Pilot Bookkeeping and Bench Accounting are two of the top online financial management services available to tech startups and early-stage growth companies. Both are highly rated on G2 with Bench earning a 4.7 out of 5 user score and Pilot a 4.6. They can be a godsend to the entrepreneur who is just getting their business off the ground and doesn’t have the time to take care of their finances, nor the capital to pay for a dedicated bookkeeper or accountant.

Both services make use of AI and automation to categorize your business bank and credit card transactions to keep a running ledger with minimal human intervention. This approach helps keep their costs down.

However, the complexity of business finances exists on a spectrum. Pilot and Bench are great solutions when you’re in the pre-seed funding or initial seed funding stage of growing your startup, and your finances are still relatively cut and dry. Once you’re actively generating revenue and looking to earn your coveted Series A Funding, you’ve likely outgrown your relationship with these accounting solutions. It’s a story we’ve seen several times over when onboarding our clients.

Nickels and Dimes

Both Pilot and Bench start at a low monthly price point on one-year contracts. Most clients we have worked with started on their initial pricing plan, found it to be great for a while, but soon found the cost ballooning.

“We were getting nickeled and dimed to death” is an oft-repeated phrase we’ve heard from those who ended their relationship with Pilot and Bench. Both solutions offer extended or expanded services at an additional price point, and this ends up creeping up on people. Many customers who were initially happy with their relationship with these services quickly found their one-year contract and a-la-carte program add-ons they soon required financially untenable.

Pilot vs. Bench and Their Program Modules

To get a sense of the kinds of services both Pilot and Bench provide and when you might require an alternative, it’s worth taking a look at how both services compare:

Both Pilot and Bench offer bookkeeping services that link to your financial accounts and automatically categorize and register your transactions. Bench defaults to the simpler cash basis bookkeeping model for a wide range of small businesses that make less than $5 million in gross sales per year. Pilot offers the more complex accrual-based accounting models required by companies that do a lot more invoicing or subscription-based services or need to account for inventory.

As Pilot is explicitly geared towards rapidly-growing businesses, they also aim to act as a one-stop-shop for financial services with access to CFO Consultants and R&D Loan Applications. Pilot and Bench also offer tax filings and financial consulting services, but they cost extra as needed. Small businesses using Bench that initially only require cash basis accounting and then evolve towards an accrual basis also face sharp increases. These are just a couple of examples of the types of modules that would make your program that much more expensive.

When You Know You’ve Outgrown Pilot or Bench

Here at Greenough Group, we celebrate both Pilot and Bench for providing small startups a low-cost advantage to keep their finances in order without breaking the bank. As you scale upwards, however, your financial systems and reporting need to scale up as well.

Pilot and Bench do not take the place of a chartered accountant or ensure you adhere to Generally Accepted Accounting Principles (GAAP) standards, nor do they pretend to do so. In fact, the Pilot terms of service reads:

“The Service (including any communications you may have with Pilot personnel in connection with the Service) is not a substitute for and does not include legal, tax, financial, real estate, healthcare or accounting advice, and Pilot is not a public accounting firm… only a certified public accountant can attest (e.g., as part, of an audit) as to whether the results of the Service are compliant with GAAP, IFRS, or any other accounting standards or rules, and Pilot makes no representation or warranty with respect thereto.”

The following are a few situations that your startup will inevitably experience as you scale up that only a chartered accountant can handle:

1. When You Need to Adhere to GAAP Accounting Standards

GAAP standards were developed by the Financial Accounting Standards Board (FASB) to provide an accurate benchmark to weigh businesses against one another and prevent misleading reporting.

Many startups in the early seed and Series A stages fall into the GAAP Trap – when startups focus too heavily on acquiring investor capital and rapid growth instead of a more balanced approach that focuses on true profitability and shareholder return. GAAP standards help ensure all stakeholders have a realistic view of your finances and aren’t making “pie-in-the-sky” decisions.

To be in line with GAAP, a business must engage a CPA to provide accrual-based accounting and include ALL EXPLICIT COSTS of doing business in their financial statements, including operating expenses, depreciation, interest, and taxes.

Other operating costs that must be accounted for include:

  • Employee and Contractor Wages

  • Inventory

  • Raw materials

  • Transportation

  • Sales and marketing

  • Production

  • Overhead

2. When You Require Financial Forecasting

Financial forecasting projects your profitability and cash requirements so you can intelligently control expenses. These reports also help you develop your internal business processes, including accounting controls, as well as checks & balances to ensure you stay on track to meet your financial goals.

Cash flow statements are also critical toward predicting your liquidity down the road. These reports incorporate net income, long term assets, stockholder equity, and liabilities.

3. When You’re Looking to Scale Into New Markets

Dramatically scaling your business is exciting, but also entails a lot of financial rigamarole that neither Pilot nor Bench is equipped to handle. An example of some of these tasks that an accountant can help with include:

  • Determining the most cost-efficient tax structure

  • Applying for multi-state registrations if applicable

  • Helping obtain financing and apply for loans

  • Performing financial forecasts and financial risk assessment

4. When You Need Help Overcoming Financial Hurdles

Finally, Pilot and Bench can’t tell you where you might need to make transformative changes in your business to help shore up your financial situation. The earlier you bring in expert advice, the easier it will be to get back on the path to financial health. Some of these issues include:

  • Poor cash flow and profitability

  • High business overhead

  • High client churn

  • Inability to raise capital

  • Debt management and loan repayment

San Francisco startups look to GCG for expert accounting advice

Greenough Group’s client accounting services and CFO consulting services are highly sought by both startups and Fortune 500 companies alike. With over 20 years and 800 companies worth of experience, we have helped many clients transition away from Pilot and Bench towards a more robust financial framework by implementing leading financial systems and processes.

GCG is the preferred outsourced accounting firm of executive Tom Rowley, who has utilized GCG’s services in several of his ventures:  “I’ve brought GCG into my last four startups. Getting finance running smoothly, as quickly as possible, allows me to focus on building the business. Hiring GCG is one of the first things I do.”

Our reputation for accuracy, senior attention, and exceptional client service has made us one of the financial community’s most highly recommended back-office services firms. Contact us today for a free consultation and learn how we can help you transform your business.