What we know so far about QuickBooks Live, Intuit’s “test” of assisted bookkeeping services; FreshBooks adds double entry accounting; KPMG UK gives up on SMB accounting; and more

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This episode is sponsored by Veem, the easiest way to send money internationally. Sign up today and earn 10,000 VeemBack points on your first* transaction.

Bookkeeping is Dead: How Intuit Will Kill It for Good — Blake Oliver — Hot on the heels of TurboTax Live, Intuit is building an on-demand bookkeeping service called “QuickBooks Live" that will connect business owners directly with bookkeepers via video chat and screen sharing technology integrated directly into the QuickBooks application.

Intuit is testing potential bookkeeping — AltAccountant Podcast — With Intuit/QuickBooks (and other software companies) testing the demand for bookkeeping services built-in the subscription.... some interesting questions to think about. What if the need for manual bookkeeping was replaced by software company? What would your business look like if you had to provide valuable services and “bookkeeping” as we know it ceased to exist?

Is Intuit® Building the 'H&R Block®' of Bookkeeping? — Insightful Accountant — Joe Woodard provides his personal perspective and recommendations for bookkeepers on the QBO-Attached Bookkeeping Service Intuit is considering offering its users.

inDinero Acquires mAccounting in Move to Transform the Outsourced Accounting Industry — PRWeb — inDinero, leading accounting and tax software for growth businesses, acquired outsourced accounting and tax firm mAccounting to fuel their next phase of growth.

FreshBooks matures accounting offering — Enterprise Times — FreshBooks has started the year with several update, including the introduction of double entry accounting and bank reconciliation.

KPMG shutters small business accounting unit — AccountingWEB — KPMG has confirmed that it will close its small business accounting venture after just five years in the market.

American Express and Bill.com Introduce Vendor Pay — Bill.com — American Express and Bill.com announced a strategic partnership with a new offering: American Express “Vendor Pay” by Bill.com.

Thanks for listening! Let us know what you think on Twitter. Follow and tweet @BlakeTOliver and @DavidLeary. Also, to make sure you don’t miss any Cloud Accounting Podcast news, please like our Facebook page!

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Transcript

Cloud Accounting Podcast E59: What we know so far about QuickBooks Live (transcribed by Sonix)

David Leary: This episode of The Cloud Accounting Podcast is sponsored by Veem. Are you tired of slow, stressful, and expensive bank wires? There is a better way. You could Veem it. Veem is a simple, affordable, and fast way to send, and receive payments around the world, or to the business next door. Veem bypasses current wire-transfer processes, saving users time, and money. Veem also integrates with your favorite accounting software, like QuickBooks, Xero, and NetSuite, making manual data entry a thing of the past.

David Leary: Cloud Accounting Podcast listeners who sign up for Veem will get 10,000 VeemBack Rewards points. That's a free $100 for each of your clients that sign up. Head over to CloudAccountingPodcast.com/Veem. That is Cloud Accounting Podcast dot com forward slash V-E-E-M to redeem this exclusive offer. Remember, Veem it, and it's paid.

Blake Oliver: Welcome to The Cloud Accounting Podcast. I'm Blake Oliver-.

David Leary: And I'm David Leary. Take a breath, Blake. Take a breath.

Blake Oliver: A lot of developments in a very short amount of time from our friends over at Intuit.

David Leary: I think the notification button on my- the little red notification on my phone for Twitter has not turned off in eight straight days, or whatever this is, now, four ... Whenever we did the last podcast, the special breaking news episode. That was episode ... What's the number on that, for those of you [cross talk]

Blake Oliver: 57.

David Leary: Episode 57. Since that episode released, Episode 57, yeah, my notifications for LinkedIn, Twitter, and Facebook, and private messages has been a little on the crazy side.

Blake Oliver: For those of you who are just joining us today, welcome to The Cloud Accounting Podcast. Episode 57 was all about QuickBooks Live. We're proud to say David and I broke the news, here on The Cloud Accounting Podcast. We were first to the story. It's all about Intuit offering business bookkeeping services, live bookkeeping services, inside the QuickBooks app. For $200 a month, they are going to now be offering basic bookkeeping services.

Blake Oliver: There was a whole bunch of response from Intuit, and people in the community - critics, supporters; Intuit saying this is only a test, but is it really a test? I mean, there's so much to talk about here, David. Where do we start?

David Leary: When we did the Episode 57, it was like real-time digestion of what's happening. We saw that thing, the Facebook post. We went to QuickBooks' pricing page. It was live on the pricing page. You and I were like, "Let's get on, and record." We kind of recorded, real-time, our discussion, and, in a way, it was like watching a televised police chase. You actually were using the chat; you were trying to do it. I think somebody even tweeted that at us.

David Leary: It went from that to tons of forums, tons of tweets, lots of opinions everywhere, but, I feel like in the last two days, deeper articles are being written. I know you wrote a deep article. Joe Woodard wrote a deep article. We could talk about Hector Garcia has a very good hour-long video that really poses some deep thoughts, and questions about this. I think we're at that ... Deeper thoughts are happening about this, and so, I think that's where we start is those articles.

Blake Oliver: I'll just go through my article, here. It sort of lays out what we know so far. How about that? I'm not a journalist, but I'm trying to be journalistic in my coverage of this. If you're interested in it, it's over on my blog, BlakeOliver.com/blog.

Blake Oliver: The article, which I published, is called "Bookkeeping is Dead: How Intuit Will Kill it for Good." Maybe that's a little harsh, but I really wanted to get people's attention, because I think this is a huge story in the accounting profession, especially client-accounting services, and bookkeeping. I started as a bookkeeper, so I am very, very much personally invested in the outcome of this.

Blake Oliver: As many of you know, last week, David and I got a tip from a private Facebook group that there was new pricing on the QuickBooks pricing page. Intuit was advertising real bookkeepers to help you manage your business, with a lovely, smiling woman, Claudell, a bookkeeper for 19 years, who you could now buy bookkeeping services from, in addition to your QuickBooks company file, for an extra $200 per month. This came as a shock. I had not seen anything from Intuit about this. David, had you seen anything from Intuit about this, publicly? Nothing, right? Just completely outta the blue.

David Leary: Not until the website was up.

Blake Oliver: You and I got on the podcast, and we just started talking about it; we started digging into it, looking at the pricing page, trying to figure out what is going on; tweeting at people; doing basically a live breaking-news edition.

Blake Oliver: In the days that have followed, I did a little bit more digging, and I found out this is really very similar to another service that Intuit already offers, called TurboTax Live. For those of you who aren't familiar with it, this started in 2017. It's a service that connects customers who are using TurboTax, Intuit's tax-preparation product - self-tax-preparation product - to enrolled agents, or, this year, certified public accountants, on demand, via a one-way video. These people can help you with your questions. They can help you fill out your forms. They can even sign, and submit your tax return for you, if needed.

Blake Oliver: Interestingly, they are using the same picture of Claudell, if that is really her name, on TurboTax Live, as the sort of mascot for TurboTax Live, basically with that offering; you pay extra, significantly more than you'd normally pay for TurboTax, but you have the assurance of having an EA, or CPA there to answer your questions [cross talk]

David Leary: -I signed up for TurboTax Live. I'm gonna talk to Claudell, because I ... I haven't yet, but I'm getting to the point where I'm probably gonna have questions. You do all the easy parts first, and you put off the hard parts.

Blake Oliver: Yeah.

David Leary: I'm gonna be talking to Claudell soon.

Blake Oliver: I've used TurboTax Live. I used it last year, because I was very curious how it worked. It seems to be the future of tax prep. Intuit calls this category "Assisted Tax Prep," meaning it's not full-service, but it's also not self-service; it's assisted. It's sort of a new category. H&R Block is also trying to do this, as well, and it seems to fill a lot of people's needs. They wanna do it themselves. They wanna save money. They don't wanna spend three times more to have somebody do it for them, but they also wanna be able to ask questions.

Blake Oliver: I went over to the TurboTax Live pricing page, and there's a great screenshot on my blog. You can see, it looks almost exactly like this new QuickBooks Live offering, where you pay a little bit extra, and you get access to this expert to help you out. I was curious ...

Blake Oliver: Well, we should talk first about Intuit's response to all of this coming out, because the pricing page was a shock. A lot of people were shocked. I was shocked; you were shocked; tons of people in the community were shocked. What does Intuit ... What did Intuit say in response to all of this coming out?

David Leary: Well, I mean, I agree about people being in shock. I worked for Intuit for 20 years. Intuit's response: "This is a test." [cross talk] Yes, they could be testing-

Blake Oliver: -their official Intuit accountant's Twitter account responded to my post about the new pricing page, saying, "To clarify, this is a test we're running to gauge SMB interest in a bookkeeping service as part of their QB subscription that would be powered by accounting pros. The pricing is not set, nor are the services. The info on the site is only being used as an example, as part of the test."

Blake Oliver: Indeed, if you try to click "Buy Now," on that pricing page for QuickBooks Live, it doesn't work. It says it's not available yet, and you put in your email address, and I guess they'll notify people who are interested, if they do eventually launch the service. That's the official response, but it doesn't seem to be exactly what's happening, right, David?

David Leary: It's obvious it's live, right? That's not a live service, but it's live on the website. This is why I feel like this is such big news, because it's not like, "Here's a fake screenshot ..." like, "Here's a fake screenshot. Give me some feedback." It's in-the-field live test, but not just that it's in the field, there's job postings that seem to go along with the test.

Blake Oliver: Yes, and that is what really blew my mind is an accountant, who shall remain nameless, contacted me, and sent me the URL of a job posting on the Intuit Careers website for a job that has got the most boring title I could ever think of, but is a really interesting job. It's Manager III: Service and Support.

Blake Oliver: If you read the overview, and the responsibilities ... Well, I'll just read it. They're looking for a group manager to lead the service-delivery function within our small-business professional-services team. The group manager will be responsible for "Delivering an outstanding experience for small-business customers through our expanding network of certified bookkeeping professionals." Full stop. Is it just a test, if they're hiring somebody to run the program?

David Leary: It feels like this is ... It could be a well-funded three-year test. I think the word 'test' is getting very- being used very liberally.

Blake Oliver: Yes.

David Leary: There's just a lot of variance in how big of a test this is. I think that's why I truly feel like this is a story. You could say it's a test, but regardless, Intuit making a test like this is gigantic news. The fact that this test is even happening is the news, regardless of the results of the test. Just the test itself is news.

Blake Oliver: What's interesting is that we have sort of confirmation that this is more than just a test from Joe Woodard, himself, who - for those who are not familiar with Joe Woodard ... David, what's the deal with Joe? He's famous why?

David Leary: Joe Woodard has a lotta history in our space. I think Joe ... Hopefully, I'm right, here, if he's listening. He has a conference , Scaling New Heights, and he has The Woodard Group. The Woodard Group is a really mostly made up of QuickBooks ProAdvisors. He's put on a conference - Scaling New Heights. I wanna say it's 10, maybe 11 years old now. He's got his conference that's out there, and he has a tribe of people who listen to him. He has a very deep relationship with Intuit. Intuit is the exclusive sponsor of his conference.

David Leary: He obviously saw this story break, and then, he went, and contacted Intuit, and came back with some facts. One of its facts kinda, the way I read it, indicates that this is not a test of market viability. The decision's already been made to move forward. That tells me this is kind of just a test of what's the website design gonna look like? What's the price gonna be? How are we going to off- How are we gonna work on this service behind the curtain, as far as who's gonna do it, how's the work gonna get done? It feels like, based on his fact number two, this train is pulling out of the station full bore.

Blake Oliver: Maybe at Intuit, they've sort of got their wires crossed a little bit in terms of the messaging - how much of a test is this - or has the decision already been made, and saying that it's a test is a way to mitigate some of the potential downside response from the ProAdvisor community, which is understandably concerned.

Blake Oliver: There's been quite a lot going on in the ProAdvisor community; folks saying ... Well, one big concern is even if you don't view Intuit as a competitor at this price point, $200 a month, are they anchoring pricing low? We discussed that on our first episode on this topic.

Blake Oliver: Another question is just simply having your software provider compete, in any way, with you is questionable. What's to stop them from then offering more higher-level services in the future? There's arguments on this, the practicality, the principle of it.

Blake Oliver: I think a lot of those questions are just sort of self-evident. I don't think I'd ever want to be potentially competing in the services realm with my software provider, necessarily. Accountants have been a very, very dedicated, loyal channel for Intuit for years, and years, and years, recommending their products, promoting their products. It's a big reason why Intuit has such massive market dominance is because bookkeepers, and accountants only will use QuickBooks, in the United States, at least.

David Leary: You've covered that really well, these open questions, in your summary, but I think one that's really interesting that you ... You really put in some work this weekend. You and I had opposite weekends. I'm breaking up tile, and concrete in a bathroom to expose a pipe underground that I could put my finger in, and you did some research.

David Leary: You really dug in, because you found quotes from a conference call about TurboTax Live, and if you really ... Like you said, you read these quotes ... I'll let you read them; you really made the conclusion that this is exactly what's happening right now with QuickBooks Live.

Blake Oliver: If you go to the transcript of Intuit's third-quarter earnings call from last year, after tax season, CEO Brad Smith, who is now the former CEO, had some really interesting things to say about TurboTax Live in its first season. I'll read some of these quotes, and, in your mind, as I read these quotes, just replace TurboTax Live with QuickBooks Live, because we've basically figured out they're essentially the same service, just with different products. One is with TurboTax; one is with QuickBooks, but they even both have Claudell as the face of the product.

Blake Oliver: Let me read this for you: "We're pleased with the results of our TurboTax Live offering in its first season. TurboTax Live has the potential to be transformative to our consumer business in the years to come. It opens up the 20 billion assisted-tax-prep category, and it provides us with an opportunity to grow our dollar share, while increasing our average revenue per return. We're just getting started with TurboTax Live, and we are looking forward to what we can deliver next season.".

Blake Oliver: Okay, great, TurboTax Live clearly did well. Brad Smith was very excited about it. Enough to bring it out- mention it specifically on the earnings call. The analysts wanted to know a little bit more, so they asked some more questions, and the responses from Brad Smith are very revealing.

Blake Oliver: He says, "The other thing we wanted to see is if we could change the source of new customers; get people out of tax store, and CPAs. So far, the mix of new customers, as we finish this season, also looks like we've been successful in proving that hypothesis. So, as we lean into next year the primary objective is going to be to transform the 20 billion assisted-tax-prep category, and begin to bring more of them into the do-it-yourself category. We think that will be the big opportunity for us over the long run."

Blake Oliver: Finally, he said, "We're now converting people who have already adopted a method, and with TurboTax Live, we're converting them from higher-priced alternatives. When they come into our category, we're getting three times the average revenue per customer for those customers that come in with TurboTax Live.".

Blake Oliver: That means the only way that's happening is if TurboTax Live is stealing customers, is taking business from higher-priced alternatives. He said it himself. What are the higher-priced alternatives? Independent CPAs, tax stores, but especially, I think, independent tax-preparers.

Blake Oliver: Now. let's replace TurboTax Live with QuickBooks Live. Same principle. It's the same type of service - assisted bookkeeping, assisted tax prep. They are gonna make a bundle on this, and they're gonna do it. Intuit is a public company. Their primary obligation is not to accountants, and bookkeepers, it's to their shareholders, and then, their customers. They create value for their customers. They create capital for their shareholders. To me, this is inevitable. If they passed it up, they'd actually be negligent.

David Leary: It's not just the inevitable. Your argument is the road map, and plans are right here in front of all of us.

Blake Oliver: Yeah, they've done it already. They started in 2017, and they did it successfully. Intuit's a smart company.

David Leary: Not only that, I think you go on to talk about competitors are doing this. You have Bench doing this ... We'll talk about some of these other competitors, because , coincidentally, in the same week, some competitors have made some very interesting announcements, as well. It's just this snowballed all of them, but we're gonna talk about those articles a little more deeper in the podcast, here, I think. What else is a good highlight of yours? I thought it was entertaining how you had a graph of how the use of the word 'bookkeeper' is going away.

Blake Oliver: Yeah, well, and I'm kind of picking on Intuit, because they are the mover in the space right now, and they are the giant. I mean, how can you not? They are the elephant in the room, the only billion-dollar small-business SaaS company, so, they have the ability, and the power to kill bookkeeping.

Blake Oliver: Bookkeeping, though, has already been on the decline for 30 years, ever since Intuit came out with Quicken, the job has been getting more, and more automated. We went from paper ledgers, to digital ledgers, and then, with online accounting now, we're not even entering transactions anymore.

Blake Oliver: I put in this post that if you think about the definition of the word 'bookkeeper,' the definition is a person who records the accounts, or transactions of a business. Well, anyone who has used cloud accounting knows that you really don't need to actually physically manually record them anymore. You can automate 90 percent of that, or more, potentially.

Blake Oliver: This, to me, is just the finishing move in the long decline of bookkeeping. People who call themselves bookkeepers, really, a lot of them aren't bookkeepers anymore, especially in the ProAdvisor community. When I say that bookkeeping is dead, that's not necessarily a bad thing.

David Leary: Yeah, I think, as the week went on, the thoughts went on, I've actually started to think a lot about the name 'Xero.' Why is it called 'Xero?' Part of me is starting to think like Xero bookkeepers, Xero bookkeeping. It may not be; it may not be. I have no idea-

Blake Oliver: I don't know.

David Leary: -but, at least this week, it seems like a perfect name for that. To me, it kind of makes a lot of sense why it's called that, especially

David Leary: if you start thinking about it in the light of this week, and even the stats you have about the number of bookkeepers that used to exist, and the number that exist today.

Blake Oliver: Yeah. We will, of course, keep our listeners informed of any developments that occur in this space. I am on Twitter. If you have inside information into this, and anything going on, let me know. You can hit me up on Twitter; I'm @BlakeTOliver, and David, how about you?

David Leary: @DavidLeary.

Blake Oliver: We usually finish our shows like that, but we're not quite done yet, right, David? We've got some more excellent cloud-accounting news to cover.

David Leary: Yeah, I think there's two still tied to this Intuit thing, and you have them linked in, actually, your blog post. It's Hector Garcia, and I always forget the other person's name ... Kirk Bowman. They make a video together, and Hector Garcia really posed an interesting question: what if bookkeeping did not exist at all. It's very, very good. There's a lot of deep thoughts on it. I think it's a definitely an article- video worth watching.

David Leary: Then, Joe Woodard actually wrote a nice three-page article on his site, Intuitive Accountant. A lot of it covers a lot of the same stuff Blake, and I just talked about. I don't think we have to cover that more. One thing I did find very interesting in here, and I could be nitpicking one line, but I just- it really caught my attention.

David Leary: Joe is giving some suggestions on how people should respond to this. One is to offer a level bookkeeping far above Intuit's possible service, and then, offer services beyond bookkeeping. That's your two strategies if you're a QuickBooks ProAdvisor, and you wanna compete, et cetera, et cetera, but, he actually kinda talks about focusing on businesses that don't use QuickBooks Online.

David Leary: I'll actually read the sentence: "If these businesses don't use QuickBooks Online, you can avoid competition with Intuit's prospective bookkeeping service." Now, I read into this line A) is he talking about QuickBooks Desktop, or B) is he talking about Xero, and Sage, and other competing products? This line just really caught my eyes. There's not a ton in there, and I'm sure Joe will probably do a follow-up post later this week, just because there's a lot happening. That just really caught my eyes. I don't know if you saw that, when you read this article or not, but ...

Blake Oliver: To be honest, I missed that point, because I was reading really fast, and I'm glad you brought it up. I think that there is a humongous opportunity right now for Xero to go after all those ProAdvisors who no longer feel that Intuit is in their corner.

Blake Oliver: If Xero says, "We're not gonna try to automate you guys; we're not gonna try to build our own bookkeeping service, our own accounting services; we're just gonna focus on the software, and we're gonna support you," then, I think that's a message that would resonate, right now, with accountants, and bookkeepers who are feeling threatened.

David Leary: Yes, they totally ... Xero could do something like that.

Blake Oliver: Part of the reason that Xero has had such a hard time penetrating the US market has been accountants' and bookkeepers' loyalty to QuickBooks, and to Intuit, because Intuit has been good to them, but that could all be disrupted by this. We'll have to see how it pans out.

David Leary: Yeah, unless you subscribe to the theory that I do that there's no way Xero, and Sage don't do this, as well. Proof of this is kind of in our next articles.

Blake Oliver: Yeah, let's hear it.

David Leary: Let's jump into inDinero. inDinero really does outsourced accounting, and they are a software platform. In a way it's inDinero with live bookkeeping, if you wanna think about it that way.

Blake Oliver: They have built their own accounting general ledger. They don't use QuickBooks; they don't use Xero. They are their own thing, right?

David Leary: Yeah, they're full stack; have their own ... But they now purchased an accounting firm.

Blake Oliver: Oh, wow, mAccounting. They were on the podcast.

David Leary: Oh, really? Okay, small world.

Blake Oliver: Yeah, I hadn't seen this before we got on. So, that's ... Wow.

David Leary: Yes, Intuit's doing this, or testing this, if we wanna use that verbiage, but everybody ... There's other people doing this, as well, and they're tagging it from a different direction. Instead of maybe partnering, or working with bookkeepers, they're just buying firms, and doing. inDinero is.

David Leary: I think the other example of this is you can look at ... There's an article about FreshBooks. FreshBooks, now ... This came out, and a lot of this news, I think, would've been big on its own, but the Intuit news was just gigantic.

Blake Oliver: Yeah.

David Leary: FreshBooks is now announcing they're supporting double-entry accounting, and bank reconciliations.

Blake Oliver: Yeah, that's big, because they claim to have millions of users, and mostly small freelancers. They started out as invoicing software, and they gradually added expensing, and all that stuff, but it was still always ... Most accountants wouldn't recommend it. If you went and hired an accountant, or a bookkeeper, they'd switch you off of FreshBooks, or they'd use Xero, or QuickBooks to do the accounting, while you still used FreshBooks for invoicing, but, now, that could change, right?

David Leary: Yeah. They flat out state, "The update should enable it to attract more accounting partners to its platform." This is kind of a big game-changer for them now. A little deeper in the article, it does mention that even though they announced bank reconciliation, they don't have any bank feeds. Here comes that fine line of is it efficient to use something without bank feeds?

Blake Oliver: I'm actually not sure if that is correct, because I do recall that you can import transactions from banks.

David Leary: It's not bank feeds. You have to go download the QBO files-.

Blake Oliver: Are you sure?

David Leary: -and import those in. Yeah ... It does include an automated bank import, but this includes some manual intervention to download the bank data.

Blake Oliver: No, no, so there is ... It's limited. I think that, because this article appeared on Enterprise Times, which is a UK site, but if you go to the FreshBooks website, you can see that they have automatic expense reporting available to North American users.

David Leary: Okay, yeah. Thanks for clarifying.

Blake Oliver: They're doing like the Yodlee thing, where you go on the Expenses tab, you click Connect Your Bank, you put it in your bank, and your credentials, and then it will import the transactions. Then, you can categorize this.

David Leary: This is a big deal, that they're now trying to come in, and compete with QuickBooks, as well?

Blake Oliver: Maybe this type of competition is what is incentivizing Intuit to move up into services, because FreshBooks is admittedly far easier to use than QuickBooks. It was designed, from the beginning, not for accountants at all. It was designed for freelancers, so it is dead simple to use. I know because I, myself, used it when I first started out bookkeeping. I wanted a simple time-tracking/invoicing solution, and I set up a FreshBooks account because it was faster for me to do that on my mobile phone, at the time, than to use QuickBooks.

David Leary: That was one of the points somebody brought up in this article was is this a risky strategy? Because, if they add some complexity to FreshBooks, does that mean their core users are going to leave, and go to something simpler, like a Wave or a ZipBooks, or it even mentions going to Pluto, which is kind of just the payments, and receivables platform.

David Leary: It's really interesting to see where this goes, but the key here is the industry is changing. Other people are doing this work. Another example of this is maybe somebody, though, that has done it and failed. Do you wanna talk about that? KPMG?

Blake Oliver: Oh, yeah. We've been speaking about success, and Intuit's great success, and obviously FreshBooks is doing really well. Well, the Big Four just can't seem to figure out how to provide small-business accounting services.

Blake Oliver: I think this would have been the story we led with on any other week. This appeared in AccountingWEB. It's an article called, "KPMG Shutters Small Business Accounting Unit." In the UK, KPMG has been trying for, what, a couple of years now?

David Leary: The service launched in October of 2014, after an 18-month trial. It already had an 18-month trial, before that. They had almost a staff of 200 to handle the client work.

Blake Oliver: I didn't realize it was that big. The service is called KPMG Small Business Accounting. That's what they did. They did small-business bookkeeping/accounting with a pledge to "disrupt, and dominate the SME market," and promised small businesses that you "can pay us the same as your current accountant, but we'll give you more." Yeah, they failed. I feel like there have actually been a few other services like this that have just not worked out, or have sort of just dwindled into irrelevance.

David Leary: I think the interesting tie to this, back to testing with QuickBooks. Some people's reactions to Intuit doing this is like, "Good luck. You're just gonna mess it up. Look what KPMG did ..." [cross talk]

Blake Oliver: -it's so wrong.

David Leary: It is a little wrong, but, at the same time, if you read this, KPMG promised people their own dedicated accountant, with experience. They offered small businesses ... Then, if you start reading the reasons people are leaving, or [the reason it] failed, many weren't happy with the service they got, and they were unhappy about the people's knowledge of their business. Mistakes were being made; churn of client account managers. These are scale problems.

Blake Oliver: Yeah.

David Leary: That is going to be the interesting part of this test is not whether it's a viable service. The test is can Intuit build this, and scale it. That is the true test.

Blake Oliver: Well, as somebody who has built, and scaled, to a small degree, a online bookkeeping company, I can tell you that is the biggest challenge is getting bigger, and not having crazy amounts of turnover, and dissatisfied clients, and disparate processes, and whatnot.

Blake Oliver: I feel like Intuit is the one company, the one big company, that can do it. The Big Four definitely can't, because they haven't figured out how to standardize, or productize hardly anything, especially when it comes to small businesses. That's why they're so expensive. Hell, they're still billing hourly for pretty much everything. There's just no incentive under that model to do anything to streamline, and standardize.

Blake Oliver: They're the complete wrong ones to do it, but Intuit, complete right company to build an effective online bookkeeping service, for a very low price point, like $200 dollars a month. The way they'll do it is by very carefully limiting the scope of services; by putting the bookkeepers, and the clients on rails, using software, which they can do, because they built the software.

Blake Oliver: Your bookkeeper isn't ... You're not gonna be able to ask your bookkeeper to go file your sales tax, because they can't do it in QuickBooks. They'll only be able to help you with stuff they can do in QuickBooks, which will help them minimize the scope; prevent scope creep.

Blake Oliver: The fact that they have a delivery system of on-demand video inside of the app also means that they could potentially just have a pool of bookkeepers, where you don't even get assigned one. That would be so much more efficient than the traditional accounting-firm model of assigning bookkeepers, because, of course, what's the problem when you assign staff? As soon as they leave, you gotta get somebody else in there; gotta transfer that knowledge; doesn't always happen. Intuit's perfect for this.

David Leary: I know we have a couple more articles, and I'm not sure if we should quickly do those, because in this KPMG article, there's a great quote; two quotes. Maybe I'll read them now, and then, if you want to cut them, and then play them at the end, in summary? Because I think it really summarizes kind of the week.

Blake Oliver: All right, let's do it.

David Leary: All right, so here we go. Commenting on the news, Daren Moore, Group Commercial Director at TaxAssist Accountants added, so this is gonna be his quote ... "Servicing the small-business market has always been about building a good relationship with the client to provide sound advice alongside the compliance piece. Attempting to deliver that service remotely presents a number of challenges, which technology won't always solve alone. Clients want, and rely on that relationship and the high street accountant has adapted to deliver the best of both worlds approach with local relationships on the ground alongside smart digital solutions to help people run their business.”

Blake Oliver: What's he saying there?

David Leary: What he's saying is you can't just throw technology at this, at small businesses; you just can't solve it that way. It's a relationship.

Blake Oliver: Right.

David Leary: I know we were talking about this a little bit, about the Uber ... Doing Uber ... For Uber ... These cases are very similar, but doing bookkeeping the same for every single small business could be very, very difficult. One thing Intuit's always been good at is relationships. If Intuit can figure out how to do the relationship part of this, they're gonna build the technology, but the relationships are really the key here, and whoever solves that ... The Big Four A) kinda suck at technology, and they suck at relationships [cross talk] that's the reason this failed.

Blake Oliver: -well, they're great at relationships, but only very high-touch personal relationships, like, you have this great relationship with that partner at KPMG, but they're not gonna give that to you, as a small business owner. They can't do it at scale. It's all scale.

Blake Oliver: There's one more thing I wanna touch on before we go, which is this Bill.com plus Amex thing. This is a video that appeared on LinkedIn that you pointed me to, and I just think it's fascinating. There's not a lot of info, but we should talk about it. What is going on with Bill.com?

David Leary: I think Bill.com announced ... We may have talked about it 20 episodes ago, or whatever. Bill.com's starting to do a lot more partnerships with banks. Instead of you going to your bank ... A lot of small businesses do this still; they just go to their bank, or their credit union website, and go to the Pay Bills section of that website, and pay their bills from there, because it's free.

Blake Oliver: Right.

David Leary: Bill.com, I think, knows that, so, Bill.com is, I think, getting closer relationships with banks. If you have a bank account at Chase, and you're a small business, when you go to the Bill Pay section, instead of seeing the same Bill Pay every other Chase customer has, you're probably gonna see some version of a Bill.com.

Blake Oliver: Yeah.

David Leary: Apparently, now, this is kind of launching with American Express. You're gonna be able to pay your vendors inside of American Express, using Bill.com. It's not very clear; there's just a video. I didn't see ... There's been so much Intuit news, I haven't .... I didn't see the actual article, I just see this little post from Bill.com.

Blake Oliver: One of the things that they mentioned in this video is paying vendors using American Express via single-use virtual cards, which is really cool for business owners, because one of the problems you have is that you have a business card from Amex, for instance, that you give to your marketing department. Then, you might have like 12 people using that card on various different sites, and then, the number gets stolen.

Blake Oliver: Now, all of a sudden, you have dozens of software subscriptions that get shut down, because the credit card is failing, because you had to get a new number. Where, if you give out single-use virtual cards for purchases, then that number is just used for that one purchase. If it gets stolen, it doesn't work. That's a really cool feature, and I think it could be really, really helpful.

David Leary: What I don't understand about that is the tie-in with Bill.com, then, because MasterCard and Visa have virtual cards, through their APIs, and third-party apps. I'm using Divvy. I have a bunch of virtual card set up on that. I think we've talked about [cross talk] before. They have a virtual card. I like to spin up, like your example, right spin up virtual cards for all the different SaaS apps I sign up for, just so I don't have to ... It's just easier.

David Leary: I don't know where this ties in with Bill.com. Does that mean Bill.com's gonna allow you to instantly, inside the product-

Blake Oliver: Yeah, so-

David Leary: -you'll pay with the virtual card, boom-boom-boom, and it just spins it up. You don't have to leave to go create your virtual card on some American Express website.

Blake Oliver: You won't have to. I guarantee you that. I'm speculating here, because I'm only familiar with this from the Sage Intacct side. I know that in Sage Intacct, you can connect to Amex, and you can pay with your Amex inside of Sage Intacct, using their Bill Pay feature. I think this is similar. The idea will be you go into Bill.com, and normally, you would see two options - pay by check, or pay by ACH.

Blake Oliver: In the future, you will see a pay with Amex option, and then, when you pay, your vendor gets paid, and then it goes on to your Amex bill. I'm not sure what the fees are gonna be-

David Leary: Got it.

Blake Oliver: -how that's gonna work. Are you gonna absorb a fee? Is the vendor gonna absorb a fee to get paid that way? That an open question. Bill.com, if you're listening, send us the info, because we wanna talk about it on the podcast.

David Leary: Yeah, and I see they made a comment. "Hey, we'd love to hear the podcast. Please share the details ...".

Blake Oliver: I've gotta respond with a link.

David Leary: I got a response, but it was a little too late. We're recording live at this point, Bill.com. We'll reach out ... Maybe we'll have more on this story next week.

Blake Oliver: With that, I've gotta go, David. It was great talking to you. If people wanna get in touch, what's the best place for them to do that?

David Leary: To get a hold of me, it's gonna be @DavidLeary.

Blake Oliver: I am @BlakeTOliver on Twitter, or you can connect with me on LinkedIn. Don't forget, we've got a page on Facebook for The Cloud Accounting Podcast, so just go to Cloud Accounting Podcast on Facebook. You can also subscribe to my email list to get show notes for each podcast episode emailed to you automatically, every time we publish an episode.

Blake Oliver: Why would you wanna do that? Because then, all these articles we talk about, all this news we talk about, you're gonna get that in your email inbox with links to every article, and a brief description, so you can go in there after you listen to the episode, click the links, and get the full story, or, hey, you can share out those links on your network, and be on the cutting edge of accounting technology, and look like you know everything that's going on. Subscribe at CloudAccountingPodcast.com, and don't forget to rate us on iTunes. We'd love to get more five-star reviews, and tell your friends.

David Leary: And that's a wrap.

Blake Oliver: Bye.

David Leary: Bye, everybody.

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