Bookkeeping is Dead: How Intuit Will Kill It for Good

Last week, an accountant posted in a private Facebook forum that she had noticed something new on the Intuit QuickBooks website:


Intuit is apparently offering on-demand bookkeeping services bundled with its QuickBooks online accounting software for an extra $200 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 webpage, "A QuickBooks Bookkeeper sets up your books via live video chat and is available for you all year long.”  


This new bookkeeping offering may come as a shock to many QuickBooks ProAdvisors (Intuit’s channel partners), but this is not a new concept for Intuit. The company has been doing it for years on the tax side of the business.


For more details and analysis on QuickBooks Live, listen to a special episode of the Cloud Accounting Podcast: “Is Intuit launching an Uber for Bookkeeping?”


It’s TurboTax Live for bookkeeping

In 2017, Intuit launched TurboTax Live, a service that connects customers to Enrolled Agents (EAs) or Certified Public Accountants (CPAs) “available on-demand via one-way video... to not only provide personalized advice and answers, but also a one-on-one review of a customer’s tax return – including the ability to sign and file if needed.”

As with the TurboTax Live offering, QuickBooks Live customers will be able to access bookkeepers via video chat embedded directly in the QuickBooks application in their web browsers.

The big difference is, of course, that until this point, Intuit has not competed directly with its own ProAdvisor network. ProAdvisors are Intuit’s accounting and bookkeeping channel partners for the QuickBooks line of products.

As of December 2017, there were more than 50,000 certified QuickBooks ProAdvisors. They support QuickBooks users with accounting and bookkeeping services, tax and financial planning, and QuickBooks setup and consultation.

The launch of QuickBooks Live means that Intuit will be competing directly with their channel partners for at least a portion of the services they have traditionally offered, including QuickBooks setup and support, and bookkeeping.

A mixed response from the accounting and bookkeeping community

Response from the accounting and bookkeeping community has been varied. Industry analyst and consultant Matt Paff reminded everyone that he’s been predicting vendors would offer bookkeeping services since at least mid-2018.

Supporters say they aren’t worried because they’d never take a client at Intuit’s price point ($200 per month) and are already successful at differentiating their own services from other similar low-end bookkeeping options.

Critics say that it is hypocritical of Intuit to say that it supports the bookkeeping community that promotes its products while surreptitiously building a potential competitor. The ultimate goal, the critics say, is to eliminate the human element entirely.

“This is only a test”

The official response from Intuit is that “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.”

But is it really “just a test”?

One accountant pointed me to a job posting on the Intuit Careers website 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.”

It would be unusual for Intuit to post a job to run the program if they hadn’t already approved the budget.

According to Joe Woodard on Twitter, he spoke to Intuit and learned that Intuit is “not testing market viability” and that “they intend to move forward with a program of this nature. Only the specifics are TBD.”

It seems that only “test” Intuit is running is to decide how much to charge and what scope of services to offer.

The Uber for Bookkeeping is inevitable

Intuit will build an Uber for Bookkeeping in the form of QuickBooks Live. It’s inevitable if you consider the success Intuit has had with its TurboTax Live offering over the past two years. Here’s what former Intuit CEO Brad Smith had to say about it on their third-quarter conference call:

...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.

Later in the conference call, in response to an analyst question, Brad Smith offered more insight:

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. And 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.

According to their own (former) CEO, Intuit’s primary goal is to “transform the assisted tax prep category,” which means getting people who would otherwise go to CPAs to use TurboTax Live instead. He even says at one point in the call,

...we’re now converting people who already adopted a method. And with TurboTax Live, we’re converting them from higher-priced alternatives. So, 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.

What are those higher-priced alternatives? Probably a lot of independent EAs and CPAs, and “tax stores” such as H&R Block.

Just replace “assisted tax prep” with “assisted bookkeeping,” “CPAs” with “bookkeepers,” and “TurboTax Live” with “QuickBooks Live,” and it’s clear that Intuit’s goal with QuickBooks Live is to get people who would otherwise go to independent bookkeepers, bookkeeping firms, or accounting firms for help to use QuickBooks Live instead.

The competition is already doing it

It’s hard to blame Intuit for getting into assisted bookkeeping when their competition is already starting to do it. Startups such as Indinero and Bench are already bundling software plus bookkeeping services successfully.

Since 2012, Bench has raised $53 million to provide assisted bookkeeping services on its proprietary software. They now count 350 employees and 5,000+ customers paying between $95 and $495 per month. Can we really expect Intuit to pass up a similar opportunity to get its customers to go from paying $30 per month for software alone to $230 per month for software plus a service?

The end of bookkeeping has been 30+ years in the making

Ever since Intuit released Quicken, its first product, 36 years ago, the end of bookkeeping as a profession has been inevitable.

In fact, use of the word “bookkeeper” peaked in 1919 and has been on a steady decline ever since.

Prior to accounting software, businesses hired bookkeepers to record all their transactions in paper ledgers. Thus the term “bookkeeper.” A person who literally “keeps the books.”

Quicken and later QuickBooks digitized those books. There was still a need to employ bookkeepers — just fewer of them. They still entered transactions one by one, but categorized them in digital ledgers instead of paper.

Over the past ten years, the development of online accounting software, APIs, bank feeds, and machine learning has gradually reduced the need to “key in” transactions. Now, tech savvy bookkeepers who understand how to integrate applications hardly ever do data entry. Their job is to ensure that transactions are posted properly by automated systems.

Companies such as Intuit that have learned to automate many parts of the bookkeeping process know there is still much to be automated, but don’t necessarily know what that is. Hence the need for in-house bookkeepers to help them figure out across tens of thousands of small businesses which part of the bookkeeping process to automate next.

Merriam-Webster defines a bookkeeper as “A person who records the accounts or transactions of a business.” If you aren’t recording those transactions, are you really a bookkeeper?

It’s only a matter of time until artificial intelligence becomes sophisticated enough to do it all. With its assisted bookkeeping service, Intuit is just filling the gap until the technology can catch up.

The impact on bookkeepers

According to the Bureau of Labor Statistics, there were 1.7 million “bookkeeping, accounting, and auditing clerks” in the United States in 2016. That dwarfs the number of QuickBooks ProAdvisors, which is around 50,000.

Many of these jobs are all going away. The question is, how soon?

The BLS only projects a one percent decline in employment for these jobs from 2016 to 2026. I suspect they are vastly underestimating the impact of automation. Services such as QuickBooks Live will drastically reduce demand for bookkeepers.

Even if Intuit hires thousands or tens of thousands of bookkeepers, it will be only a fraction of the current jobs. And will the wages be equivalent? It appears that TurboTax Live experts make somewhere between $17 to $22 per hour. That’s less than the mean hourly wage of tax preparers nationwide, so it’s not a good barometer of how compensation will shape up for Intuit’s future force of QuickBooks Live bookkeepers.

That’s why bookkeepers had better retrain and learn to manage the machines. That’s what I did. By mastering cloud accounting technology and getting my CPA, I turned myself from a bookkeeper into what I like to call an “accounting technologist.” It’s a rare set of skills that allows me to write my own ticket.

If bookkeepers are going down, should accountants be worried?

While traditional bookkeeping is all about recording financial transactions, accounting is about interpreting, classifying, analyzing, reporting, and summarizing financial data.

Some of this work can be automated, but not all of it.

That’s good news for accountants, especially since there’s already a shortage of accounting and finance talent. Rather than taking away their jobs, automation will make the jobs of highly skilled workers more interesting and flexible.

At my company, FloQast, we’re working on embedding automation tools into our close management software for financial controllers. These tools will allow them to reduce the time they spend on reconciliations so they can focus on higher value activities, such as internal controls, risk management, and strategic projections.

That’s good news for accountants working in corporate accounting departments. But what about owners of accounting firms or bookkeeping services?

Challenges for accounting firms offering bookkeeping services

My biggest concern with Intuit’s move is that by setting the price of QuickBooks Live at $200 per month, they have effectively anchored the price of monthly basic bookkeeping services at a very low price point. It may prove difficult for accountants and CPAs to differentiate their services and convince clients to pay more for bookkeeping. Just having Intuit in the marketplace for bookkeeping services could drive prices downward.

Additionally, bookkeeping is a basic service that brings clients in the door for many accounting firms. These firms then upsell their bookkeeping clients on a variety of other services. If prospects go first to Intuit for the bookkeeping, there’s a good chance they’ll never walk in the door of that accounting firm.

Finally, while Intuit hasn’t settled on a final scope of services or price point for QuickBooks Live, we can safely assume that it will be under $500 per month (like Bench) and include categorization of transactions, bank reconciliations, financial statement preparation, and a meeting to review the reports.

What’s to prevent Intuit from going upstream in the future once it has dominated over the market for bookkeeping? Nothing, as far as I can tell.

For more about QuickBooks Live, and to stay up-to-date on breaking news, listen to the Cloud Accounting Podcast, your #1 source for news and analysis at the intersection of accounting and technology.

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I’d love to hear your opinions! Please let me know them in the comments.

More expert commentary and discussion

Joe Woodard on Insightful Accountant

Joe Woodard asks “Is Intuit® Building the 'H&R Block®' of Bookkeeping?” on Insightful Accountant. In the article, Joe lays out six facts about QuickBooks Live based on his discussions with Intuit representatives. He also offers up major concerns about the new service from the accountant/bookkeeper perspective, and suggests a couple of possible by responses that firms to protect themselves from competition by Intuit’s new service.

AltAccountant Podcast on YouTube

On the AltAccountant Podcast, Hector Garcia and Kirk Bowman seek to answer the question “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?”