Automating bookkeeping: another one bites the dust

[Michael Plaks]

Here is the sad story of another ambitious (or maybe reckless is a better word) start-up attempting to automate bookkeeping and predictably falling on their faces. But not before burning thru millions of venture capital and screwing hundreds of businesses falling victim to their sales pitch. 
https://www.forbes.com/sites/davidjeans/2020/07/20/scalefactor-raised-100-million-in-a-year-then-blamed-covid-19-for-its-demise-employees-say-it-had-much-bigger-problems/

Some points worth highlighting:

- "Instead of software producing financial statements, dozens of accountants did most of it manually from ScaleFactor’s Austin headquarters or from an outsourcing office in the Philippines"

- "Some customers say they received books filled with errors, and were forced to re-hire accountants, or clean up the mess themselves"

- The annual  contracts mentioned in the article were $23,000 for an e-commerce business and $6,000 (and triple that amount at renewal) for a coffee shop. You can hire experienced personalized help for less.

- "ScaleFactor would pivot to a marketplace model that connected traditional accountants with their clients." This is what everybody else is doing already, including Intuit.

- "At the end of the day... customers were craving a person, rather than a computer to do their accounting." As could have been discovered without $100 mil "invested"

A good lesson for all business owners, I hope.