Tuesday, July 16, 2024

Should SMBs go beyond QuickBooks for their accounting software?

Is Intuit well positioned to maintain its dominance in the small-to-medium business accounting software market in cloud era? Is the company’s long-running QuickBooks franchise still the best option for SMBs?

QuickBooks has been around in one form or another for a generation. But over the past few years, cloud-based mobile competitors have been gaining customers and market share, threatening Intuit’s dominance. Companies such as FreshBooks, a simple cloud-based app designed to help small business owners get organized and paid, and even smaller newcomers like Kashoo, another cloud-based accounting service, are giving QuickBooks a run for its money.

FreshBooks, for example, is known to be simple and seamless, translating into fewer headaches for busy SMB owners. It also easily integrates with Salesforce, Constant Contact, Basecamp Classic, Zendesk and other popular services. This advantage and other features are disrupting established players and increasing SMB consumer choice.

The type of disruption in which newer start-ups usurp market dominance from established players is often caused by the established company’s failure or refusal to disrupt itself before its competitors beat them to the punch. But here’s where Intuit can draw upon one of its leading strengths. The company’s age and success mean it has transitioned well in the past, suggesting there is no reason it cannot do so again during this move into a cloud-based, mobile era.

QuickBooks, originally exclusively desktop software, successfully shifted into the online, introducing QuickBooks Online in 2000 and doubling online product investment later in the decade, resulting in a relatively seamless transition to mobile.

But being the old man on the block means competitors enjoy an advantage that Intuit has long lost — being able to start from scratch while Intuit scrambles from old to new platforms. Again, Intuit has done this before, going back to its switch from DOS to Windows in the 1990s, then to IOS and, later, mobile.

In addition to keeping up with the latest platforms, Intuit CEO Brad Smith strongly believes that improving customer outcomes through QuickBooks is not only the key to his company’s success, but also, perhaps somewhat grandiosely, to the success of the entire U.S. economy.

“If the average small business could raise their profit margin by just 2.5 percent, that would generate an extra $500 a month for every small business, and that would add over $300 billion directly to all of our local economies,” Smith asserted in an interview with Forbes.

“If one out of three small businesses could hire just one more employee we would totally eliminate unemployment in the United States,” he continued optimistically. “And if we could increase the survival rate of small companies by five percent over the next decade, we would see another quarter million small businesses create five million new jobs, and that’s more jobs than have been created in the entire economy over the last several years.”

That’s a lot of “ifs,” but Smith remains focused on improving SMBs by reducing the hassles of accounting.

“Our goal is to make accounting invisible and painless for small business owners,” Smith told Forbes.

Hail to the chief?

But how does a company that was founded in 1983, and whose signature accounting franchise dates to 1994, remain relevant in the cloud era?

“We’re just beginning,” insists Smith, who calls Intuit “a thirty-year-old startup.”

While the thought of a “thirty-year-old startup” may strike some as odd, Intuit backs up that talk with action. The company has spent $300 million in small business product development and innovation over the past year, likely more than all of Intuit’s competitors invest in product development combined.

Ultimately, competition means more choice for SMB consumers seeking to manage their accounting via cloud and mobile. Before purchasing any accounting software, it pays to do some research. Compare features and cost. Talk to other SMB owners who use accounting software. It’s also important to determine whether your preferred software will grow with your business. Can modules be easily added? Does the software upgrade easily? Does it export to a date format such as CSV so you can read it after switching to a different software later?

These are all factors SMB owners will need to take into consideration, while always remembering that accounting software will never replace a human accountant for guaranteeing compliance with the law and with best accounting and tax practices. Still, accounting software is an excellent way for SMBs to save time and money, allowing owners to focus on what really matters — growing their business.


Flick photo via user yalegro


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