Wednesday, November 5, 2014

Xero acquires Seattle's Monchilla in $4.1 USD million deal / Startup Spotlight: Monchilla looks to take on Quickbooks

Leon Spencer for ZD Net writes: New Zealand-headquartered cloud accounting software provider Xero is expecting to boost its US online payroll presence with the acquisition of Seattle-based cloud accounting startup Monchilla.
The deal sees Xero cough up $4.13 million cash for the online payroll and cloud accounting software provider, along with 238,490 Xero Limited ordinary shares.
At the time of writing, Xero Limited's New Zealand Stock Exchange-listed ordinary shares were valued at NZ$17.10 each, or about $3,146,600 — bringing the total value of the deal to around $7.27 million.
The New Zealand company, which is dual-listed publicly in New Zealand and Australia, told investors that it had bought Monchilla from its founders, Jack Couch and Nanjuan Shi, and would continue to support the cloud startup's current customers.
However, Xero also said that Monchilla customers would eventually be transitioned from the US company's platform to the Xero platform, netting the New Zealand company a bevy of new US Xero users.
Couch and Shi will remain involved with the operation, and are expected to complement Xero's US product development teams and support its payroll strategy to further its growth in the market.
"We're thrilled to join the Xero team and work together to deliver a world-class, online payroll solution for small businesses in the US market," said Monchilla co-founder and CEO Jack Couch. [snip]  The article continues @ ZD Net, click here to continue reading....
We've previously posted this on ExactCPA about Monchilla

Monchilla offers new cloud-based accounting and payroll option / Startup Spotlight: Monchilla looks to take on Quickbooks with new accounting service / Wave Accounting vs PlanGuru Basic vs Monchilla

We keep a close on on the Quickbooks alternatives and are familiar with ContaAzul & Cheqbook and indeed have commented about them here.  Today someone suggested we look at "Monchilla" - and as we have never heard of "Monchilla"....we are!   Isaac M. O'Bannon for CPA Practice Advisorwrites: A new, completely cloud-based, accounting system is about to give small business owners an alternative to QuickBooks, and some experts think even public accountants will prefer it over other bookkeeping systems.

Monchilla.com announced its beta release at the 2012 Sleeter Accounting Solutions Conference. The Monchilla.com beta includes an entire suite of services including small business accounting, payroll, invoicing, billing, time tracking, electronic payments, and direct deposit for employees.
“We are thrilled to share Monchilla.com with the world.  We know this will help thousands of small businesses, bookkeepers and accountants manage their businesses better and with a lot less work” said Jack Couch, Monchilla.com’s CEO. “By taking advantage of new technology, Monchilla.com makes your life easier, but it also gives you a great dashboard that gives you insight into the health of your business.”
Monchilla.com downloads transactions from your bank and uses repeating transactions to provide future financial data while reducing time spent keying in transactions. Large businesses have separate departments to deal with payroll, financial accounting (historical records) and management accounting (forward looking accounting). The idea behind Monchilla is to bring all of these together into one package so that small businesses can get some of the benefits big businesses already enjoy.  
Monchilla.com also provides something it calls “turn-by-turn business navigation.” This allows users to do “what-if” analysis to see how your business will be affected if you hire a new employee or take on a small business loan. The “write-up” feature is also unusual for a cloud solution, as it allows fast, keyboard only data entry so accountants can quickly update the books before filing taxes.
Randy Johnston, a widely-respected thought leader for the profession and one of the most popular speakers at ASC2012, said “One of the interesting things about Monchilla.com is that it has payroll integrated at such a low cost. I think this and its management accounting provide a solid revenue opportunity to small business consultants and accountants.”  
For businesses that would like to keep QuickBooks they can still take advantage of the impressive dashboard by simply uploading their QuickBooks backup file. The Monchilla dashboard has all of the major financial statements (income, cashflow, balance sheet, etc) including a very interesting cash balance report that will alert you to a cash shortfall. Because it is completely cloud based, it is easy to share these reports with clients or other support staff.
Monchilla’s employee time tracking features can also be used with QuickBooks - good news for small businesses that have been forced to pay for a third party time tracking solution after Intuit discontinued it’s time tracking solution in December.
Monchilla.com is a self funded startup of 11 that already boasts over 1000 small businesses that signed up through it’s inviation only beta.

During Beta testing, Monchilla.com is available free of charge by going to www.monchilla.com and clicking on the “sign-up for a free account” button. When Monchilla releases the final version early next year it will charge users $5 per employee per month for payroll. Businesses that don’t use the payroll service will not be charged. According to the Monchilla.com website, the average company of five will save $800 pear year when switching from QuickBooks.

Startup Spotlight: Monchilla looks to take on Quickbooks with new accounting service


Mikey Tom for GeekWire.com writes: If you’ve ever taken an accounting course or have run your own business, you know that accounting is a huge pain.  Sadly, it’s a necessary evil for every business.  But Monchilla is looking to make it a a little more tolerable.
The self-funded team of eleven has spent the past 2.5 years building an accounting platform from scratch, including features such as payroll, time tracking, invoicing, electronic payments and bank integration. It’s biggest rival is Intuit’s Quickbooks, not to mention some up-and-coming startups such as IndineroXero and WaveAccounting.
In fact, the company formed because the founders struggled with using Quickbooks in their own software startup and weren’t too impressed when they gave other services a try. ”We had used Quickbooks, but it made us hate our lives because it is so hard to use,” said Monchilla’s Nanjuan Shi.
We caught up Monchilla’s Shi and Jack Couch for this installment of Startup Spotlight:
Explain what you do so our parents can understand it : “We make accounting easy so business owners can make smarter decisions.”
Inspiration hit us when: “We were four guys writing code and we had a full time bookkeeper just to manage payroll and invoice customers and we still didn’t have a clue how much money we would have in three months.  We looked at everything and nothing worked for us.  Then we talked to all of our friends that owned business and found out some of them already made business killing mistakes because they couldn’t see clearly.  That’s when we knew we could do something that would make a big difference.”
VC, Angel or Bootstrap: “Self funded.  This isn’t our first start-up and some of those earlier successes have given us the capital to build Monchilla. We are open to outside funding, we just haven’t needed it yet.”
Our ‘secret sauce’ is: “We completely rethought double-entry bookkeeping to make it more intuitive without sacrificing any benefits.  Its all ham and no burger (we promise we are better at accounting than jokes).”
The smartest move we’ve made so far: “ We tackled the hardest problems first.  Instead of worrying about powder blue versus periwinkle we worked hard for 2+ years on building an engine that could handle everything from payroll taxes to depreciation and now that is paying off.
The biggest mistake we’ve made so far: “When we first started we thought we could just build additional features on top of QuickBooks and we spent several months and a lot of money trying to make that work.  Eventually we realized it was like trying to build a house on sand because every version update would break us and the database wasn’t normalized.  We really didn’t want to have to start from scratch, but we should have figured that out sooner.”
Would you rather have Gates, Jobs, Zuckerberg or Bezos in your corner:“Bezos because he has a very similar outlook on business and the good that it can accomplish, which is what drives us to push through the difficult stuff.  Helping every small business owner be more successful is the most significant thing we can do to make the world a better place and I think Bezos would agree.  I’m also not sure Bill doesn’t hold a grudge for the time he tripped on my console cable and my laptop slid across my desk and hit him on the way down – I know his security guys are still keeping an eye on me.”
Our world domination strategy starts when: “When small business owners have more fun running their businesses because of Monchilla.  We have already seen the kind of gratitude and word of mouth recommendations that comes from that and we can’t wait
to see that happen on a larger scale.”
Rivals should fear us because: “We are ready to spend the next 20 years attacking this problem with everything we have.  And we have the only online service that actually does everything a business owner would expect, including payroll and time tracking, built in.”
We are truly unique because: “We love accounting.  Many accountants don’t even love accounting, but for us there is something amazing about the moment when everything is clear and people are empowered to make smart moves.  As business owners we have sailed the same stormy seas as our customers so we have a good grasp of what is helpful and what isn’t.”
The biggest hurdle we’ve overcome is: “Finding the right team of fanatics.  Software people that are truly passionate about accounting are few and far between.
What’s the one piece of advice you’d give to other entrepreneurs just starting out: “ First, care about other people.  Then find a problem that is so irritating to you that you are willing to sacrifice to solve it for them.  When we started we could see all the time, money and life wasted because of bad tools and we couldn’t help but do something.  We knew we could fix it and we felt like it would have been wrong to ignore it.  Find something like that and you will enjoy getting out of bed and busting your butt.

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