Is QuickBooks Too Big to Fail?

Posted 5 years ago in Small Business Tips
by Tim Chaves

When it comes to accounting software for businesses, QuickBooks is the 800-pound gorilla in the room. It is well-known and well-established—the first accounting software available. Goliaths like this are intimidating. So, why do we even try to compete? Is QuickBooks too big to fail?

First, let’s walk through why we chose to create ZipBooks.

Limited Options

When it comes to accounting software, there aren’t many options. You have QuickBooks, Xero, and a couple of others, but there just really aren’t many companies to choose from.

And one glance at Twitter or Google Reviews will bring an endless stream of complaints about Quickbooks. Customers find that their software is too complicated and has a lot of technical issues. They have trouble migrating from one online version to the next.

With their downloaded software, they charge you for each new version. For instance, if you want to upgrade your QuickBooks 2013 to 2016, you’re going to have to pay again. If you want to migrate from the downloaded 2016 product to Quickbooks Online, you’re going to have to pay for that as well. And there are issues that are still not resolved regarding importing your data from the downloaded software to the online software.

There are a lot of people who believe that the QuickBooks Online experience is pretty half baked. And they constantly nickels and dimes you. They may advertise a really low introductory price, but you don’t get very much for what you’re paying for.

This might not apply if you’re an accountant who has had the same version of QuickBooks for a long time and are comfortable using it, because you’re probably not going to switch to QuickBooks Online. But small businesses frequently use QuickBooks Online to avoid the cost of the downloaded version. So, the increased cost, and various charges added on around every corner can make small business owners pretty disappointed.

Problems with the Introductory Offer

Any independent contractor can do QuickBooks self-employed. They have an introductory offer for around $5 a month, but the added fees essentially makes the cost about $10 a month, and all you’re able to do is track miles, track income, organize expenses, and send invoices. So you’re not really even in the realm of a full accounting software at that point. And if you get additional services, it costs even more.

Payroll is $12 a month plus $5 per employee per month, and you still have to do a lot of it yourself. The full service payroll is $40 a month plus $5 per employee per month which is a huge jump from the initial offer of $5 a month for someone who is self-employed.

So the real entry level cost for small businesses to use Quickbooks Online is $15 a month. They still offer income tracking, expense organization, and tax deduction maximization (basically just categorizing expenses rather than maximizing tax deductions), but they don’t track miles. So, they actually take away some of the features that you have at the lower dollar amount which is frustrating.

You can send invoices and estimates, and track sales tax in a very basic way, but you can’t add multiple users or track time.

We got tired of Quickbooks and decided that small business deserved better. We created ZipBooks to be a small businesses asset, without breaking the bank. So, basically QuickBooks will charge you $15 a month for basic features that you could get (plus more) at ZipBooks for FREE.

Problems with QuickBooks Online Essentials

The QBO Essentials plan is $35 a month, with no free trial, so you have to pay without knowing if it’s a good fit. This is a low-quality version of what we offer for only $15 a month, and we let you try it before paying.

QuickBooks basic payroll is $12 a month plus $5 per employee per month, but their full service is $40 a month plus $5 per employee per month. And their full service is about the same as what we offer through Gusto. They draw you in by giving you options at a lower price that are not going to be sustainable long term.

Problems with QuickBooks Plus

On their site, QuickBooks states that the most popular plan on their website is QuickBooks Plus. It starts off at $35 a month for QuickBooks Online Plus if you start paying that day. But then after six months, it goes up to $50 a month. For $50 a month they give you all their features, plus the ability to track time—a feature that’s included in the $15 month plan.

And even with their QuickBooks Plus plan, they don’t include tagging. For $35 a month, ZipBooks allows you to use inventory tracking, which lets you tag by multiple variables (like location, product, or customer) so can easily keep tabs on each area. You can filter your income statement and balance sheet based on those tags to more easily analyze various aspects of your business.

Why is it so hard for someone else to overtake Quickbooks?

It’s what accountants use.

Most accountants know how to use Quickbooks, so they will continue to use it. Financial services professional aren’t going to make big changes because they don’t want to risk messing up someone’s financial information. So, if you’re using an accountant, then you’re probably going to end up sticking with Quickbooks.

People don’t know about other options.

A lot of small business owners are using Quickbooks because they simply don’t know that there are other good options. They may be worried about picking anything but the brand name that they are used to, even though it’s expensive and has technical issues.

QuickBooks has history.

Quickbooks has a huge head start. They’ve been the top dog of accounting software for years and years. So, they have had time not only to build up their brand, but also to build features that other companies haven’t had the time to develop. It will take time for anyone who wants to catch up, in terms of the complete feature set.

So, how do we tackle that?

We have developed a three tier approach.

    1. We don’t have any technical debt. Quickbooks Online was a rushed response to customer demands. Quickbooks felt like they would lose to Xero if they didn’t build an online component right away. But because they rushed it, it has a lot of problems and they can’t scale features very quickly.

      When we built our ZipBooks framework, we tested heavily so that we could work out all the bugs before our customers used it.

    2. We know quality takes time. We have to acknowledge that we aren’t going to be able to build everything that they have right away. However, while we might only be able to start off with 20% of the features, that 20% is what 80% of people are looking for.

      For example, looking at QuickBooks Online pricing tiers, we’re already outstripping them in terms of the actual feature set. Our pricing is much better, our technology is faster. And since we have a smaller business with fewer employees, it’s easier to implement change to suit our customers’ needs.

    3. We provide excellent customer service. We have in-app chat, email, and lots of other ways for you to contact us. You can even reach out to us on social media. We’re trying to be where you are. We are listening, so we can help when you have questions, problems, or complaints. Even if we can’t fix everything right away, we want you to connect to a real, live person who cares.

So, is QuickBooks too big to fail? We’ll see. Right now, we’re happy to take on this goliath just to make accounting software simpler and cheaper for small business owners like you.

About Tim

Tim is Founder and CEO of ZipBooks. He keeps his desk really nice and neat.

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