QuickBooks Users Take to the Web
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While a multitude of Web-based applications targeted at small businesses have sprung up over the last couple of years, Intuit, the leader in small business accounting software, didn't rush in to stake its claim. It didn't need to. Its QuickBooks accounting package is as much a staple at small businesses as, well, Staples.
Even without Intuit's influence, the software tide has slowly shifted and Web-based applications with their inherent benefit of offering anytime, anywhere access have caught the eye of thousands of small businesses. Many of those businesses manage their finances with QuickBooks and discovered the advantages of the online version.
Intuit takes no credit for the shift. Instead it attributes word-of-mouth advertising for a 20-percent increase in QuickBooks Online Edition use. Company officials say they expect to reach 10,000 subscribers by the end of the month.
Broadband and Focus Are the Keys
Why the increase? Small businesses are wired. According to The Yankee Group, a Boston-based market research company, Internet access among small businesses has increased by nearly 30 percent in the past two years. Broadband (e.g., DSL) connections are becoming more and more common. "QuickBooks Online runs on a dial-up connection," Helen Chan, a senior analyst at the firm, said, "but small businesses tend do more once they have broadband. It becomes the lifeline of the business."
"Our success is due in large part to our focus on providing small businesses with the functionality they need most, versus overwhelming them with a suite of applications they have no use for and can't afford," said Allison Mnookin, vice president, QuickBooks, Intuit said.
Mnookin is referring to competitors such as Netledger that also offer customer relationship management (CRM) as well as accounting in its small business suite. "Small businesses aren't ready to spend $50 a month, per user," Chan said. In contrast, Intuit charges $19.95 a month for three simultaneous users.
Three-user access for the desktop version of either QuickBooks Pro Edition 2003 or QuickBooks Premium Edition 2003 would cost a company $749.95 and $1499.95, respectively. Online users can move to 10 simultaneous users for $29.95. This pricing actually works out well for Intuit, said Charles Var, the company's senior communications manager, because small business users tend to upgrade only every two to three years. The monthly subscriptions equate to a steady source of recurring revenue for Intuit.
One of the nice touches of QuickBooks Online Edition is that Intuit allows accountants to access your books for no extra charge. It's a sweet deal for your business and a wise business move for Intuit as it clearly benefits by having accountants on its side.
Why So Slow With QuickBooks Online?
While Intuit has now seen the light regarding Web-based applications, its epiphany could hardly be described as visionary. In fact, Intuit doesn't dispute that it has been tentative in promoting its online version. "I think that's a fair statement," Var said. "It's fair to say we haven't aggressively marketed it in the past. We are heavily invested in the desktop first and foremost."
Intuit's silence hasn't been strictly a marketing decision. The online version simply hasn't offered the features of the disc-based product, so it was difficult to push that version too aggressively, Var said. "It's not just ported to the Web. This is a different product developed from scratch for the Web. Some features [of the disc-based product] still haven't' been implemented yet."
Var also acknowledged that Intuit is battling some issues it has no control over namely, many small businesses are reluctant to have their data hosted miles away. "Some businesses are definitely concerned with security and privacy. Some are more comfortable keeping things on the desktop. They think the data is safer behind a locked door with a backup copy in a desk drawer."
It's ironic that small businesses notoriously poor practitioners of backup and security routines would question Intuit. "We store the data at the same data center we use to process millions of tax returns. We have redundancy, off-site backup," Var said.
The Yankee Group's Chan agrees that control of the data "has always been an issue and will always be an issue for this [small business] market. It won't ever go away."
Danielle Hewitt, president of Invisible Accountant, a firm that sets up many of its clients on QuickBooks Online Edition, agrees that businesses benefit from QuickBooks Online on many levels. "You don't have to worry about backups, you have a complete audit trail and there are no upgrade fees or installations. You get an e-mail saying the servers will be down from 2 a.m. to 4 a.m. on Sunday and on Monday morning the new features are available to you."
As for having your company data off-site, Hewitt says it can be savior. She recalled one QuickBooks Online customer who was robbed recently. "He just bought a new PC and was good to go." A user of the PC-based product most likely would have lost the entire accounting system, Hewitt said.
OK, It's Not Perfect
While small business may be a bit off the mark in worrying about security and reliability, the move from the desktop version to the online version doesn't come without a price. "The conversion isn't as seamless as it could be. You lose some granular detail," Intuit's Var said. For example, you can't drill down from a P&L line item all that way down to individual transactions.
Hewitt said that based on her experience it's easy to convert, requiring you only to restore a backup copy of your data. "The limitation is the functionality. I'd say only 60-70 percent of the reporting features are there." Inventory and job costing also aren't yet available.
Hewitt echoes Var's comments about QuickBooks Online's Web architecture and points out that the Web product is programmed from scratch, which means everything has be rewritten. It's a slow process. For example, Intuit's special editions customized for accountants, contractors, healthcare, nonprofits and retailers aren't yet available.
The wait doesn't dampen Hewitt's enthusiasm about Web-based accounting. "We no longer have to be IT professionals to do our jobs." The bottomline, she said, is that small businesses can focus on what they do best. "Why spend time and money on something that isn't core to your business? My philosophy is outsource everything."
Web-based applications should be a "no-brainer" for small businesses, Hewitt said. "Online accounting isn't only possible, it's a really good idea."
Watch for our full review of QuickBooks Online Edition in early August.
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