Tag: QuickBooks

Cloud Accounting Adoption Grows, But Desktop Solutions Still Pay the Bills

Intuit continues to lead in cloud accounting adoption among small businesses and microbusinesses in North America, with almost 1.9 MM companies on QBO in the US.  QBO continues to make strides outside the US, with 800,000 companies in their latest user statistics.  Xero continues to grow in the US, with 132,000 North America users as of the end of March, but we expect that those numbers will grow more quickly due to possible synergies from the Hubdoc acquisition in August.

QuickBooks Online Self-Employed, a product which is designed to track the cash receipts and disbursements of independent contractors, grew to 750,000 subscribers this period.  Although the number of subscribers bundling this solution with Intuit’s TurboTax income tax preparation software was not disclosed this quarter, last quarter approximately half of QBOSE subscribers also purchased TurboTax.

Intuit has quietly launched a new product targeted at companies with 10+ users called QuickBooks Online Advanced, with premium support, and priced at $150/month.  Industry observers I speak with tell me that they expect this product to go upmarket top serve larger businesses over a period of years.  A strategy for involving accounting professionals and software consultants in QBO Advanced has not been launched yet, as the product is not available on wholesale billing for ProAdvisors at this time (9/2018), and we have not heard of a QBES-style “Intuit Solution Provider” VAR program for QBO Advanced at this time.

Despite these improvements, desktop accounting continues to be the dominant platform for small business.  Intuit’s most recent revenue statistics (under the old GAAP standards, not the new ASC 606 rules) show that revenue for the QuickBooks desktop ecosystem continues to lead the QuickBooks Online ecosystem by a significant margin.  While this will evolve over time, the ratio of QBD ecosystem revenue to QBO ecosystem revenue for Intuit’s quarter ended 7/31/2018 is 1.36:1. (source: Intuit)

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While we don’t have a method of providing a true “apples to apples” comparison of QuickBooks desktop user counts as compared to QBO user counts for a number of reasons, it’s clear that desktop has a larger share of revenue.  The online ecosystem continues to grow, and it’s hard to quantify the impact of the recent QuickBooks Enterprise price hikes on that desktop revenue.  Sage and Xero continue to be a worthy competitor to QuickBooks in many segments, new products like BQE Core and AccountantsWorld Power CAS continue to show promise.  Ultimately, if artificial intelligence and machine learning can even partially live up to the hype surrounding them right now, the whole game could change – but for now, the desktops are paying the bills.