Why I'm building accounting software for Philippine SMEs

I’ve been thinking about this for a while now.

Philippine small businesses — sari-sari stores, freelancers, small service providers, local restaurants — they all need to do accounting. BIR requires it. Their businesses depend on it. But the tools available to them are either too expensive, too complex, or designed for a completely different market.

The problem is real

QuickBooks costs more per month than some of these businesses make in a day. Xero assumes you have a dedicated bookkeeper. Wave is free but doesn’t understand Philippine tax requirements. And the local options? Most of them feel like they were built in 2010 and haven’t been updated since.

I’ve talked to small business owners who track their finances in notebooks. Not because they’re not tech-savvy — because the available software doesn’t fit how they actually work.

Why me, why now

I spent the last two years building integration systems — connecting ERPs to storefronts, migrating data between platforms, making systems talk to each other. That work taught me a lot about how business software actually works under the hood.

It also showed me that the best software is built with deep empathy for the user’s actual workflow. Not the idealized workflow. The real one. The one where invoices are sent via Viber and payments come in through GCash.

What Paagos is

Paagos is an AI-native accounting platform built specifically for Philippine SMEs. The “AI-native” part isn’t marketing — it’s architecture. The system has two tiers of AI:

1. Invisible AI that handles automation — categorizing transactions, extracting data from receipts, flagging anomalies. You never interact with it directly. It just makes the product feel effortless.

2. Active AI that you interact with — ask it questions about your finances in natural language, get insights about your cash flow, let it help you prepare for tax season.

The key insight is that most small business owners don’t want to learn accounting software. They want their accounting done. Paagos is built around that insight.

What’s next

I’m currently in active development. The core accounting engine is taking shape, and I’m working through the BIR compliance requirements. I’ll be writing more about the technical architecture, the AI pipeline, and the product decisions as I go.

If you’re a small business owner in the Philippines, or you know one, I’d love to hear from you. What’s broken about your current setup? What would make your life easier?

Reach out at designsatkalmado@gmail.com.