ScaleFactor AI accountancy software uses humans to process data

Occurred: July 2020

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A US start-up claiming to deliver an AI-based, real-time bookkeeping tool in fact relied on traditional bookkeepers and hired a Filipino contract accounting firm to process customer data.

Austin, Texas-based ScaleFactor built AI-based accounting automation and book-keeping software for small businesses that integrated with Quickbooks and Xero in such a way that it would 'revolutionise accounting'.

However, the firm often relied on traditional bookkeepers and had hired a traditional contract accounting company in the Philippines, with customers receiving monthly statements rather than the real-time data they were promised, according to Forbes.

Established in 2014, ScaleFactor closed in August 2020, primarily blaming the COVID-19 pandemic. However, customers complained its products had failed to work properly and that it had consistently over-promised and under-delivered. 

Developer: ScaleFactor
Country: USA
Sector: Business/professional services  
Purpose: Automate book-keeping, financial forecasts
Technology: Automation
Issue: Business model; Effectiveness/value
Transparency: Marketing

Page info
Type: Issue
Published: March 2023
Last updated: December 2023