difficult to process weekly timesheets in real-time by having contractors, consultants and temps submit their timesheets via the app. If the app could allow employers to signoff the timesheets using a digital signature input, the timesheet could be downloaded to the agency or employer for approval and payment, just like expense reports.
High-tech companies would embrace contractor payments because they are the largest employers of contractors like programmers, software engineers, systems designers, IT professionals, accountants, etc.. If Abacus could integrate their app with corporate enterprise accounting systems (SAP, Oracle, etc.), this would open a huge opportunity to take the Abacus app to the next level.
Having worked on both sides of the corporate fence -- small and large corporations -- expense reports and contractor payments are an accounting nighmare. Businesses spend countless hours auditing, approving, coding and processing expense reports and contractor timesheets. I believe that Abacus has a huge upside potential. With sufficient capital, adequate staffing, and the right type of sales and marketing push, Abacus should be able to signup thousands of clients.
If I were Abacus, I would signup as many clients as possible. To make it easy, I would offer the app for free for 30-to-90 days before I started charging. The company also needs to get client reviews on their website. Nothing works better than to have your clients advertise on your behalf. Having said this, my greatest fear is that a large payroll processor like ADP or accounting software maker like QuickBooks will compete with Abacus by develop similar software to expand their business. A buyout is also not too far-fetched.
Courtesy of an article dated April 1, 2014 appearing in Fast Company Design
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