Several years ago, companies like Mint (since acquired by Intuit) and Wesabe (since shut up shop) defined personal financial management, a class of applications that give us some insight into our personal finances and help planning for future events. The genesis for these apps came from the realization that looking back at a series of bank accounts or a tax return was all very well, but it would do nothing to help individuals get a picture of their ability to afford their life a eek, a month or a year into the future. Hence PFM apps that drew insight from past events to create a view of the future.

A similar situation is starting to emerge in the business space. Business Financial Management (BFM) applications are starting to become apparent that aim to give businesses this same forward-looking view of their finances.

My interest in this space originated from my couple of decades experience owning and running small businesses and appreciating just how critical cashflow management can be – no matter how complex the accounting system a business uses, it’s still very much a backwards facing application that can do great things at showing how a business has done in the past, but is very limited in terms of forward looking value. My interest was also extended after I was appointed to the advisory board of billFLO, one company operating in this space.

The way I see it there are three distinct areas that a BFM application needs to cover off:

• Aggregation/Automation: This is the nuts and bolts of the application, ensuring that the app can get the right data in. This is where services like Yodlee, integration with banks and credit cards and machine readability of invoices comes in  but aggregation is much more complex for a BFM than for a PFM, there are many vehicles for receivables and payables; bills, invoices, timesheets, expense reports, credit cards etc, and within a business multiple people can spend or generate income on behalf of the company
• Presentation: To draw conclusions, an application needs to show the data in a way that makes sense for small business. Nice dashboards with graphical representations of future trend are key here
• Actionability: This is the crux. the application needs to provide something for the user to do with the data. For example if I’m the business is in a cash crunch, there is an opportunity to connect it to an appropriate invoice financer or banking institution

So there’s the description of this new class of business – it really is a growing trend, joining billFLO are companies like 60mo, BizzeeBee, Indinero, Profitably and PulseApp. I’d be interested to hear readers thoughts on this growing trend and the sector as a whole.

• Aaron Forth (Mint.com)
• Marc Hedlund (Wesabe)
• Justin Kitch (Intuit)
• Jeff Schultz (Bill.com)
• Mike McDerment (FreshBooks)

It was hard moderating a panel which was so polarised between the consumer and business space but notwithstanding that it went pretty well. The audience was a little jaded but the participants appeared to enjoy themselves and said they got something out of it. It was great to be around the real players in this space.

Check out the video below…..

I’ve just been told that joining the other panelists will be Justin Kitch, the head of SMB SaaS for Intuit. Kitch is formerly CEO of Homestead which was recently acquired by Intuit.

The entire panel now consists of;

• Aaron Forth from Mint
• Marc Hedlund from Wesabe
• Rene Lacerte from Bill
• Mike McDerment from Freshbooks
• Justin Kitch from Intuit

I’m more than keen to take questions from the "floor". Leave any you have as a comment on this post and I’ll try to fit them in to the panel. The panel occurs on Thursday, September 4, 2008, 2:15PM to 3:00PM (San Francisco time), and you should be able to follow it from the Office 2.0 website

The way I look at it the accounting world is still mired in a pre-release beta stage and there’s a new class of product which will drag it along, bypassing 1.0 and straight into the 2.0 world.

I was stoked to see that Xero has reacted to the buzz from its being awarded the distinction of being judged one of the top 10 UIs of the year. Their reaction was to announce that;

by early 2009 it will release a global version of its award-winning online accounting software

Now this is exciting on a number of levels – firstly as a proud Kiwi it’s great to see that we’ll have a global accounting solution created back here in New Zealand. Secondly Xero heralds the dawn of a new age of accounting. And it’s the dawn of this new age that gets me all fired up.

I was pleased then to be asked to moderate the Accounting 2.0 panel discussion at the upcoming Office 2.0 conference. The participants at the panel include;

• Aaron Forth (Mint.com)
• Marc Hedlund (Wesabe)
• Rene Lacerte (Bill.com)
• Mike McDerment (FreshBooks)

It’ll be great to assess each of these participants view as to where accounting is going – and their vision for what Accounting 2.0 will look like.