- Hi there! I am Prashant Gupta, a Chartered Accountant, and CEO of Firmway.
- In 2015, Vivek Chandan and I were discussing how the audit confirmation processes are still manual and not automated and how auditors are downplayed by manual systems where clients mislead them with false information.
- We wondered how this can be eliminated and after a lot of brainstorming, in 2016, at the age of 23 Vivek, Jay Savla and I co-founded Firmway – a tech platform to automate account confirmation & reconciliation.
- We bootstrapped the startup from day one and did everything we could to built it up.
- The journey was definitely not easy but all the efforts paid off, as today the platform is connected to over 1,00,000+ businesses, reconciled INR 4,500 billion worth of entries, and identified INR 270 billion worth of discrepancies.
- Here is our startup journey.
Back Story: Why CA?
My dad is a Chartered Accountant (CA) and as a kid, I was impressed by the respect he used to get from everyone around him. He is the motivation for me to become a CA. Now in our family of 5, 4 of us are CAs!
Furthermore, I have been closely acquainted with the stock market since my childhood as my dad was a stockbroker. Sadly, I witnessed its wrath many times in my early days and always used to wonder how fraud happens for so long and the public is fooled with their life savings. That’s how I decided to pursue CA – to become an Auditor to help and detect fraud.
Just like me, Vivek Chandan my fellow CA and now co-founder studied in a vernacular medium school and was inspired by his uncle to become a CA. (Vivek and I did our articles at the same firm.)
Jay Savla, also a fellow CA and co-founder used to sit at his dad’s retail shop and help him out. Here he got acquainted with Accounting and decided to pursue CA.
We met each other during our CA journey and stayed friends.
The idea to start an Account Confirmation technology startup
After qualifying as a CA, Vivek joined KPMG in their Audit team.
While working there he mentioned how as an Audit Executive, he was asked to do a manual audit confirmation. The Audit Partner would state that we need to try for 100% responses to all the balance confirmations from the client’s customers, vendors, and banks as it helps auditors unearth any kind of fraud taking place in the company.
Needless to say, Vivek found it to be a very monotonous task requiring no application of mind. Here he had to manually prepare and courier letters, then continuously follow up on responses, track delivery through acknowledgment slips, prepare box files to collect paper responses and then summarize it in Excel. In today’s technology-driven world, this was unacceptable.
That’s when Vivek approached me with the idea “Can we Automate it?”.
Considering my vision to help the investor community and desire to be an entrepreneur, I said a big yes to this idea.
We then brainstormed a lot and realised that the billion-dollar Satyam scandal in 2009 was a perfect example of how fraud could have been detected in its nascent stage if the confirmation process were robust.
Further, we realized that it is estimated that a business loses ~10% of its net profit, every year, due to Bad Debts, Unclaimed GST Credits, TDS Mismatch, Hidden Charges, Duplicate Payments, Accounting Frauds, Long Collection Cycle, and so on due to lack of transparency with the customers and vendors.
This encouraged us to come up with a solution to create a platform to bring the desired transparency which would not only reduce frauds but will add a significant value to companies’ bottom line.
It was here that the idea of launching an Account confirmation and reconciliation tool was conceptualized.
But what next?
Brainstorming and finally launching the startup
Being CAs, we were very clear that a business does not survive on just good ideas.
So before establishing the startup, we did thorough research on market size, financial projections and prospects feedback to ascertain business viability.
We also ran the idea and plan through our mentors, the managing partner where we did our articles, and our closest friends.
That’s when our friends, Fanil Zakhariya and Jay Savla got so inspired by our idea that they decided to take the plunge with us on Firmway.
After 6 months’ worth of detailed research, feedback and advice, we quit our respective jobs and incorporated Firmway in 2016. We were only 23 years old then.
Funding our idea and finding our way with technology
After all this, we kept asking ourselves two questions: How do we fund our startup and how do we build the tech part of it?
On the funding part – we come from a thought process where we did not want to risk external investors’ money until we create a successful viable business model. As a result, we bootstrapped the business.
We divided roles – Vivek ran the CA firm to fund Firmway and I concentrated full-time on Firmway from day one. In addition, we invested all our personal savings and took some funds from our families to invest.
Now the tech part was tricky. Being CAs, we did not know anything about coding, and we learned early on that having a trustworthy tech guy is very important, or one could be easily fooled!
We met big tech companies and were frightened by the quotes we got. What now?
Luckily, a close friend of ours connected me to Krupal who had recently started his tech company and was looking at working with startups. We met him and knew that he was our guy. He then went on to build our entire tech stack.
However, the journey was not that simple – from changing requirements, late-night deliveries, fighting on change requests, beta testing, product launches, and pilots we finally launched our first tool – Audit Confirmation.
Growing our startup one step at a time and challenges on the way
Since we were automating a century-old compliance process, the first biggest challenge was educating the auditors about the legal validity of electronic confirmations.
The second challenge was dealing with clients’ sensitive data made security our first roadblock. Over time, we converted this roadblock as our sales point.
We also frequently came across the tradeoff between Revenue vs. Profitability. But our CA minds did not allow us to lose the focus on profitability even in the midst of rapid expansion.
Also when we just started we engaged with partners to do the sales for us but it didn’t work out well. After some time we realised that initially, it is the founders who need to do the sales and no one can do it for you. This move helped us to get our early customers.
Another challenge that we faced was figuring out why people are not coming on the platform and subscribing to it. It always needed a personal meeting to get them onboarded. We sooner realized that the B2B SaaS in India is still a long way to go.
But over time, all our efforts have started to pay off and we have received great support.
Increasing client base
Firmway.in is currently serving 400+ Corporates with notable clients like IPCA Labs, Viacom 18, Balmer Lawrie (PSU), Nykaa, Spykar, Velji Dosabhai, Lenskart, Times Network, Abbott, Ameya, Balaji Amines, among many.
Its simple automation tools like Smart Accounts Reconciliation tool, Auto Reconciling Customer ledgers, Vendor ledgers, GSTR 2A, 26 AS, etc. along with Receivable Management Tool, and Data Management tool are helping corporates increase their net profits by 10%.
Further, it is actively serving 20% of top Audit firms in India through its Audit Confirmation tool making their firms more compliant.
Recently we also have undergone an official arrangement with The Institute of Chartered Accountants of India for providing our tools to all Chartered Accountants globally and are listed on their website.
Timeline of our growth journey
- This is when Firmway was conceptualized.
- My business partners and I sat down to discuss the business feasibility of the idea.
- On the 19th of July, we incorporated & started development.
- A month later, on the 16th of August, we did our first hire.
- Furthermore, we got incubated by Zone Startups (JV between Ryerson University, Toronto and Bombay Stock Exchange Institute) and welcomed Jay Savla, our 3rd cofounder, on board.
- On the 17th of August, we bagged our first client. Thereafter, we got shortlisted by HDFC Bank at the 2017 HDFC digital innovation summit.
- Won the 2018 Mumbai Roadshow of Fintegrate Zone.
- Built our GST reconciliation software.
- Got incubated by the Institute of Chartered Accountants of India (ICAI).
- Became one of the 4 companies that won a commercial contract in the Viacom18 Startup Engagement Program. We restructured the business towards profitability.
- What a year! We will forever look back and be grateful!
- Built MSME status confirmation tool and bank confirmation tool. This was a big project and our wonderful team pulled it through with hard work and dedication.
- Got selected by Village Capital’s Finance Forward: South Asia in their cohort.
- Built customer collections, auto-reconciliation, and data management.
- Furthermore, we formed an official advisory board of CA Jignesh Kenia, CA Utpal Doshi and Krupal Solanki.
- We successfully closed an angel fundraise from CFOs and Audit Partners of Big 4s and large CA firms.
- Partnered with ICAI to take our products to all CAs globally.
A startup journey is lonely and you are creating paths as you move. There is no validation of whether you are doing it right or not. Do your thing and keep learning from your mistakes.
We chased fast expansion but learnt that without proper strategies, it will do more harm than good. Have adequate strategies in place.
Having the right mentors/advisors who have travelled the path before is a big help for young entrepreneurs. They will not do everything for you but will guide you almost every step of the way.
Do not rush the process. Success takes time and patience. Believe in the fact that you will eventually master your craft and be the best you can ever be, no matter how long it takes.
Trust your instinct. As much as you need external guidance, listening to yourself and believing in your ideas is highly recommended in entrepreneurship!
Now It’s Your Turn…
Have any questions for the team at Firmway? Comment and let them know.
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