September 17, 2014

Simple Mobile Banking App: Only for the Smallest Sole Proprietors

Small businesses are undergoing a revolution in how we handle and manage money.  Traditional banks are not going away anytime soon.  But we are in the midst of some long-term changes, and it’s a highly fragmented landscape today.

New solutions keep popping up that are not banks or even products sold to us by banks — yet they get us paid faster and manage our finances.  PayPal; Square and other mobile credit card readers; online and mobile invoicing and accounting apps — these are all solutions that didn’t exist or (as in the case of PayPal) were just getting off the ground 10 years ago.

With all the new solutions, we wondered if an unusual hybrid, called Simple, is a solution for small businesses.

Simple Wants to Replace Your Bank

Simple, which used to be known as BankSimple, touts itself as a replacement for a bank.  Simple is really a mobile app connected to some other pieces. In the FAQs it says:

“Simple is not a bank. Simple replaces your bank. Your funds live in FDIC-insured accounts with our partner bank, The Bancorp Bank, and we provide everything else.”

Simple is designed to pull together all your spending and income under one app, offering convenience.  For spending you get a Visa credit card.  You can arrange for direct deposit, and you get access to a national ATM network for cash transactions.

Simple recently launched a new detailed reporting feature that lets users sort their data and then view charts and other visuals. The new feature aims to help users understand their spending habits in much more detail than most online banking sites, while cutting out the need for third party money-management apps like Mint.com and HelloWallet. Here’s an example of a Simple chart:

 

The reports give customers a glimpse at their banking trends over time, like how often they make deposits and how their money is spent. Users can also break down their banking actions into categories like business expenses, personal items, restaurants and food, etc.

Simple – Mainly for Consumers and Not Small Businesses

Simple looks interesting for consumers.

But Simple is not a realistic solution for small businesses — unless you run a very small, one-person sole-proprietorship.   For instance, if you run a small crafting business with simple financial transactions — say, you accept money at craft shows for your products, and occasionally buy supplies with a credit card — it’s possible Simple could solve your banking and financial management needs.

Simple also may be an easy way to track business income and expenses separately from personal in your bank account.   Best practice, though, is to avoid commingling business and personal in the first place (you definitely need separate accounts if your business is a partnership, LLC or a corporation).

For most small businesses, Simple currently is not designed to meet your needs.   If you have employees or use a lot of outside contractors, or if you issue invoices, or if you make payments to a variety of sources, you need functions Simple doesn’t handle today.  Small businesses would still be faced with stitching together a hodgepodge of financial and accounting solutions.  That would defeat the purpose of using an all-in-one solution like Simple.

Simple went live to the public earlier this year.   Simple is invite-only at the moment, but prospective users can add their name to the waitlist on Simple’s website. Users must be U.S. residents aged 18 or over.  Simple is available only for iPhone.

1 Comment ▼

Anita Campbell - CEO


Anita Campbell Anita Campbell is the Founder and Publisher of Small Business Trends and has been following trends in small businesses since 2003. She is the owner of BizSugar, a social media site for small businesses, and also serves as CEO of TweakYourBiz.com.

One Reaction

  1. Anita: It is interesting to see how the financial transactions are changing from a “brick and mortar” bank office to on the go with your mobile phone. Do you think Simple will expand to other markets?

    Even we are getting into the “paperless office” in theory, you often still must have paper documents in your bookkeeping. Is it possible to print out accounting entry voucher documents from the Simple app?

Leave a Reply

Your email address will not be published. Required fields are marked *

*

You may use these HTML tags and attributes: <a href="" title=""> <abbr title=""> <acronym title=""> <b> <blockquote cite=""> <cite> <code> <del datetime=""> <em> <i> <q cite=""> <strike> <strong>



Compare your business to the industry - Try our new tool