This Japanese entrepreneur is freeing small businesses from their accounting nightmares

Daisuke Sasaki, CEO and co-founder at freee.

Founded by Daisuke Sasaki and Ryu Yokoji in July 2012, freee aims to make bookkeeping and accounting quick and easy. While the idea seems simple, no one seems to have created an easy-to-use piece of accounting software for Japan.

For many years, Yayoi has been dominating the accounting software space with over 60 percent market share in Japan. Sasaki says that Yayoi follows the dual-entry bookkeeping method, which could prove to be difficult and unnecessary for many small businesses. It functions okay but it lacks invoicing or bank account integration. It is at best an upgraded Excel spreadsheet.

On the other hand, freee’s offer is so much more compelling. It is built on the cloud and is accessible via any web browser. Accounting entries are highly automated. For example, if a payment was made to Softbank, freee automatically turns it into a journal entry and classifies the expense as a telco billing. All the accountant has to do is to approve the bills.

Freee also helps small businesses generate tax reports in a few clicks for tax submissions to authorities. Automation is made possible because freee is integrated with over 1,600 banks in Japan.

(See: MergePay is Mint for business, making bookkeeping easier)

“Bank account integration has been around for many years but we are the first to use it for business,” says Sasaki. “We want small and medium businesses (SMBs) to just care about their expenses and invoices and leave the accounting job to the software.”

Business owners can also access freee on mobile.

Sasaki, a former Googler who was in charge of SMBs, realized that technology literacy in small businesses in Japan is really low. Many of them still use faxes along with pen and paper when doing their accounts.

“Something is wrong about Japan’s SMB market and I really want to solve the problem. There are no tech products to help a SMB that is affordable in the market,” adds Sasaki.

Since its official launch in March 2013, freee is now used by over 67,000 SMBs. Sasaki declined to reveal the number of paid users. Freee charges individual self-employees US$10 a month, and $20 for corporates.

Rocky start

When the company was founded, Sasaki faced two problems. First, his team was so passionate about the product that they cared too much about its look and feel.

“We discussed a lot how the product should look like. Maybe too much. In the first two months, we made no progress. We decided to stop and make decisions fast and things started to move.”