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According to a new pricing page on the QuickBooks website, Intuit is now offering QuickBooks software plus access to “real bookkeepers to help you manage your business” for between $210 and $350 per month. Now QuickBooks customers can “Get valuable insights from unlimited one-on-one conversations with an experienced bookkeeper that knows your business.” How does it work? According to the new pricing page, "A QuickBooks Bookkeeper sets up your books via live video chat and is available for you all year long.” Blake and David discuss this breaking news and the implications for accountants, bookkeepers, and QuickBooks ProAdvisors.
Show Notes
Show Notes
According to a new pricing page on the QuickBooks website, Intuit is now offering QuickBooks software plus access to “real bookkeepers to help you manage your business” for between $210 and $350 per month.
Now QuickBooks customers can “Get valuable insights from unlimited one-on-one conversations with an experienced bookkeeper that knows your business.” How does it work? "A QuickBooks Bookkeeper sets up your books via live video chat and is available for you all year long.”
Blake and David discuss this breaking news and the implications for accountants, bookkeepers, and QuickBooks ProAdvisors, who are understandably concerned.
In a response, Intuit has shared a feedback form for those in the community to share their thoughts.
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The Accounting Podcast (formerly the Cloud Accounting Podcast) is the world's #1 accounting, bookkeeping, and tax podcast! Join us weekly for a roundup of accounting news, analysis, and interviews. Plus, earn free NASBA-approved CPE credits for listening with the Earmark app. Learn more at https://earmarkcpe.com.
Blake Oliver: Welcome to The Cloud Accounting Podcast for a special breaking news edition. I'm Blake Oliver-.
David Leary: And I'm David Leary.
Blake Oliver: David, you pointed me to this link to a Facebook group that we are both members of; it's a private group called Business Workflow and Management. I believe it's run by Seth David, is that right?
David Leary: No. That is-
Blake Oliver: No ... [00:00:30]
David Leary: This is actually, I think ... At one time, I think Stacy Kildal, and Seth David both ran this group together, and then, since then, it has split.
Blake Oliver: Oh ...
David Leary: I think they both have the same initials. It's very confusing. I thought it was the same group for two years-
Blake Oliver: Okay, well-
David Leary: This is Business Workflow and Management. It's #BWAM.
Blake Oliver: This is a group for primarily bookkeepers, is that right?
David Leary: I think so, yes. Bookkeepers, accountants ...
Blake Oliver: A lot of folks in the Intuit world, right? QuickBooks world?
David Leary: I think it probably started out very QuickBooks-focused, but [00:01:00] it's definitely not anything specific about QuickBooks; it's really just, in general, small business stuff.
Blake Oliver: All right, well, let's get to the breaking news, here, which, Deborah, who posted in this group, stumbled across a new pricing page on the Intuit website, and the QuickBooks website. What did she find?
David Leary: Do you wanna read her post first?
Blake Oliver: Yes. Okay, so this is February 4. Deborah says, "So, now Intuit is doing away with us altogether. Has everyone seen this new pricing, with bookkeeping?" and a link to the QuickBooks online pricing, and free trial landing [00:01:30] page. She also posted a screenshot of it. I'm actually able to go there right now: QuickBooks.Intuit.com/pricing.
There are now two options on the page. One is the regular, what they're calling 'Do it yourself' pricing for QuickBooks - the various versions of the online product: Simple Start, Essentials Plus, Advanced, et cetera. There's also a tab here that says, 'With expert help.' A QuickBooks bookkeeper sets up your books via live video chat, [00:02:00] and is available for you all year long.
Now this, this is big. Intuit has been doing CPA-, and EA-assisted tax prep with their TurboTax product for a few years now. I think they just added CPAs this year. You can pay extra to have their help. This is the first time I've ever seen this in QuickBooks, right, David?
David Leary: I have a slightly different experience. I know Deborah posted a screenshot, and I think I saw that yesterday, but today, I'm seeing a different screenshot. They [00:02:30] moved the positioning; it's in a different spot. We can talk about that later. There was a comment from Intuit that this is ... They are testing this. They're obviously testing it, not just getting feedback from small businesses, but they're actually testing where they should place this on the website, because there's different versions of this. You see it moved around, and it's ... The way it's offered as an add-on, versus a slider-
Blake Oliver: Yeah, but who cares about that? The big news here is that Intuit is going to be offering bookkeeping services bundled with QuickBooks, and the prices are kinda scary, if you're a [00:03:00] independent accountant, or bookkeeper who does this for a living. Just to give you an example, there, what they're calling the most popular tier, which is Plus with Live Bookkeeping is $260 per month, discounted for, I guess, temporarily down to $230 a month.
What that gives you is not just the QuickBooks product, access to that; it gives you the ability to talk to a live bookkeeper. There's this lovely picture of Claudell, who's [00:03:30] been a bookkeeper for 19 years, waving hi. She's the only one on the page, so far, so maybe they only have one bookkeeper working for them at the moment. Who knows?
It says that you can connect with a professional bookkeeper when you need an extra hand; stay confident knowing a certified QuickBooks expert is looking over your books as you work; and on-demand assistance setting up your books, categorizing your transactions, and reconciling your accounts. Somebody will help you set up your QuickBooks, which, actually, Intuit [00:04:00] used to do that in the past, with the Desktop product, right?
David Leary: Yeah. Going back to the Facebook post about this, there's 90 to 100 comments in there, and it's all over the place.
Blake Oliver: It's blowing up on Facebook, because, of course, people are saying ... Well, there's actually some great comments, here. Do you wanna read some of them, David?
David Leary: The comments are all over the board, from ... Some of the comments are, "Oh, they're choosing to compete with us.".
Blake Oliver: Some of the comments are defending Intuit, saying, "Oh, this is no big deal. They're just taking on the low-end bookkeeping work. I'm not concerned [00:04:30] about that." Kristin says, "There's a big difference between something like this already existing in the marketplace, due to the competition between firms, and a big company, whose product we have been touting as a great solution, to suddenly become the competition."
David Leary: Yeah, and there's another similar comment like that. "It's one thing to have to compete with Bench, but it's a whole 'nother thing to compete with Intuit." Zack put that one.
Blake Oliver: What this made me think of immediately, when I saw this - this is a big move - is Bench, right? Which, Bench is [00:05:00] a service that makes their own bookkeeping software, receipt-capture software, and they provide a live bookkeeper that you get assigned to you that helps you reconcile your accounts and categorize your transactions every month. This looks very similar.
Something else you get with this package is, not only do you get the set-up, but you get monthly insights. The bullet points under that feature are: your bookkeeper can fix [00:05:30] incorrectly posted transactions to ensure your books are accurate, and walk through monthly reports with your pro, and see how well your business is doing. That sounds like what I was doing, when I started out as a QuickBooks ProAdvisor, years ago.
David Leary: Some part of me feels like this is inevitable, at some level. As more, and more bookkeeping becomes a commodity, and it's also happening in other industries, as well, eventually, this is going to ... I know some people even used the word Uber in some of the [00:06:00] comments. If it's becoming a commodity, and we think AI's eventually gonna do this, it's almost where is the interaction with the bookkeeper a temporary thing, for just a little while?
There's a lot of 'sky is falling' comments, but I think some perspective on this, right? I remember, back in the day, when I used to work at the mall, selling software, when QuickBooks and TurboTax started hitting the market. This is to date myself a little bit. Everybody was, "The sky is falling. They just wanna steal accountants' jobs. It's ruining the accounting industry. People aren't gonna hire accountants, [00:06:30] and bookkeepers anymore, because they can get this software." It kinda didn't happen. I think some of this is like 'sky falling' you know? [cross talk] but I also think there's a lot of other impacts. There's a lot to talk about. I think this changes a lot of-.
Blake Oliver: It's gonna cut the bottom end of the market out from under anybody who is serving that group. If you're doing QuickBooks bookkeeping for less than $300 dollars per month, I don't think you're gonna be able to compete anymore. [00:07:00] You're not going to be able to compete with Bench, or with Intuit, now. My big concern, or my big question, is how does this affect Intuit's relationship with the ProAdvisor community?
Because, if I were a ProAdvisor, I'd be seriously concerned that they've been saying, "Oh, we're gonna help you build your business. We support accountants." That has been the message coming out from Intuit for many years now. "We are [00:07:30] on your side," and yet, here's a competitor that we are creating, and who's to say that, in the future, they won't move upmarket? I'm really surprised that this page just appeared out of nowhere, and the community wasn't prepped for this, because they're probably gonna piss off a lotta people.
David Leary: Yeah, I think somebody put a comment in there that, in a way, Intuit's been prepping people for this, for years, and I think we [cross talk]
Blake Oliver: Really? This is the first time I've heard of this.
David Leary: Yeah, but indirectly, right? Everybody's [00:08:00] been really telling all the ProAdvisors, and Accountants, "Hey, you gotta provide more advisory service, more value. You gotta provide more value. You've got to learn to value-bill. You need to do ..." Really? What I kinda see happening, if you take the bell curve, and there's what? 100,000-200,000 ProAdvisors, whatever it is ... The ones that have moved to cloud first, the ones that have automated the processes, the ones that are truly kind of that aggressive, forward-thinking ProAdvisor, who's value-billing, they've really transformed their practice for the last five, or six [00:08:30] years.
I see a lot of those ProAdvisors - that end of the bell curve - they're stealing all the A, B, and C clients, leaving the other 80 percent to fight over the D, and F clients that, to be honest, none of these people want. In the same forums, they bitch about these clients. They bitch about these clients that only wanna pay them $180 a month. In a way, somebody's gotta still take care of these clients [cross talk] The market demand'll still be here for this low-end client, but none of the ProAdvisors really want them anyways, but it's an interesting balance. [00:09:00]
Blake Oliver: Well, it's one thing to complain about them. Everybody [cross talk] likes to complain about their clients, but when the revenue is being sucked away from you by a company that you pay a lot to for their software, I just ... I see this as a huge question, and I am gonna be really curious to see what the conversation is like at QuickBooks Connect, this year, in the fall.
David Leary: How do you think this affects fixed prices? If I've had fixed prices on my page - I've moved [00:09:30] to that model - and my fixed prices were $325, now, are people gonna call me, and be like, "Intuit'll do it for $260 ..."? Did they just set fixed prices for the whole industry?
Blake Oliver: This is why I would be annoyed if I were still in practice is that these are acting like ... Do you know the concept of anchor pricing, David?
David Leary: Yes, yes, yes, yes ... [cross talk]
Blake Oliver: The idea is that once you put a price out there, that's the anchor, and then, all of the negotiation, or discussion revolves around that anchor. If you're [00:10:00] talking prices with a potential customer, you always want to start as high as you possibly can, without scaring them away. Let's say you know that there's just no way that they're gonna pay you $1,000 a month.
You start there, and you say, "Well, typically, I charge $1,000 a month for this sort of service," and then, you can discount to $500, which might be what they're willing to pay. If you start at 500, you might end up having to discount to 250. It's psychology. By putting out here prices that are essentially around [00:10:30] $200, between $200 and $300 a month, Intuit has anchored a very low price point for the industry. Now, how am I gonna convince prospects to pay me $500 a month, or $1,000 a month, when they look at this on the QuickBooks website?
David Leary: Yeah, and this starts to affect the value conversation, as well.
Blake Oliver: Yeah.
David Leary: It's tough, because I think it's everything that ... Even this happened at QuickBooks Connect, teaching people how to charge for their value. Teaching people [00:11:00] how to do fixed-fee. It almost goes against some of these things, or, at least, sets, like you said, that par, that bar for the level price.
Blake Oliver: Yeah, and this is not value pricing. This is fixed-fee pricing [cross talk] difference, which is, with value pricing, you can charge different prices for the same service to different customers, based on their perceived value [cross talk]
David Leary: Do you think this is gonna make value conversations easier, if you're [cross talk]
Blake Oliver: I don't know. I think it makes it harder, honestly.
David Leary: Harder?
Blake Oliver: Yeah, I [00:11:30] think, basically, Intuit has just anchored the price for bookkeeping services, and this is the floor.
David Leary: I think one of the comments was talking about how this is really gonna help- be powered by accounting professionals. I mean, now we start doing math on margins, right? How much could you pay somebody an hour to do this, and that type of stuff. Then if kind of also makes me think ... Every single day, I get a private message on LinkedIn from somebody in India that wants me to give them bookkeeping clients. I don't have any bookkeeping clients to give them. Is this gonna open the door to this Uber-ization, and this flood of bookkeepers [00:12:00] are willing to do this for $10 an hour for Intuit?
Blake Oliver: I'm not quite clear on who is Intuit using to provide this service. Who have they hired? Who are their bookkeepers that are gonna be doing this, and how much are those people are getting paid? Are they outsourcing? The picture on the website, certainly ... It doesn't seem like Claudell is outside the United States. She could be. Who knows?
David Leary: That might be a test picture, because I signed up for TurboTax Live, and I think [00:12:30] her picture's there, too, so that might be just-
Blake Oliver: Stock imagery.
David Leary: It might be, maybe she's really a TurboTax Live person, and they just wanted to test this for QuickBooks Live, and they just used the same image, or something. Then I was seeing, because I did start my taxes with TurboTax Live, and I have yet ... I'm paying like a hundred bucks more for TurboTax Live, and I have yet to actually engage the accountant. Now, I'm thinking, "Man, maybe this is just a big margin sell." I'm gonna pay more, and then actually not [00:13:00] ever take advantage of the service.
Blake Oliver: There's a chat feature on the website, and I'm asking right now where the bookkeepers are located. I wonder if they'll tell me.
David Leary: Oh, wow, real-time ... Wow. real-time testing, here, going on.
Blake Oliver: I said, "hello. I'm curious to know where your bookkeepers are located for the Plus with Live Bookkeeping service plan." Let's see if they get back to me. Ooh, it says, "Agent is typing." "Thank you for your continued business with QuickBooks. I'd be glad to assist you today. May I please have your name so I can address you better?" "Hi, I'm Blake."
David Leary: While you're [00:13:30] starting to do that interaction, Blake, and you start getting some answer, I have to also kinda frame this a little bit. Again, it's not new. Way back in 1998, I actually helped create a team, and created an offering for QuickBooks, called QuickStart.
Essentially, you could buy QuickBooks Desktop software; you'd get an expert; i.e. David Leary - literally, it was me, and a team of three other people. We would set up your whole data file, train you to use it, and then, send it back to you, and [00:14:00] kind of push you out of the nest a little bit. In a way, it's not like this is something that hasn't been done before by Intuit.
Blake Oliver: Tell me about that. How long did you do that, and why did it stop?
David Leary: I think I had this as a question down below. It's like kind of thinking in my brain, as a jotted some notes on this. I think it's scale. There is a difference to do this - to have a bookkeeper from with 100 clients, 1,000 clients, 5,000 clients. Now you're thinking about [00:14:30] the Intuit scale. You now have a bookkeeping firm with millions of clients. It's very, very hard to scale.
Blake Oliver: Right.
David Leary: Let's just use Uber as an example: 99.99999 percent of every Uber ride is the same. Somebody sits their butt in a car, and it drives them somewhere, then they get out of the car. That's the Uber experience, but every single small business is different. Even though you think you've set up these processes, and it thinks it's scale, it's very, very hard to scale this, especially [00:15:00] at a millions level. How big was your accounting firm, when you eventually got it up to your bookkeeping ...?
Blake Oliver: I had two partners. Two of us were operating it; one investor. Then, we had 10 employees, 10 staff, and we were serving about 200 customers per year, or clients.
David Leary: Okay, so you need about a staff of 10 to serve 200. Let's do the math-
Blake Oliver: 20 per [cross talk] [00:15:30]
David Leary: QuickBooks users. What kind of staff would you have in bookkeepers, then? It's divided by 20, right?
Blake Oliver: That was relatively high-touch, compared to what this would be, I imagine. Maybe you could have a single bookkeeper assigned to 40 or more, or maybe you just have a pool. I don't know how they're doing it. I'm curious. I'm asking this agent in the online chat. We'll see if we get any information. So far, they've asked me what QuickBooks software I'm using currently, and I said QuickBooks Pro, and they have not [00:16:00] yet responded.
David Leary: The scale thing's very interesting, because-.
Blake Oliver: I feel like it would have to be a pooled resource, because the way it works with, say, TurboTax ... I actually tried it last year, because I was curious. I bought the TurboTax with the assisted help, where I could contact an EA. At that point, they only had the EAs.
I could basically get on a video chat with an EA, immediately, or very soon; I could schedule one. I did it. I asked a question about something I couldn't figure out how to do. [00:16:30] Wonderful EA from the United States - I don't remember exactly where - jumped on, sorted it out with me, helped me press the right buttons. It actually worked really well, but it wasn't like she was dedicated to me. She was a pooled resource. If I called back again, I'd get somebody else. I'm curious if this is that model, with this QuickBooks bookkeeping thing, or if it's you get an assigned person.
David Leary: What you're saying is maybe one quarter, I get insights from somebody; then, next quarter, I get insights from somebody else.
Blake Oliver: Right, and it's a [00:17:00] lot cheaper, if you're if you're building out a scalable business. All you know is that, "Okay, well I just need to have enough bookkeepers working at any time of day to be able to take the calls from people so they can help," but, then, you're not really getting a dedicated bookkeeper, which is a very different experience.
Maybe that's how ProAdvisors will have differentiate themselves from this service. I still don't like the idea of having to compete against my software provider for clients. I [00:17:30] wonder if this is ... If Xero is gonna capitalize on this, and if they will figure out a way to pull away ProAdvisors from Intuit, but you were saying that maybe Xero will do the same thing.
David Leary: Yeah. I think, in the short term ... Because there're some comments. People are like, "I'm gonna go get certified in Xero, tomorrow." I think there's a comment like that, the huffin'-puffin', but that's very ... It's naive to think Xero is not gonna do this tomorrow, or Sage. This, I think, is inevitable, ultimately, in the long run.
If [00:18:00] anybody should be scared, right ... I think if you think about some of the people that are already doing this, you have the Bench, the Pilots, the ScaleFactors, BotKeeper, Ceterus. I think if anybody should be scared, it should be Bench, because they built their own proprietary accounting system. They're not built on top of a QuickBooks, or a Xero.
If you're Ceterus, or ScaleFactor ... If Intuit introduces a model like this, you kind of already have a lot of systems, in place to work with a model like this. somebody like Bench has no [00:18:30] ... I think it's all proprietary. They're not already working with QuickBooks under the covers. How did they ...? I think there's upside for some people on this, but I think it's also scary for others.
Blake Oliver: Yeah.
David Leary: What else did I see that was an interesting comment on this that I was thinking about? Oh, quality control is interesting to think about, but then again, I think about the current ProAdvisor side, and I think again, again, you may ... Even with people who are certified with CPA, what is the real quality control? Everybody is kind of on their own, hoping ... Their fingers [00:19:00] are crossed, because, essentially, it's practice. People have a practicing firm.
Blake Oliver: So ...
David Leary: You get an answer?
Blake Oliver: The agent I'm talking with, his or her name is Jhen, J-H-E-N, and gave me a link to the current ProAdvisor directory. I clarified; I said, "I'm sorry, I'm confused. I'm interested in the live bookkeeping service; the one that is $230 per month, where I can talk to a live bookkeeper inside QuickBooks." Jhen is now transferring me to somebody else who can help me.
David Leary: The other big impact ... Yes, it's gonna impact ProAdvisors. It's [00:19:30] gonna impact accounting firms, and bookkeeping firms. I think [cross talk] impact the whole app-distribution structure, because, are bookkeepers that are a part of this, are they going to be somewhat constrained by some sort of Intuit rules, or guidelines, to where they're only allowed to recommend app A, B, and C?
Blake Oliver: Well, are they even gonna recommend apps? I think they'll be kept on pretty strict rails: helping to categorize transactions, and review financial [00:20:00] statements, and fix transactions, and whatnot. I can't imagine that Intuit could actually make any money, if they've got these bookkeepers out there doing software consulting, right?
David Leary: It feels like there're so many more questions to this - thousands and thousands of open questions. The problem is I think there're so many open questions, that's where people start with "The sky is falling" stuff. They're laying in bed at night, and their head's spinning around this, and then, they just come up with these doomsday scenarios.
Some thought I've had is it's kind of good for Intuit. Intuit needs to disrupt [00:20:30] themselves, because if they don't figure out how to do this, and disrupt this model a little bit, somebody else is gonna do it to Intuit. Is it the perfect solution? Is it where things are going for sure? I don't know, but, if Intuit doesn't try to do things like this, somebody else is probably gonna do this, because I kinda feel like it's inevitable with the way things are headed. We should read Kim [Amsbaugh's] kind of official response that she put out there in the forum, while you're typing away there.
Blake Oliver: Yeah, go ahead. [00:21:00]
David Leary: She also provided a survey URL for feedback-
Blake Oliver: Wait, who is this person?
David Leary: Kim Amsbaugh. I think her current ... She's in PR at Intuit, but I don't know ... I think she might be PR communications for either the accountants team, or the whole QuickBooks side of the fence. I don't think Kim speaks to any PR-type stuff, or community relations with TurboTax side, but I don't know Kim's exact current title. Kim's been at Intuit a very, very long time, but I don't know exactly what her exact perfect title [00:21:30] is. I'll just read her post.
Kim Amsbaugh: "Hi, everyone. Kim Amsbaugh here, with Intuit. We're testing small business interest in a bookkeeping service as part of their QuickBooks subscription powered by accounting pros like you. We're learning from this test and look forward to partnering with accounting pros to deliver great services to small businesses, while also potentially providing new revenue streams for the accounting community. We highly value your feedback and have shared it with the team. If you want to share more, please share your thoughts here."
David Leary: They've created a Google forum [inaudible] really, all these people [00:22:00] that are probably in that forum, and others to give feedback, because that's the best way to shape something like this is for Intuit to throw it out there, get feedback, and iterate on it.
Blake Oliver: Okay, so, I've been transferred to Heath, who said, "So we have that live now with our TurboTax, and it has been very successful, and we have started to advertise this with QuickBooks to see how popular it would be, but it isn't quite live, just yet."
David Leary: Oh, yeah, I see, because, if I try to buy it, it [00:22:30] says, "Thanks for your interest in QuickBooks Live ..."
Blake Oliver: Oh, so this is just testing. They're just testing interest. This is what startups do when they wanna see if there's a market for the product. You don't wanna build something if there isn't a market, so you put up a landing page, where you advertise it, and you make it seem like it's real, and it exists, and you see how many people click the Buy button. They actually can't buy it. You just take their email, and then, if you get enough interest, then you actually go and build it-.
David Leary: Which is, a lotta times, smarter to do, because what if Intuit tried to build this? They got [00:23:00] tons of ProAdvisors on board; everybody changed their processes; they spent months building this in secret, and then, they launched it, and not one small business owner clicked to buy it. It would've been millions, tens of millions, hundreds of millions of dollars just lost.
This is something companies do, because it's just cheaper. It's cheaper. Actually, I would recommend ProAdvisors, and listeners of our podcast, accounting firms, do this. If you're thinking of adding a new service, instead of building it, and adding a new service to your clients, put a button on your website, and see if people click on it. If nobody's clicking on [00:23:30] it, they don't want that service from you.
Blake Oliver: Right.
David Leary: I would do ... It's a good way to test something for nickels-.
Blake Oliver: But it's also somewhat dishonest, wouldn't you say, or confusing? It certainly caused a lotta confusion today.
David Leary: It's confusing. No, there's no doubt it's confusing. Dishonest is hard to say, because I've done it myself, and I'm a believer in it. Then, like-
Blake Oliver: It does work.
David Leary: -"Oh, people actually want that," and then I go hurry up, and build it. I've done that myself, but, yeah, I don't know it's dishonest. It [00:24:00] would be dishonest, if it just stopped, like it didn't actually do anything, but it's like, "Hey, thanks for your interest. Please fill out this form if you want us to tell you when this is gonna be available.".
That's the other part of this; this could completely ... Two weeks from now, Intuit could come back, and be like, "Hey, we did this test, and 100,000 small business owners want this. Hey, ProAdvisors, who's gonna sign up?" Like, "We got a lead funnel of 1,000 people that want ProAdvisors."
Blake Oliver: The summary is, we've figured it out, right now, this [00:24:30] is just testing on the pricing page. Intuit is trying to gauge if there's enough interest, and we suspect that, if there is enough interest, they will build it, given the success that Bench is having. By the way, Bench has grown quite a lot since the last time I took a look at them, and I've got some stats.
David Leary: Current stats on Bench?
Blake Oliver: Yeah.
David Leary: The last stats I knew of, I think. was they had 5,000. Are they past that, now?
Blake Oliver: Well, let me tell you. I [00:25:00] wrote a post about Bench, back in 2015, on my blog. The post is called, "Is Bench Bookkeeping Right for my Business?" A lot of that information was out of date, so, recently, the Bench folks reached out to me, and said, "Hey, would you mind updating your post?" They gave me some new information. I was happy to do that.
The new info is that, in January 2018, Bench raised $18 million for a total of $53 million invested to date. They now have 350 employees, and their pricing [00:25:30] ranges from $95 to $495 per month. I don't know how many customers they have, but I do believe it's over 6,000. Is that what you said?
David Leary: When I've talked to them in the past, they told me 5,000, so it could be as high as 6,000 now. Divide 350 ... That's about 17 clients per employee. From a bookkeeping firm, is that efficient [cross talk] 6,000 [00:26:00] customers divided by, you said, 350 employees. That's 17 bookkeeping clients per employee.
Blake Oliver: We've gotta consider that a number of those employees are probably not, are definitely not providing services to the clients-
David Leary: They're engineers, yeah.
Blake Oliver: Let's just say it's 300 that are actually bookkeepers, right?
David Leary: Okay.
Blake Oliver: So, then, it's 20 to 1.
David Leary: I've talked to many ProAdvisors, and people that have bookkeeping firms, and between QuickBooks Online, and the apps, and what they're billing efficiently, they're [00:26:30] pushing ratios of 50, 60, 75 a month.
Blake Oliver: Well, it depends what kind of work you're doing with your clients. Depends how big they are. I found, on average, that my bookkeepers could handle 20. Now, if they were really talented, they could handle 40. I had just one all-star, who ... She could do 60, but that's unusual.
David Leary: I [00:27:00] assume your firm was taking advantage of every possible automation, and cloud thing you could [cross talk] right?
Blake Oliver: Not every automation, but we were definitely ... Compared to most firms that are still using desktop software, we were doing really well. We were using receipt capture. We were using online bill pay; Bill.com; we were using Xero. Our clients had at least three apps that were all integrated.
I think 20 is reasonable, on [00:27:30] average. Again, I'm sure there are some rock stars out there, who are like, "Oh, 20? No way. I can handle way more than that." Well, you're probably not average. That's ... You work for yourself, first of all. That takes entrepreneurial skill, and ability, and that means you're probably just a lot more productive than most people who would just be an employee.
If you just take the average bookkeeper, who doesn't wanna be entrepreneurial; just wants to come in, and do a job from 9:00 to 5:00, they can probably handle 20 is [00:28:00] my guess. I'd love to know if anyone thinks that that's off [cross talk]
-interesting, so Heath is now taking a survey. He's taken my info, and has asked ... When the feature is released, they'll contact me, so I gave him my name, and e-mail address - my real name, and email address, and phone number. He's saying, "From one to five, what level of interest do you have in this?" I guess I'll say five. "Does the price seem reasonable to you, from one to five?" Yeah, it seems very reasonable. Hopefully, I don't get black-balled [00:28:30] from this list, and they never tell me anything ever again.
Okay, let's step back for a second. I feel like, when I had my own practice, I ended up putting a floor on basic bookkeeping services of $250 a month. If a client wasn't willing to pay at least that, then I wasn't interested in talking to them. It just wasn't ... The margins were not gonna be good. It wasn't gonna be a good experience.
I would not be worried, if I still had my practice, about this [00:29:00] assisted-bookkeeping QuickBooks-Intuit product, because all the prices are basically less than $260, and I'd be really looking for clients that are willing to pay $500, and more. Of course, when we joined a CPA firm - we merged with a CPA firm toward the end - we were looking at customers willing to pay $1,500 a month, and up. That's not a problem.
: What is a problem, I think, is the anchoring. I don't like Intuit setting [00:29:30] a floor on prices, or not even a floor. I don't like them setting a low anchor point. That would be frustrating to me, and then having to constantly explain the difference to clients. Although, maybe, it would end up helping, because it educates them on online bookkeeping, and I could say, "Look, here's what's included with the QuickBooks Live Bookkeeping product. You get just these three things, and here's what you get from us. You get these 30 things." Maybe, in the end, it will help educate the [00:30:00] market. I don't know, what do you think, David?
David Leary: It's actually good getting a perspective on this from somebody who's owned a firm, has operated a firm. Like, "Hey, at this dollar figure, I could do it; at this dollar figure, I can't," but, if I'm hearing you correctly, there could be a huge upside here, because, now, even now that there's an anchor price that has kind of the - 'bottom-barrel' is not the best terminology, but, right now, live, I can't think of something else to say - the bottom-barrel set of features, whatever it might be ... Maybe there's no app consulting; [00:30:30] maybe there's none of this, right?
Blake Oliver: Right.
David Leary: Now, on my site, I can put a fixed fee of $500, and be like, "Yeah, but look at the 10 other things I'm gonna give you; the hundred other things I'm gonna you on top of ... versus what QuickBooks could give you." In a way, maybe this is like a reverse-psychology thing, and it actually sets the price bar ... It allows people to set their fixed fees higher.
Blake Oliver: What I would do is, if Intuit starts doing this, is I would immediately start optimizing my website [00:31:00] with blog posts, and doing paid advertising online, saying, "Unhappy with QuickBooks Live Bookkeeping? Here's something better for you ..." because it-
David Leary: Good luck with that, because Bench has run so many Facebook ads, and Google Search ads that you just can't afford to buy those terms.
Blake Oliver: Well, not, but I can do organic SEO, on my website, writing articles like that ... The reason Bench reached out to me about correcting the information on my blog post is obviously because it's having an SEO impact. People [00:31:30] are finding that article, and they found it, so it must be ranking , and they wanna correct the information so that it doesn't hurt their business.
I could do the same thing with QuickBooks, and just write a bunch of articles about their service, and the problems with it, and case studies of people who switched over to mem and I could rank very highly on Google for those terms. Actually, in that way, I'd be sort of piggy-backing off of Intuit and stealing the people who're really just [00:32:00] too big for them, who would be good for my service, and Intuit's the one that would be spending millions of dollars bringing in these customers. It's sort of like ... What do you call it when one animal feeds off of another? It's not parasitic-.
David Leary: Symbiotic?
Blake Oliver: It's more symbiotic, yeah.
David Leary: One thing I think I'd see this as being a positive out of this is you said, "Hey, if somebody doesn't wanna pay me $280, I don't want them as a client."
Blake Oliver: Right.
David Leary: What'd you do? You just said, "Sorry," and just [00:32:30] punt them? At least now, you can send them somewhere, like, "Hey [cross talk] for you, the right size might be over here." People aren't just gonna be punt-kicked from one firm, to another firm, to another firm.
Blake Oliver: What's great is that I can use that now, and I can still keep the client for the other stuff. They're not willing to pay me to do their basic bookkeeping work, fine, but at least they have help, and I can just say ... I can say to them, when they get stuck on categorizing transactions, "Well, you should use your QuickBooks Live Assistant [00:33:00] to help you with that," and then, I don't have to get on the phone with them. Then, they call me when they need some help with like an integration, or they call me when they need help with tax.
David Leary: Interesting, so you, as a firm owner, could outsource ... Use this as an outsourcing service for your own clients.
Blake Oliver: Which is what Bench is starting to do with accountants. They have, now, a partner program that is not ... It's active. They haven't like started promoting it a lot. It's not a secret, but you can actually [00:33:30] partner with them, as, say, a tax professional, and then, have them do the bookkeeping for your clients, and then they'll send you the reports for taxes, and they'll do the adjusting entries, and all that stuff. This could be very similar, and there are way more tax professionals, independent tax professionals, out there still than there are, I think, independent bookkeepers. Maybe that's the play for them: get all that bookkeeping work referred to them by the tax people.
David Leary: Yeah. I don't have much ... Literally, I had a scratch [00:34:00] pad of thoughts on this. I think we've exhausted all them. I really knew we had to do its own show. We couldn't have talked about this, and talked about 15 other articles, so I think this had to be its own show. It had to be a standalone episode. I'm sure a lot of people are gonna wanna send us thoughts, and feedback-
Blake Oliver: Yes.
David Leary: -and comments, so what's the best way for them to do that?
Blake Oliver: We really wanna hear your thoughts on this. Contact me, and David. Tweet at us. I'm @BlakeTOliver, and [00:34:30] where are you, David?
David Leary: I'm @DavidLeary.
Blake Oliver: Follow us, or like our page on Facebook - Cloud Accounting Podcast. Just search for that. You'll find it on Facebook, and feel free to connect with me on LinkedIn, if you're on LinkedIn. I'm always looking to hear what people think about the show. Oh, don't forget to subscribe to our show notes. If you go to BlakeOliver.com ... Or, you're not gonna remember that-.
David Leary: Cloud Accounting Podcast, yeah.
Blake Oliver: CloudAccountingPodcast.com; that will direct you to the podcast page [00:35:00] on my website. There is a blue banner at the top that says Subscribe to Updates. Click that banner, subscribe; you will get notified via email of any new episodes, and in that email will be all the links, and descriptions of any articles that we talk about on the show, so you can then go, and read those later, if it was interesting to you in the discussion.
David Leary: That'll be important with this episode, because you're gonna wanna get the link to the survey, and you're gonna wanna get the link to the Facebook post, as well.
Blake Oliver: Exactly, and the screenshots [00:35:30] of this new pricing page. All right, David, well, that was a fun special episode. I look forward to chatting with you on Friday.
David Leary: Yeah. Same Bat Time, Same Bat Channel. Did I say that? That's so corny! Why'd I even say that? Anyways, I'm out; we're out.