Expense reports are a special kind of hell. Employees are often stuck wondering when, if ever, they will get reimbursed. Managers and accountants, on the other hand, have to deal with extra paperwork and making sure that every meal, bar tab, and taxi fare was actually business-related. Y Combinator -backed startup Abacus wants to keep everyone from murdering each other with an app that “kills the expense report” instead.
Abacus lets employees submit transactions as soon as they happen by taking a photo of a receipt with its iOS or Android app or adding a credit card transaction. Managers can immediately approve expenses, which are synced to cloud accounting software like Quickbooks Online or Xero.
Reimbursements are automatically deposited each night into employees’ bank accounts. This means accountants can avoid the tedium of inputting individual expenses into payroll software or cutting separate checks. Since many companies try to streamline the process by dealing with expense reports in batches, this can force employees to wait a month or two before they finally get reimbursed.
The New York-based startup is competing in the same space as expense report software such as Concur and Expensify. Abacus founders Omar Qari, Ted Power, and Joshua Halickman say their service differentiates by making it easy for managers to approve expenses in real-time through its app, instead of in batches at their desks. It also has several features that help companies make sure that expenses are legitimate. For example, employees can check into restaurants and other venues, tag expenses to specific projects, or add them to accounting categories. Each expense also has a comment feature, so managers and employees can discuss it.
“You get a lot of context around the expense and then approving it takes three seconds. That’s how we make the experience for managers a lot better,” says Power.
While working at Foursquare together, Qari and Power got the opportunity to listen to hundreds of small businesses complain about problems like tracking payables. They saw that a lot of them were using spreadsheets to record expenses and writing checks to employees. The process wasn’t much better than the old-fashioned process of stuffing all receipts in an envelope and mailing it to an accountant.
Abacus founders say they want to make filing expense reports as easy as using Twitter. To use Abacus, managers and employees just need to sign up for an account, add their corporate and individual bank accounts, and download the app.
The initial customers that the startup wants to attract are businesses with five to 100 employees, including other startups. Companies can test out Abacus with a 30-day trial period. After that, it charges $5 per month for each employee who actively uses the service during that time.
“Once a company is beyond five employees, that is when they are starting to transition beyond founders getting together and using corporate cards. That’s when they start to feel the pain point,” says Qari. “When they hit 10 employees, it’s like a broken manual process. That’s when they start to benefit from the speed Abacus provides.”
Halickman, who was a mobile engineering manager at companies like Capital IQ and Etsy, says Abacus’ goal is to help entrepreneurs and small companies by letting them focus on the core of their business instead of paperwork.
“I realized at Etsy that the best thing we could do was make our sellers not spend any time on the site. They want to run a business, but they are trying to run it by being creative and doing their craft,” he says. “We want to make sure that the business-side stuff is on autopilot so they can concentrate on what they are doing.”