Kontist #FintechPortraits

Sales tax, business tax, income tax, as a self-employed person you have a large chunk of bureaucratic requirements to fulfill. To simplify this, the Berlin-based startup Kontist has built an app that allows customers not only to use a business account, but also to manage their tax issues. How this works, why founder Christopher Plantener wants to change the legislation in Germany and how even successful fintechs can still benefit from accelerators, the eight-time entrepreneur reveals to us in an interview.

Why did you start Kontist?

When you start your own business, you want to do what your dream is, what you're passionate about, and not spend weeks doing bookkeeping and administration.

Christopher Plantener, founder of Kontist

The idea for Kontist was actually born out of my own need or a customer need. I have already founded eight companies myself and always hated all the admin and accounting issues back then. As a self-employed person, you spend around 26 days a year just on administrative tasks, so all the things that an employee sees quite trivially on his payroll, a self-employed person has to do in addition. When you start your own business, you want to do what you love, what you're passionate about, and not spend weeks on end doing bookkeeping and administration.

After working in the field of accounting systems for the last 15 years and co-founding and building the start-up "debitoor", I asked myself at some point: How can it be that we've been trying to automate for years, we have Machine Learning and Artificial Intelligence, and yet we're not making any progress. I still feel that the processes are very difficult especially for the one-man-show (i.e. solo self-employed). And then I thought about how to simplify the process of accounting and the tax issue for solo self-employed.

First, there was the question: who has the data you need to do this? And that is, of course, the banks. If you can get that data, then you can quickly automate the processes. So I set out to find a bank. I called N26, for example, and the Spanish bank BBVA, but the feedback I always got was, "Great idea, come back in two years because we're super busy right now."

And then I thought to myself: No I won't come back in two years, I'll build it myself!

And so the idea of Kontist was born. We started our own bank, or rather we sit on top of Solarisbank, but we offer a business account and a bank card for self-employed people and are perceived as a bank. The business account is the basis to solve the problems of our customers and automate the taxes and accounting for self-employed. And that's what we do together with Kontist Tax Consulting today. Meanwhile, freelancers and self-employed people get from us all the important services related to their financial administration in one app.

And how exactly does that work?

Well, it's usually the case with the self-employed that they have a lot of money in their accounts, but it doesn't belong to them. They still have to pay sales tax, trade tax and income tax on their sales, but the tax return usually only follows 1.5 - 2 years later, by which time they actually have to put the money aside. However, many people lack an overview here, which we provide with the Kontist app.

With our business account, which can be accessed via app on the cell phone, our customers can directly see their current account balance. For any transactions that are carried out, the customer can then store a receipt and taxes are automatically set aside in the background. As a user, you can then see what portion of the money is really at your free disposal. In the background of the app are our teams from Kontist Steuerberatung and Kontist GmbH. Together, this results in the automation of all transactions. For the customer, this not only provides an overview of his current financial situation, but Kontist Steuerberatung also completely takes over the tax advice and the business and private tax return, which the team then sends directly to the tax office. In addition, one can also take advantage of an accounting service with us. Thus, only one app replaces the bank, tax advisor and accounting.

So much service certainly has its price, doesn't it? What does Kontist cost for the customer?

Here we have different gradations: The account itself is free, those who need a bank card pay €9. The combination of account and bookkeeping costs €49, and for the all-round service with bank account, bookkeeping, and private and business tax returns, customers pay €99 to €149, depending on turnover.

But that's a lot of money for a new startup, isn't it?

That's right, especially as a newcomer you want to save some money. The only problem here is that when you're just starting out on your own, you often don't know what you don't know. Our service is an enormous help especially for self-employed people who are self-employed for the first time. Especially with taxes, it's easy to make a mistake and end up in a tax trap. I would say that administrative issues in particular are one of the biggest challenges and often the reason why many self-employed people fail again.

When you're just starting out in self-employment, you often don't know what you don't know.

Christopher Plantener, founder of Kontist

You also have to consider that a business account for the self-employed costs around €300 a year, and the cost of a tax advisor is around €2,500 a year. Extrapolated, our package is much cheaper and offers the advantage that you have a direct insight into your finances and taxes, without having to deal with it.

But tax apps are now a dime a dozen, so how do you differentiate yourselves here?

The difference lies primarily in the tax advice. Conventional tax apps provide the customer with a systematic way to file a tax return, they ask the right questions and thus enable the customer to easily do his tax return himself.

Kontist Steuerberatung, on the other hand, advises customers and also submits the tax return directly to the tax office on their behalf. Within the app, however, the customer has a complete overview of their finances, which is what sets us apart from normal tax consultants. Our goal is to solve the complexity through machine automation and to bring simplicity forward for the user. That's my general mantra when building a product.

And what did that look like when you were founding? Did you guys get any support there, like working with an accelerator?

Actually yes, Kontist was founded with an incubator from Denmark. At the time, that came about because they asked me to be an advisor, since I already had some experience as a mentor within an incubator. I had previously helped set up a startup bootcamp in Copenhagen.

And in what way did that help you in starting Kontist?

Especially in the first six months, the incubator supported us with developers with whom we could build a first product together. That helped us a lot at the time. In general, I have to say: I'm a big fan of accelerator programs because they can simply provide flexible support where you might have deficits yourself. Professional feedback and good sparring are great support at the beginning, especially for young founders. I myself have already founded eight companies, but even for my ninth company I would consider working with an accelerator again if it has the right specialists on board.

You recently started a foundation, what are your plans for it?

My big goal has always been to use technology to solve structural problems in the market. However, we wouldn't have these problems if the legislator would adapt the legislation to modern times.

For example, service providers must be particularly qualified and registered for topics such as taxes or accounting, and there are many bureaucratic hurdles that must be met. There are many laws that regulate this, but no law mentions a machine here.

No one has thought about what happens when a machine takes over these services.

Christopher Plantener, founder of Kontist

With the Kontist Foundation, we are addressing several issues, one of which is building a strong lobby. Our goal is to be a point of contact and a hub for the self-employed, we engaged in targeted networking here and would like to encourage the self-employed to join forces and jointly build up an interest group that can then also represent their concerns more strongly politically. Another point also relates to politics, we would like to use our foundation to influence legislation and steer it in such a direction that Kontist eventually becomes superfluous. About 10 years ago, for example, the status of "Auto-Entrepreneur" was introduced in France and this dramatically simplified the bureaucratic hurdles for the self-employed. This then led to a boom in self-employment. I have something similar in mind for Germany.

And last but not least, of course, the issue of education: We need to do a lot more to educate young students and also introduce them to the career prospects of self-employment. For this reason, we are also increasingly going into schools with our foundation.

And what direction do you think the fintech market will take in general?

I think we will see more and more specializations on the market in the coming years. In the beginning, it was mainly the big B2C topics such as banking and taxes. I think the B2B area will continue to be particularly exciting, because this is where the real money is to be made. I also expect that smaller and smaller niches will be covered. There will probably be more and more mergers, for example, especially in the big fields like banking and trading or banking and taxes. I think some big players will cooperate here.

I think the next important development will be: What happens with London? Particularly in view of the Brexit, it will be very exciting to see what the British government comes up with. For some time now, attempts have been made to make the market more attractive for startups and especially fintechs through deregulation. The exciting question is whether the EU will allow financial services to be offered to the European market from London. If so, London will prevail over the other fintech marketplaces in Europe. If not, Berlin could become a major fintech player, which in turn could have spillover effects on the other cities in Germany. So it remains exciting.

Thank you very much for the interview.

About the person: Christopher Plantener is an eight-time company founder and has worked as a self-employed person for a long time. He has lived abroad in Europe for the last 20 years and has already worked in various European countries. In the last 15 years, he focused mainly on the field of accounting systems and then founded Kontist in 2015, the first bank in Germany for freelancers and self-employed.