The Hottest Silicon Valley Accounting Startup: A Conversation with inDinero Founder Jessica Mah

Posted on by The Other Ari Gold
One of the biggest distractions for small-business owners has to be maintaining their books and their accounting. Attaining a firm for the business might be too expensive an endeavor, yet handling it by yourself takes away valuable time from growing your core business. Enter inDinero: a one-stop shop for all your bookkeeping needs. The company nearly went under before launching with an additional offering which now includes tax prep, among other features.
 
I had the opportunity to catch up with the Founder & CEO of inDinero, to learn more about how they meet their client's needs and how a couple of non-accountants in Berkeley came up with the accounting software success it is today. 

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More Small Businesses Ditching Big Banks for Community Lenders

This story is republished from CFOZone, where you’ll find news, analysis and professional networking tools for finance executives.

Community banks are gaining ground in the banking sector, scooping up small business customers that are feeling underserved by bigger institutions.

The four largest US banks – Bank of America, Citibank, JP Morgan Chase and Wells Fargo/Wachovia – currently hold the greatest share of small-business customers, according to a report from Aite Group released Thursday. But community banks are growing their share at the fastest rate, often at the expense of large banks.

Roughly 35 percent of US small businesses consider a community bank to be their primary financial institution, up from 24 percent in 2006.


The report revealed that large banks are failing to connect with small businesses. One of the reasons is that they struggle to understand their needs.

“Large banks are missing the boat when it comes to effectively serving and cross-selling to small-business customers,” said Christine Barry, research director with Aite Group, in a press release. “This is evidenced by the declining satisfaction rates of their customers and their failure to meet cross-selling needs.”

Such a customer base is crucial, even for large banks, at a time when deposits are precious commodities.

Small banks have been able to make headway by purchasing failed community banks, as reported by The Big Money this week.

“As the continuing real-estate crisis pushes more tiny banks into failure, the most common saviors have been other small banks, community banks, small thrifts, and modestly sized lenders,” Heidi Moore wrote.

But small banks aren’t necessarily a safe haven from troubles ailing their bigger competitors.

Although banks with over $10 billion in assets hold over half of commercial banks’ total commercial real estate whole loans, smaller banks have an overall greater exposure to commercial real estate, according to a report from the Congressional Oversight Panel.

Sheila Bair, chairman of the Federal Deposit Insurance Corporation, recently voiced concerns about the risk that commercial real estate poses to community banks, noting that commercial real estate comprised more than 43 percent of the portfolios of community banks.

Those concerns are well founded, as commercial real estate has played an increasingly large role in bank failures. For the 205 banks that have failed since 2007, a third of their loan portfolio has been made up of commercial real estate loans, compared to an industry average of 26.9 percent, according to investment bank KBW. The seven banks seized by the Federal Deposit Insurance Corporation last Friday had an even higher concentration with almost 40 percent of their loans tied up in commercial real estate.

If write downs increase as expected, it could ultimately create capital problems for community banks, which could in turn curb lending to small businesses.

“The current distribution of commercial real estate loans may be particularly problematic for the small business community because smaller regional and community banks with substantial commercial real estate exposure account for almost half of small business loans,” the COP report published in February said. For example, smaller banks with the highest exposure to commercial real estate provide around 40 percent of all small business loans.

AICPA Pushing Members, Small Business to Adopt More Cloud Solutions

The AICPA is in the cloud and wants you to join them, accounting industry. Being a preferred financial application for the AICPA can pay off so before you start ripping on accountants remember they (and especially their clients) have a metric shit ton of money.

The technology push came quite some time ago (XBRL anyone?) and CPAs are generally on top of it. You can’t get them to blog (Tracy Coenen can tell you more about that) but you can definitely get them worked into a lather over something that will make their lives easier.


Intacct is learning what being on the AICPA’s good side can do for one’s business.

CFO.com:

The American Institute of Certified Public Accountants is pushing to accelerate adoption of cloud solutions among its 350,000 members, focusing especially on small and midmarket companies as well as CPA firms. The AICPA’s first official endorsement of a cloud vendor, payroll solutions provider Paychex, came several years ago. But the institute has rolled out more such partnerships with increasing frequency, including with bill.com for invoice management and payment in 2008, financial management and accounting software maker Intacct a year ago, and tax-automation supplier Copanion at year-end 2009.

Intacct president and CEO Mike Braun was beside himself when the AICPA began pushing his product, acknowledging that an endorsement from them meant unprecedented reach in the industry. Awesome, the AICPA has finally joined with technology instead of fearing it. How dare I make broad generalizations about the AICPA’s conduct over the past few years?

A previous example of the AICPA’s tech phobia: It only took them 6 years to figure out what to do with BEC on the computerized CPA exam and they still aren’t sure how to treat it. No one is bitter but it’s a tad disturbing that CPAs were taking a professional licensure exam with paper and pencil up until 2003. They’ve had all this time to assemble BEC into something that isn’t the CPA exam’s junk drawer but still can’t manage to cobble together a storyline for the section.

One can only hope that the cloud can get the AICPA BoE to have an epiphany on that point. In the meantime, this is one hell of an endorsement so good for technology but even more credit is due to the AICPA for getting with 2008.

Then again, you have guys like GNU founder Richard Stallman and Oracle’s Larry Ellison who say cloud computing is “complete gibberish” and nothing but a slick marketing campaign for pricey third-party software. “Somebody is saying this is inevitable – and whenever you hear somebody saying that, it’s very likely to be a set of businesses campaigning to make it true,” Stallman told UK’s Guardian. Wait. Are you telling me the AICPA would engage in such shifty behavior just to make a few bucks?!

Nahhhhhh.

Will Small Business Support Obama on Alternative Energy?

This story is republished from CFOZone, where you’ll find news, analysis and professional networking tools for finance executives.

Looks like President Obama could have an unexpected ally in his push for alternative forms of energy: small business.

That, at least, is the conclusion of a study of 800 small business owners and their attitudes towards clean-energy policies conducted by several groups, including Small Business Majority, a small-business advocacy organization.

The study found that most small-business owners support having a clean-energy policy and think the right moves can jumpstart the economy and create jobs.


Specifically, 50 percent back clean energy and climate legislation that would “limit pollution, invest in clean-energy sources and encourage companies to use and develop clean-energy sources” and “put a price on carbon emissions from energy sources like coal and oil, so companies would have to pay if they release these emissions into the air.” And 61 percent feel that moving the country to adopt new, alternative forms of energy is a viable way to restart economic growth.

That’s in spite of the fact that nearly two-thirds think a new energy and climate policy would increase their costs–quite something, considering the really small size of most of the respondents, 79 percent of whom have five or fewer employees.

Still, the majority also would be more likely to support new legislation if they received government incentives to help reduce the costs of introducing energy-efficiency improvements. For example, 62 percent would support a bill if it included interest-free loans for upgrades. Fifty-two percent would be more likely to back legislation if they received grants or subsidies for energy improvements and if they had access to free training or consultation on how to profit from the emerging clean-energy industry.

Of course, other studies have come up with notably different conclusions. Early this year, for example, the National Federation of Independent Business (NFIB) found that 66 percent of small-business owners and managers oppose a federal cap-and-trade system.

But if Small Business Majority is correct, then, if he plays his cards right, Obama might wind up with significant small-business support at a time when he’s going to need it badly.