QuickBooks

What the QuickBooks connection does

Connect QuickBooks Online and Founderpath reads your monthly profit and loss statement, balance sheet and statement of cash flows, then calculates the margins, burn and runway its underwriting uses. Founderpath only reads from QuickBooks, and the data refreshes about every four days.

What happens when you connect QuickBooks

1. Authorize in Intuit's window

Start from the QuickBooks card on the integrations page of your Founderpath account and click Connect to QuickBooks. Intuit opens its own authorization window, where you choose the QuickBooks Online company to share. Founderpath never sees your Intuit password.

QuickBooks apps use Intuit's accounting scope, which would allow changes. Founderpath does not make any: it only reads reports and accounts, and never creates or edits transactions, invoices or settings.

2. Founderpath imports your reports

The first import goes back up to 10 years and reads, month by month on an accrual basis:

• Profit and loss statement
• Balance sheet
• Statement of cash flows, as QuickBooks reports it
• Chart of accounts

The first import also reads a sales-by-customer report for the last 12 months and your customer list, once. Later refreshes cover the four items above.

Amounts in other currencies are converted to US dollars at monthly exchange rates.

3. Your financial metrics are calculated

Founderpath sorts each line of your books into standard categories and calculates:

• Revenue: total revenue, split into recurring and one-time by line name. Lines such as setup, implementation, training or hardware count as one-time.
• Profitability: cost of goods sold, gross profit and margin, operating expenses, EBITDA and net income.
• Balance sheet: cash, accounts receivable, accounts payable, deferred revenue, other assets and liabilities, and equity, at each month end.
• Burn and runway: burn as free cash flow, built from net income, depreciation, changes in working capital including deferred revenue, and capital spending. Runway is cash divided by your average burn over the last three months.

4. You get an offer, and the data stays current

Founderpath aims to make a funding offer within 24-48 hours of connecting your data, with full closure within 4 weeks. After the first import, QuickBooks data refreshes automatically about every four days. It is not a real-time feed.

What the QuickBooks connection does not cover

• QuickBooks Desktop is not supported. Upload a monthly profit and loss statement and balance sheet instead.
• Receivables and payables aging is not imported. Receivables and payables are read as month-end balances.
• Ratios such as current ratio or cash conversion cycle are not calculated from QuickBooks.
• QuickBooks Payroll is a separate product with its own status page. Connecting QuickBooks Online does not import payroll.
• Several companies are supported: use Add QuickBooks Company to link each one.
• Disconnecting removes the connection, recalculates your metrics without it and revokes Founderpath's Intuit authorization.

QuickBooks plus billing and bank data

Your books show whether the business is profitable and how long its cash lasts. Founderpath funds software companies from $10K in monthly recurring revenue, so most founders connect QuickBooks alongside:

• Subscription metrics from Stripe, Chargebee, Recurly or Paddle
• Cash balances and transactions from bank connections

If your books are in Xero, connect that instead.