Japanese households have a tradition of household bookkeeping. A family's revenue and expenditure records have long been in the form of paper books. Due to the tedious accounting process, complicated payment details and easy loss of paper books, few people can have complete and systematic statistics on their expenditure details. Japan's personal bank accounts are also scattered, with an average of three to four bank cards per person. In response, Money Forward launched a cloud-based personal financial management software solution in December 2012.
Since 2009, cloud computing has been widely accessible within society. SMEs (small and medium-sized enterprises) transfer financial data from the local servers to the cloud, which can effectively reduce costs and increase efficiency. Although the Japanese government has vigorously promoted the information construction of accounting, the penetration of cloud accounting in businesses is still low. According to a survey conducted by Mitsubishi Research Institute in July 2010, out of 10,000 employees surveyed who were aged between 20 and 69 and worked for SMEs with less than 300 employees, over 80 percent of these employees had not used cloud accounting or conducted relevant research into cloud services.
Enterprises with certain sizes and strengths have dedicated financial departments and accountants with rich experience. Cloud accounting services have been slow to respond to these needs of these enterprises, to the need manually modified errors if they occur, has tended to reduce the efficiency and bring about security risks for data cloud storage. As a result, few large-scale enterprises used cloud accounting services at this time.
However, SMEs are in their infancy and have relatively small business scale. Using cloud accounting services can save considerable money in development and labor costs for SMEs. Money Forward launched MF Cloud Accounting SaaS (Software as a Service) in November 2013 to target the SME sector.
Company Profile
Money Forward is a company that provides financial management services for individual users and cloud computing software services for SMEs. The company has developed Money Forward, software that manages personal revenue and expenditure details, and MF Cloud Series, cloud accounting software that focuses on the automation for SMEs. Money Forward can help users to clearly understand details of their revenue and expenditure and save money through the statistical sorting of personal revenue and expenditure data. The MF Cloud Series provides cloud accounting services for SMEs and enable SMEs to obtain accounting services while reducing expensive labor and equipment costs.
Money Forward currently employs 230 people and received an Entrepreneur Award from the U.S. Embassy and the Japanese Entrepreneurship Award in 2014. At present, Money Forward's personal financial management software has 5 million users, with the largest market share in personal financial management software industry in Japan. The MF Cloud Series has 500,000 corporate users currently and has been docked more than 2,000 auditors.
Yosuke Tsuji, founder of Money Forward, graduated from Kyoto University in 2001 and obtained an MBA from the Wharton School of the University of Pennsylvania in 2011. Previously, he worked for Sony, Money Securities (one of the largest online securities firms in Japan), focusing on marketing and business development. Yosuke founded Money Forward in 2012 and has been CEO ever since.
Funding Rounds
Money Forward has completed four financing rounds with an accumulated financing amount of 4.8 billion yen. Its major investors include JAFCO, Monex Ventures, Credit Saison, SBI Holdings, Shizuoka Bank, Yamaguchi Financial Group, Toho Bank, Mizuho Financial Group, Isetan Mitsukoshi Holdings, Hokuyo Bank, Gunma Bank, Fukui Bank, Shiga Bank, Mitsubishi UFJ, Dentsu Digital Holdings, and GMO Venture Partners.
At the end of September 2017, Money Forward was officially listed on the small cap Mothers Market on the Tokyo Stock Exchange — with an opening price of 3,000 yen (rising 94 percent from the issue price of 1550 yen) and closing at 3085 yen with its market capitalization reaching 56.0 billion yen (about $505 million US dollars).
Business Model
Money Forward software: Users can sign up for free and choose from a free basic version and a paid version with more functions. Users will receive push advertisements from the free version that has limited functions. Users of the paid version will not receive any third-party advertisements and enjoy other functions including automatic real-time data update and triple data backup. The price of the paid version is 500 yen per month (roughly $4.60 US dollars per month).
MF Cloud Series: MF Cloud Series include related sub-software that are responsible for accounting, tax invoices, payroll, payment reconciliation, number (social security/tax number) information management, and employee expense reimbursement. Similarly, MF Cloud Series services include free services with limited functions, and paid services that make differentiated pricing for enterprises of different sizes.
Charging Standards of MF Cloud Series
Product Introduction
1) Money Forward
Money Forward is a personal financial management service that automatically aggregates statements of bank accounts/credit cards/securities accounts/FX accounts/pensions/points and compiles a household accounting book. Money Forward enables users to centrally manage their household accounts and financial assets, and understand their cash flow and balances.
• Bookkeeping: Money Forward has been docking more than 2,500 financial and service agencies. The revenue and expenditure data of individuals at these agencies can be updated on the Money Forward software by manual addition or invoice scanning. Through the sorting of personal income and expenditure data, the software can clearly classify the income and expenditure details of individuals or families, and present to the users via pie charts.
• Message reminder: The software prompts the user regularly for debt or arrears. In addition, the paid version will also push the monthly reports of income and expenditure in last month to the users at the beginning of each month.
• Preferential information: The information of preferential products can help users to save some expenses.
• Investment information: The share prices can be automatically obtained through the software, making it more convenient for family investment and financial management.
2) MF Cloud Series
The MF Cloud Series is a SaaS-type service platform for business operators that automates and significantly streamlines back-office operations, makes cash flows more transparent, and supports data-oriented managerial decision-making. The MF Cloud Series has achieved data interfacing with more than 3,600 financial institutions.
The MF Cloud Series include:
MF Cloud Accounting: Cloud-based accounting software that can import data from any third-party accounting software, import the revenue and expenditure information and transaction details of its bound accounts, analyze data to some extent through its client-side analysis software, automatically create reports and generate financial statements, and share the generated reports among users.
MF Cloud Tax Return: Cloud-based tax return software that allows users to generate the tax declaration reports automatically by importing the transaction details and setting the tax rates for example.
MF Cloud Invoice: Invoice preparation software that centrally manages the creation, delivery and receipt of invoices. To create an invoice, users simply choose a template and select a client and product from a predefined list. Users can create an invoice easily and select to either deliver a hard copy by post or PDF file by email.
MF Cloud Payroll: Cloud-based payroll calculation software that can calculate online pay slips, social insurance, labor insurance, income tax, and year-end tax adjustments. The software eliminates human errors and duplication of effort, thereby significantly saving time and cost.
MF Cloud Reconciliation: Cloud-based payment reconciliation software that links to multiple financial institutions and automatically clears accounts receivable each day to bolster efficiency.
MF Cloud My Number: My Number (social security/tax number) information management system is used to manage the social security number of employees (all nationals of Japan are assigned a single number, name, address, annual income, retirement benefits, tax payment, health insurance, etc.). From collection to management, security is greatly increased with validation mechanisms which prevent leakage of personal information.
MF Cloud Expense: Cloud-based expense reimbursement system that reduces time required for processing expenses to one-tenth. Manual inputs are minimized owing to automatic reading functions for credit card statements and transport system IC cards, and automated inputs of receipts. Expenses can also be entered, submitted and approved via an app.
Development
Founded in the context of the Japanese government's advocacy of enterprise accounting informatization, Money Forward also pioneered the development of personal money management services (Money Forward software) as well as cloud accounting and formed a MF Cloud Series including accounting, tax invoices, payroll, payment reconciliation, number (social security/tax number) information management and employee expense reimbursement. The data of each sub-service is interoperable and conducive to the establishment of the platform to effectively encourage users to try other services. MF Cloud Series target SMEs, which is quite correct in Japan at present.
MF Cloud series has helped businesses save 80 percent of their previous time in completing tax returns and reduced the average invoicing time by 100 minutes. As the MF Cloud Series continues to improve, users will also increase.
The company also plans to help SMEs manage invoices and receivables. Tsuji said, "Money Forward will continue to provide SMEs with comprehensive financial management services so that they can focus on their core work."
