The drive by accounting software companies to centralise financial services in their programs has enormous implications for accountants.
Business loans are already available through QuickBooks Online and insurance will follow. It raises a host of questions for accountants about their role in advising business.
I spoke to Jim McGinnis, Intuit vice president and leader of the accountants and advisors group, how he thinks the changes will affect accountants and their relationships with software companies and business owners.
You can listen to the audio here or read an edited transcript below.
Sholto: I think there’s an interesting relationship between the accountant and the business owner and the lending institution. So you might have a situation today where an accountant might be a financial advisor and have an arrangement with the local bank. The bank manager might get a kick back of a thousand dollars in a loan. Clearly that’s not going to be the case with where the loans are available through the software.
So it then also raises the question, whose customer is it? Is the commission going to Quickbooks? Should the accountant get a cut because they have introduced the customer to that platform? Does it raise regulatory issues for accountants if they’re saying they press that button? What happens now?
Jim: Those are very exciting questions that we don’t fully have all the answers to. Some of the principles would be that the value should go where the value is created and so as a trusted advisor, I would expect that the accountants would participate. but at the same time “trusted advisor” means helping small businesses make the right choice and not getting kickbacks. And gosh I hate that term!
Whenever we talk to accountants about a piece of the action or something, they hate it because they’re professionals. So we don’t want at any part of that kind of thing that will make them feel uncomfortable with their professional creed.
In terms of the legal issues and liabilities, all that has to be managed very carefully as well to make sure that all laws in all countries are followed obviously and that everybody is informed every step of the way of what’s going on and where the incentives are and where the opportunities are. So being in a large company, I think we’re well positioned to help accountants and small business navigate those very unknown waters, right?
Sholto: So, how does it work today in the US. The actual workflow for pressing that button that brings up the funding for OnDeck. Does that appear in the program itself?
Jim: It’s not in the program itself. It comes outside of the program, you authorize OnDeck, to pull data from the program and then you make the relationship’s with OnDeck as far as it goes but it’s outside of the program.
Sholto: And there’s a commission paid to Intuit for that introduction?
Jim: That’s right.
Sholto: Do you think at any stage if the accountant already has the option to arrange financing directly with a normal bricks and mortar bank. Is there going to be any replication of that so you think with Intuit paying some kind of commission?
Jim: We don’t have any plans, nothing formally planned out on that. But as I said before, what we’re trying to do is offer the best options for small businesses and so something like this could be competitive with things that the accountant might have directly whether the accountant might steer them towards this and then someday we may work with OnDeck and others to work out how the accountant works into the relationship as well. But all that is speculative.
Sholto: Ok. But the most likely scenario is there will be multiple lending institutions connecting to Quickbooks, right?
Jim: Absolutely! We feel passionately about helping our small businesses thrive and we feel very importantly that it’s the small businesses’ choice and the accountant’s choice working with small businesses. So, hopefully we’ll never make the mistake of telling people what they need to do or have to do but instead we’ll just use our technology and our expertise to facilitate options.
Sholto: Dan Wernikoff yesterday said that Intuit will at some point start offering insurance. Quickbooks then becomes quite a powerful vehicle for all sorts of things. Do you see the accountant then also reflecting that in their business model in becoming this one stop shop for everything? It’s imagining quite a larger role for the accountant then, isn’t it?
Jim: That’s a really great way to frame it. Absolutely. I started out, I’ll keep going where I was. We really see our role is in improving the financing of small business and accountants so profoundly they can’t imagine going back – we share that with the accountants. So anything that we can do to help improve the financial lives of small businesses is within our wheelhouse and we would share that with the accountants, absolutely.
So their role grows from being in the terrible days of data entry and purely compliance charged on an hourly basis to truly moving to a trusted advisor and not just on necessarily on the things that they advise on now but the full array of financial opportunities. It’s a very exciting time.
Sholto: To be more specific, what are the financial opportunities? When would the insurance becoming part of a true Quickbooks Online? It doesn’t do it already. There’s no integration, is there? So when do you see that happening, for accountants who want to get prepared and start thinking about this stuff? What timeframes are we talking?
Jim: That’s a wonderful question. These are things that we’re thinking about, we’re working on and there’s always a balance between what we ourselves can do and what we can do by facilitating connections with other providers. We don’t have any specific timings that we can say or announce by any means but at the same time it’s all happening organically.
I think you heard yesterday 1,400 applications now connected and entrepreneurs are out there trying to figure out these opportunities and connecting to the QBO ecosystem. And then we want to leverage our relationship with accountants to help them improve the financial lives of small businesses. It’s quite an exciting space, isn’t it?
Sholto: Yeah, it’s hugely exciting. So Quickbooks becomes this integration point to the financial services. Do you see it expanding further into the CRM side to the relationship management? There’s going to be so much data in that accounting program already.
Jim: That’s a great question. Well CRM is a broad topic, isn’t it? So Quickbooks Online Accountant, one of its key features is the client list. And the client list has information around what the different clients are and what the next steps are with those people. So we will continue to work on expanding the capabilities of the client list.
When it crosses over to being CRM, I’m not exactly sure but we also know that there are some fabulous partners that we work with who do CRM probably much better than we’ll be able to do and so it’s partly giving the accountants what they need around those the client lists and it’s partly making sure the integrations with the third-party CRMs.
Sholto: Just skipping back to the insurance side of things, part of the timing in Australia is the point of evolution of the financial service providers themselves.
Their systems are big, complex, difficult to integrate. It’s easy for the peer to peer lenders who have no legacy to come along and integrate. Where do you see the insurance side of things, is that held up by legacy systems or are you also talking to disruptors in insurance that can connect with Quickbooks Online?
Jim: Can’t speak specifically to integrations with insurance or insurance companies per se but I can tell you that we’re really focused on the online environment. And so anybody who come up in the industry who wants to integrate with us, we’re really encouraging them to focus their resources and their capabilities on Quickbooks Online as opposed to the desktop side of things and the legacy side of things.
Sholto: Where do you see the quick wins for automation for accounting firms moving to QBO? I mean you’re kind of nominating apps now, you picked out the other day – Receipt Bank, TSheets, Fathom and Bill.com. So, are these the core apps to automate an accounting firm?
Jim: That’s a great question. Actually we’re looking at it in a slightly different frame. The partners that we are selecting to be part of the key partner program with Pro Advisors has something in common. The first is they’re great applications themselves. So we don’t even consider anyone that doesn’t have a high net promoter score (customer satisfaction metric) where they really have really got it dialled in and they’ve been running long enough that they’re in good shape, and on stability and people love using them. We would like to see accountants organically recommending those.
The next is, we need somebody who has shared vision that accountants are our partner and not a channel or customer because we are not just about selling hard to accountants. What We’re about is working with accountants to help improve their financial lives as small businesses. I repeat myself but this is who we are.
And so the ones that I named – Bill.com, Fathom , TSheets, and Receipt Bank – all think of accountants as partners. Then it gets into a little bit of discussion with them and what we ask of them is we ask that they provide accountants specific tools for the partners to run themselves at minimum cost or no cost to the firm because we know that if a firm uses it – they know, use and love and recommend it – then they will help pass it along to the clients.
Second thing we ask for is that they give us at least the best deal that the accountants can pass along because we don’t want to embarrass our accountants by selling something or recommending something at a certain price to a small business only to have a small business going the web or going through another channel and find it was expensive.
So those are the sort of conditions and then it’s just a mutually beneficial relationship where we talk about the benefits to the accountants and small business about those applications and those applications that talk about the benefits of Quickbooks Online and working with an accountant to accountants and small businesses. And you just start to get on to this wonderful, virtual circle.
Last thing as usual is long term relationships. So it’s not a love-’em-and-leave-’em type thing. I deliberately mentioned that the ones that we had from the stage and added but one more which was Fathom. And every few months, when we feel like we can digest it, if we feel like we’ve done a good job partnering with the ones that we have, we’ll add some more in.
So I’m going a long way around of telling you that these weren’t picked because that’s the best way to automate your firm, we’re not cherry-picking it that way. It’s more about picking ones that are great applications for small businesses who share our vision of who accountants are which is as partners.
Sholto: Fantastic. Thanks very much for your time, Jim.
Jim: Cheers, thank you.
Image credit: Pinterest
Caption: Jim McGinnis with Kim Amsbaugh and Basheer Mohamed
Disclosure: Intuit paid for my plane ticket and accommodation to attend QuickBooks Connect.