There are lots of factors that determine if a startup business will be successful: the strength of its leadership team, the talent of its staff, the confidence of its investors, and the unique value proposition of its business model, just to name a few. One factor that is too often overlooked, however, is the consistency and quality of its bookkeeping. It is one of those things that people tend not to think about until it goes wrong, at which point it becomes all they can think about. Bad bookkeeping can sink a company before it even has a chance to fully develop, while good bookkeeping can ensure a smooth and efficient financial back office.
One company that has decidedly not overlooked the importance of bookkeeping is Pilot, a bookkeeping solutions provider that specializes in startup companies that may not be able to themselves afford the large accounting teams more established players have. The company's founders are veterans of the startup world, having created and sold two companies prior to this one. When developing their new solution, they thought hard about the kinds of things they wished they had when they were starting their companies, as managing the books had become an arduous task.
Waseem Daher, co-founder and CEO of Pilot, discussed his company's recent activities as well as its plans for the future.
How would you describe what your company does?
Daher: Pilot is the largest startup bookkeeping provider in the U.S., offering tax and CFO services on a platform that uniquely combines AI software with an elite team of accounting professionals. We found success focusing on an overlooked but critical area to startup success — the financial back office. SMB accounting is an enormous, underserved market — presenting a huge opportunity for growth with a massive $60 billion+ TAM [total addressable market]. Business owners and founders are experts at their business, not at finances. If their books are wrong, it can be a death sentence to the business. Similarly, small companies cannot afford large accounting teams to provide intelligent financial insights, putting entrepreneurs and startups at a disadvantage to compete with established players.
While other enterprise business services advanced in the last decade, bookkeeping remained stagnant as a manual job. Pilot is challenging the status quo by creating a platform that provides CEOs and founders with peace of mind their financial back office is being professionally handled and managed. Pilot is modernizing the industry by using the full potential of AI to bring "big company superpowers" to SMBs.
What is in your product line, and what is your flagship product?
Daher: Pilot has three main service offerings for their core customer base of startups and growing businesses: bookkeeping, CFO and tax services. We offer a one-stop shop for financial back office services that are customizable to every business based on growth stage and industry.
Our flagship product is our bookkeeping service, which delivers a multitude of monthly financial statements, including a balance sheet, income statement (P&L statement), cash flow statement, burn rate report and recurring expenses, etc., to ensure our customers have accurate and up-to-date insight into the financial health of their organization. Every customer using our bookkeeping services is paired with an in-house finance expert who takes the time to understand the client's business and their goals. Communication between the customer and our financial experts can be done through the Pilot Portal, an online website and app designed with our core value of transparency in mind that allows us to receive customers' bank statements at the start of every month and customers to receive their books at the end of the month.
Our comprehensive CFO services are built to improve financial planning and performance with ongoing analysis and guidance. This is a proactive approach that goes beyond simply reporting the numbers. Our CFO services help avoid costly financial missteps with ongoing, strategic support from clients' dedicated CFO. This service is especially fruitful for businesses looking to raise funds and scale. It allows customers full control and visibility over their finances as we create accurate forecasts and budgets set up to help each organization reach its growth milestones. By providing clear financials to help companies cut costs and maximize profits, we are able to share cash flow optimization and financial health guidance. This is done by running ongoing financial health reviews to identify and track trends — and maximize client runway.
At Pilot we tailor our tax preparation to each client, offering a range of services from filing income taxes, including federal and state income tax filing, 1099s, and Delaware Franchise Tax. Our tax services streamline the process, get all the customer's filings in on time, and allow the customer to get live status updates on their filings with their custom tax calendar. As part of this, we also offer our R&D credit service, which far more early-stage startups should be taking advantage of. For example, organizations with developer roles based in the U.S. may be eligible for a credit on your payroll taxes if they incur research and development costs in the U.S. We also help our clients navigate the complex tax filing process to determine eligibility and correctly apply.
What was the last big initiative or project your company completed?
Daher: Our most recent major product update was the introduction of Flux Insights, a feature that provides companies with the right tools and data systems to cultivate an efficient and effective back-office tech stack, reduce time spent on bookkeeping and drive business-critical decisions.
Each month, Flux Insights reports notable changes in monthly spending and builds an easy-to-read report explaining what happened. Customers can easily identify the transactions and vendors that contributed to the change, and the specific areas that might need a closer look. The feature also allows users to quickly compare spending to the previous month and over the past three months, making it easy to monitor spending trends and understand their company's expenses.
The technology uses the collective intelligence of thousands of customers to deliver insights traditional accounting has never offered, such as: "you are paying 50% more for web hosting than peers of your size and industry, and here's how to reduce your bill"; and "based on your payroll and spend data your small business is eligible for a $60,000 government credit and we can help you claim it."
What is the most exciting new thing you're working on?
Daher: In May of 2023, we published our inaugural
What differentiates your company from others similar to it? What makes you different? Unique, even?
Daher: Through a combination of human expertise and automation, we provide efficient, trusted and modern financial services. Pilot achieves this by combining the best of people and technology — instead of trying to cut the human out of the loop. We've created software for the bookkeepers to enable them to do a more accurate and reliable job.
Each customer gets a personal advisor and on-demand expert support — building an extra layer of customization on top of the automation, and providing dedicated support based on industry, size and stage. Our services include comprehensive finance support from strategy to operations, giving customers a complete finance team under one roof. We have the ability to grow with our clients as we match our engagement and level of support to your company's needs. We help you set up and maintain the back-office systems and processes needed to support you at every stage of your company's journey.
Unlike others in the space, our software seamlessly integrates directly with the billing, banking, expense and payroll systems customers already use to perform the monthly accounting close and deliver financial statements, such as QuickBooks, Gusto and Expensify. Unlike other bookkeeping firms, Pilot owns the entire integration process — not just the back end. When a system connection breaks, typically clients would have to reach out to their account ledger or financial system to get back up and running. In comparison, Pilot has built partnerships with these platforms allowing them to directly support customers in real-time.
What is the biggest challenge facing companies like yours right now? How do you work to address it?
Daher: As AI evolves, there is constantly a narrative being pushed that the technology will replace humans and remove their jobs. That is not the Pilot's goal. Our technology-assisted accountants are about 4x more productive than an unassisted accountant. Our biggest value prop for accountants is how much is time saved that results from using the software. Despite massive technology advancements in the past four decades, a majority of accounting firms are operating just as they did in the '80s. There is an opportunity to leverage technology and augment human accountants' expertise, not replace human beings. When my co-founders and I were starting our first company back in 2008, none of these products existed: Expensify, Gusto, Rippling, Stripe, Brex, Carta, Plaid, QuickBooks Online. Bank statements arrived at offices in an envelope, in the mail, and everything else was similarly painfully manual.
As more of these systems moved to the cloud and had APIs, the ease (and speed) with which we can manage a company's finances has improved considerably. Things that used to require an accountant to laboriously and manually key in information can now be done automatically and electronically.
Accounting involves a ton of highly structured data that computers are well suited to take care of, and building the right software can make 90-95% of the work incredibly efficient. But that last 5-10% is a critical judgment that you need a seasoned expert to help you make decisions on. Software has ultimately made it possible for us to let computers handle the most mechanical pieces of the process, leaving the experts to focus on things that are especially high-leverage or impactful.
What is the biggest tech challenge facing accountants today?
Daher: According to the
Pilot at a glance:
HQ: San Francisco, CA
Staff: 400
Customers served: 1700+
Customer transactions processed: 10 million last year alone
Sample customers: OpenAI, Lattice, Airtable, Scale
Valuation: Over $1 billion
This has been part of our regular Vendor Spotlight series. To see previous Vendor Spotlights,
