FreshBooks, a Toronto-based invoice startup that formed back in 2004, has released a set of aggregated business data to the public. The data allows businesses to see how they stack up against other companies in their fields on a number of criteria, including the amount of revenue generated from new versus recurring clients and overall invoice totals. Professions available for reference include Engineering, IT Services, Legal Offices, and some more obscure professions like “Musician”. FreshBooks intends to release these reports on a quarterly basis from now on (you can access the current report here.
FreshBooks generates the reports based on opt-in information the service began asking for in 2006. As an invoice service the company has been able to accrue data on over 500,000 members, which gives the data credibility. That said, the basic reports presented seem to be very general – it would be nice if you could hone in on reports from a specific state, as rates for many professions vary widely in different regions.
OK
Yeah, but you’d have to be careful, for example, if you’re one of three Widget Factories in your state, narrowing by state could reveal a lot of (I assume) confidential information about your competition.
It’s good Idea.
http://www.oxyshopping.com
another example of the amount of data that can be found, held, organised and used on the web
It seems more like a product feature to me, ripe for an acquisition by one of the new technology payroll folks like PayCycle (http://www.paycycle.com).
Well i hope that FreshBooks does well. The market could stand to use more competition and help keep Intuit on its toes.
Smart use of company data for PR. SurePayroll, the online payroll service we use, was first to do this with their monthly Small Business Scorecard report (ADP later copied them). They are one of the first SaaS companies and a great payroll service if you need one. BizBuySell also does a great job of this with their quarterly reports on business-for-sale transactions. This data-driven journalism is a relatively new trend, but I think it’s very powerful. Data doesn’t usually tell lies, so it’s a great source for news.
In a few years, I’m sure investors will use this data to say to a particular company “you are paying your engineers/lawyers/musician 20% more than average and you need to get within the norm– it doesn’t matter that they are better, you are out of line”. While I think that transparency in these regards is generally speaking a very good thing I also imagine that exposing more and more of this data over time will have unexpected consequences. Some activities of companies are not quantifiably comparable to the activities of others. The market deals with this through implicit knowledge. But if explicit knowledge can become over time so available and so ubiquitous that implicit knowledge over time degrades in quality (like the voter databases of the GOP in Virginia- they didn’t rely on them for so many years that they didn’t feel the need to maintain them- now they are in disrepair). My worry in trying to create statistically driven industry standards is that the qualitative differences between good and bad businesses, even when they are important, fail to be appreciated. It requires ecosystems, social networks among investors, and a sharp set of eyes on all sides to sort and separate the wheat from the chaff.
Bobby Fishkin
CEO reframeit.com
Where is the public data? When you write, please be clear where the source of your information. I hate people who write something and can’t back them up.
As an advocate of transparency, I encourage such initiatives.
I think that this is going to be useful for all of us business owners as well as workers.
I see no such data. Just the general categories of:
All Industries
Web Professionals
IT Services
Design
Marketing
Fyi, we recently released the ability to synchronize FreshBooks invoices and payments with our Bootstrap online accounting software (http://gobootstrap.com.) Now users can track their deductions and net profit to go with their income.
Kevin Reeth
CEO & Co-Founder, GoBootstrap.com
I’m starting to see more of these biz models as invoicing and revenue recognition become more complex (and a pain in the ass).
What if your startups has no customers and no revenue? How can I use FreshBooks then?
–Cyprus Gang