Frequently asked questions

Our bookkeeping and tax plans are based on an annual subscription model with transparent pricing that scales with your expense rate and your business needs such as connected institutions, bills, and invoices. See our pricing page for more details.

Yes! Support is included in your plan. Your dedicated finance expert is happy to answer any questions you might have. We strive to respond to inquiries in a business day or less. See our pricing page for more details.

Yes, we’re happy to provide this support as an additional service. Please contact your sales rep for details.

Cash bookkeeping only tracks when money enters or leaves a bank account. Accrual bookkeeping is a more sophisticated approach that records when the money was earned or owed. Most larger companies use accrual and Pilot does accrual from day one so there’s no painful transition later.

We have over a thousand customers ranging in all sizes and spanning many industries. We specialize in working with high-growth technology startups, ecommerce providers, professional services, non–profits and more. Get in touch with us to see if Pilot is the right fit for you.

We have three requirements that allow us to deliver the most accurate books for your business.

1. Electronic transaction access
2. Expense reporting software
3. No commingling of personal expenses
   

We can support you if your company is a US entity, no matter where you are based in the world. We can also provide US entities with foreign subsidiaries with consolidated reporting. As of now, we do not support foreign entities.

They are not included by default, but you can add them to any plan. Please ask your sales rep for details.

Yes, we support bookkeeping for companies who’ve been awarded SBIR grants. Pilot has deep expertise in working with complex SBIR bookkeeping requirements, such as dealing with indirect costs, unallowable expenses, and more.

Pilot does all of its bookkeeping in QuickBooks Online because it offers a number of advantages:

• Seamless tax prep. Virtually every tax preparer in the US knows how to work with QuickBooks. You’ll have the freedom to choose any tax preparer you want.
• Industry standard. In addition to tax preparers, most other financial professionals (e.g., attorneys, bankers, and venture capitalists) all know how to work with QuickBooks. Again, this gives you the most freedom when making financial decisions.
• Data portability. QuickBooks means you’re not locked in. If you ever decide to move on from Pilot, your data goes with you, in a format that is immediately useful.

Yes, we can help you transition your books over to QBO. As part of our onboarding process, we’ll make monthly journal entries in Quickbooks from your monthly account totals in Xero (for both the balance sheet and the P&L/income statement) going back to the beginning of the year.

If your business has less than $5 million in annual revenue, and it's been less than five (5) years since your first gross receipts/sales, you can frequently reduce your Social Security Payroll tax liability under the PATH Act R&D credit. If you do not qualify under the PATH Act R&D Credit, you can take regular R&D Credit against income taxes (rather than against payroll taxes).

Qualifying R&D expenses and/or activities are those which pass this four-part test:

• Technical uncertainty. The activity is performed to eliminate technical uncertainty about the development or improvement of a product or process, which includes computer software, techniques, formulas, and inventions.
• Process of experimentation. The activities include some process of experimentation undertaken to eliminate or resolve a technical uncertainty. This process involves an evaluation of alternative solutions or approaches and is performed through modeling, simulation, systematic trial and error, or other methods.
• Technological in nature. The process of experimentation relies on the hard sciences, such as engineering, physics, chemistry, biology, or computer science.
• Qualified purpose. The purpose of the activity must be to create a new or improved product or process, including computer software, that results in increased performance, function, reliability, or quality.

Unlimited, if applying the R&D credit against income taxes. These credits can range between 5% and 15% of qualifying R&D costs. If taking the PATH Act R&D credit, a company can receive up to $250k^* against payroll taxes and take the remainder against income taxes.

As an example, for an unprofitable 5-person tech startup that has less than $5M in annual revenue with roughly 80% of time being spent on qualifying R&D activities, and average salary of $100k/year, the credit might be between $20k to $60k. Pilot’s fee is a small percentage of the total qualifying R&D expense and easily pays for itself by securing the R&D Tax Credit for you.

^{*$500,000 for 2023 tax year, $250,000 for 2022 tax year}

Yes, we can help you file an amended tax return to claim the R&D credit for previously filed Income Tax returns (past 3 years), but you cannot take the PATH Act R&D credit on an amended tax return.

We help businesses with all aspects of claiming these R&D Tax Credits. Pilot will:

• Identify and calculate qualifying R&D expenses
• Prepare Forms 6765, 8974, and 941 to gain IRS approval of credit. If you use Pilot Tax, we’ll file on your behalf as well.
• Prepare all required supporting technical and financial documentation, including documentation of research time, R&D payroll expenses, etc. This is an important pre-requisite to support an IRS audit in case that happens.
• Coordinate with your tax preparer, payroll provider, and accountant to ensure your books and taxes are accurate
• Continually ensure the credit is applied correctly against your payroll liabilities
• Email and phone support with R&D credit experts

Yes, we can help support you in the case of an audit. For more details, please contact us.

Pilot recommends anyone who claims the R&D credit to get a study done. An R&D study determines the total amount the business should claim and collects the necessary documentation to support that claim.

When filing for the R&D tax credit, you must submit the relevant tax forms to the IRS. However, you must also have the technical and financial justification of what you were claiming prepared in case the IRS audits your claim. If the IRS audits the claim and you can’t produce technical and financial evidence behind what you claimed, you will need to return the money and potentially pay a penalty. The R&D Tax program is on the IRS’s "Dirty Dozen List". Once you’ve been audited, the IRS can also audit your claims for up to 7 years prior – so you need to make sure that each year’s claim has proper and thorough substantiation.

Yes, we’ll calculate the R&D tax credits and provide the necessary documentation for your tax preparer to file. If you use Pilot Tax, we’ll take care of the full process and file the necessary tax paperwork on your behalf as well.

33 states currently offer an R&D credit. Generally, the states follow federal guidelines on what constitutes qualified R&D expenditures with few exceptions. Pilot will provide guidance on state level credits. For example, the CA R&D credit is non-refundable which means it cannot be taken against payroll tax. Work must be done in CA to be considered qualified and CA credits can carry forward indefinitely until exhausted.

Online retailer and consumer companies face challenges around managing physical goods (such as COGS, inventory, supply chain, fulfillment), and often have complex selling channels (such as multiple platforms, differing fee and payout structures, and multiple payment processors). They also tend to have large transaction volumes. All of these things affect your books, which is why it’s important to have a bookkeeper with a strong background in your industry.

Pilot serves consumer and retail customers of all shapes and sizes, across different sectors (food and beverage, apparel, hard goods) and business models (direct-to-consumer and multi-channel retailers, manufacturers, wholesalers).

We have customers using every major e-commerce platform, including Shopify, Amazon, WooCommerce, Magento, BigCommerce, and Salesforce Commerce Cloud.

Pilot makes inventory updates in your financial statements every month based on data provided either directly by you or by the source of truth for your inventory, such as an inventory management system (e.g., TradeGecko / Quickbooks Commerce).

There are several different components that make up Cost of Goods Sold (COGS) for a typical Consumer and Retail company:

For product COGS (i.e., the actual cost of the items sold), we base our calculations on inventory and fulfillment information you share with us.
For Merchant Fees and Shipping Costs, we track your metrics automatically and categorize your variable expenses in COGS.
For all other variable costs you wish to track as COGS (e.g., Storage Costs), we work with you to create accounts and categorization rules to implement this for your business.

We work with a variety of inventory management solutions but recommend TradeGecko/Quickbooks Commerce and Skubana based on their simplicity of use and ability to scale. Read more about our recommended technology stack for growing retailers here.

Our automation pulls this information directly from your store, ensuring you have accurate figures for both items month–over–month.

Yes, Pilot can separate our merchant fees of all types in your Profit and Loss statements.

Yes, Pilot can break out revenue and costs in your P&L by product line and/or channel. Depending on the degree of granularity you’d like to capture, we recommend doing this in the P&L itself for simpler break-outs (e.g., revenue by channel) and via a detailed KPI dashboard for more complex analysis (e.g., monthly profitability by SKU).

For simple consumer and retail companies that have more than 4 financial institutions, we offer the option of adding additional financial institutions to your Core subscription for a flat fee.

We don’t currently offer sales tax services, but can recommend a number of software and service providers depending on your needs.

Yes, we offer KPI tracking and dashboards through CFO Services. For Consumer & Retail clients, our CFO Services team typically helps track KPIs such as marketing metrics throughout the customer funnel, LTV/CAC, inventory turns, and profitability across the product portfolio.

Yes, through the Fundraising Strategy & Support package offered by our CFO Services. Our experienced CFOs can assist with strategy, pitch narrative and deck development, financial and market analyses, and more.