In January 2013, the three co-founders of Columbus, Ohio-based online accounting firm Upsourced Accounting faced a challenge that is not unique among many small business owners: how to be more efficient.
Launched by Ryan Watson, Ryan Baker, and Craig Baldwin in January 2012, Upsourced Accounting performs many of the same services as other accounting operations – management accounting, payroll, and tax – but does so exclusively on the Cloud. But even as clients and revenues started rolling in, the team was still struggling with how to reach the level of efficiency and, as an extension, profitability they expected.
“The primary culprit was the hours of back and forth e-mails we’d send to our clients, requesting, following up on, and gathering the documents we needed to perform their accounting work," Watson, co-founder and principal of Upsourced Accounting, told AccountingWEB. "We were losing half of our day playing air traffic control with our clients."
So the three former accountants decided to build a solution: a web application designed to structure and simplify communication for accountants and other professional knowledge workers. Enter Sqrl (pronounced “squirrel”), which the trio is touting as a “digital hunter-gatherer.”
Sqrl is a request engine that automates and manages routine communication and requests, eliminating the need to ever follow up with a client, according to Watson.
But before a single line of Sqrl’s code was written, the team first reached out to about fifty accounting firms to see if they were experiencing the same inefficiency problem as Upsourced Accounting and what solutions they were using.
“What came back was overwhelming feedback that, yes, our fellow accountants did in fact have our same problem,” said Watson, who is also CEO of Sqrl. “What’s more, they were all asking to use [our solution] when we were finished. At that moment, Sqrl stopped being just an internal tool for our accounting firm and became a broadly applicable product we would ultimately market to the industry at large.”
Approximately 200 accounting and professional service firms signed up to use the tool before it was launched publicly on January 29, Watson said. Since it was launched last week, an additional 300 individuals and firms have begun adopting and implementing Sqrl, he added.
Sqrl also recently raised $550,000 in seed funding, led by Cincinnati-based CincyTech, as well as Hyde Park Venture Partners and Vine Street Ventures.
“Raising that venture funding is critical to our success,” Watson said. “It provides our team with the operating capital to truly focus on making an amazing and fun-to-use product without having to prematurely focus on revenue. All of our investors are product people, and they know, like we know, that our number one priority is delivering a killer product. So that’s what we’re doing.”
CincyTech Principal Justin Thompson said in a written statement, “We believe the team has created an eloquent solution to the problem [of capturing and filing documents] and are well-capitalized to test their solution in the marketplace.”
But how does Sqrl work?
How Sqrl Works
In accounting firms, influencing the flow of client information – how and when it comes in – is called managing “the front door,” said John Venturella, chairman of tax services at Ohio-based CPA firm Clark Schaefer Hackett, which is among the Sqrl pilot users.
“The front door is paramount to efficiency,” he added. “The traditional way for an accounting professional to respond to trickling-in information is by manually tracking each item’s arrival, then repeatedly following up with the client to gauge how and when the rest will arrive. Minding the front door is time-consuming and inefficient.”
Sqrl efficiently manages the front door by allowing users to create, track, auto-remind, and gather requests for information from clients and groups of people, Watson said.
“Think of it as an online, fully automated PBC (provided by client) or tax organizer,” he added. “A user would log in and create a request for information from their client. The request is sent to a client or clients, specifies a specific due date, and outlines a series of specific items needed, like rows in a web form.”
Once the request is sent, the client receives a “friendly, well-formatted e-mail,” according to Watson. In one click, the client can open a secure browser window with a punch list of questions from his or her accountant.
“In that window, the client can answer questions and drag and drop files for each item,” he said. “If the client only answers some of the questions or doesn’t open the request at all, the system will send a friendly reminder in a few days. And only when the client provides a response for every item in the request, the accountant gets a friendly notification that all of their items are complete.
“Sqrl replaces the ten-point-bulleted e-mail or the massive Excel PBC traded back and forth via e-mail and automates the tracking, collecting, and reminding,” Watson noted. “Real, valuable, otherwise billable hours by everyone – from staff to partner – are spent buried in e-mails to gather documents and information to perform work. We give accountants that time back.”
He added that other portal solutions also house data and files on the Cloud, but they don’t solve the problem of getting that information from the client into the portal.
“That’s where we see the true pain-point for accountants, and it’s that process that Sqrl specifically solves,” Watson said.
What's next for Sqrl?
Plans for the Future
Sqrl’s initial market focus is small and regional accounting firms, with future plans to expand the tool for the broader professional services market, including financial advisors, lawyers, and digital agencies.
The initial feature set of Sqrl, which encompasses its core functionality, will be offered to users free of charge, Watson said. However, the team plans to roll out a set of three premium features over the next few months. Those features will include the following:
- Team/collaboration: “This will give users the ability to create an organization, invite other members of their organization into Sqrl, and begin collaborating with multiple users across specific projects,” Watson said. “So for instance, an audit manager could create a project for an audit engagement giving him or her visibility into all outstanding and gathered requests across that engagement.”
- White label: “Very shortly, we will begin offering our users the ability to customize the experience to their clients by uploading their own logo and customizing the way the e-mail notifications look and sound to their clients,” he said.
- Advanced security profiles: “We will begin providing our users the option to secure entire requests, specific items, or files within a request with advanced levels of authentication, such as multifactor authentication,” Watson said.
Although the creators of Sqrl do not have any financial or client goals for 2014, Watson said their primary objective is to “continue building a truly amazing product that solves this real problem for our users.”
“Achieving that goal will, by default, achieve any client or financial goals we could hope to reach,” he concluded.