QuickBooks

What is the Future for QuickBooks Desktop?

Written by Charlie Russell

QuickBooks Desktop?We all know that QuickBooks Online is the focus for Intuit moving forward. If you go to Intuit’s site for QuickBooks it is hard to find information about any of the desktop products. However, QuickBooks Online doesn’t yet come close to providing the features that are available in QuickBooks Premier and QuickBooks Enterprise Solutions. Does Intuit’s focus on QuickBooks Online mean that businesses who rely on QuickBooks desktop products are going to be left behind? I’ve been giving that some thought lately, here’s what I’ve come up with.

There Will Always Be a QuickBooks Desktop, but…

Intuit has been telling us for some time now that QuickBooks Desktop is not going away. Last November I asked Dan Wernikoff (the Intuit Senior Vice President with responsibility for all things QuickBooks, and more) if the desktop product was going away and he said (in my article on Intuit and the Future of QuickBooks Desktop) :

“I can’t see a time when we are not doing a desktop release”

Since that time, though, we can see that the majority of Intuit’s efforts have been focused on QuickBooks Online. Certainly from the marketing and research standpoint. While Intuit is still selling a lot of units of QuickBooks desktop, is the writing on the wall? Is the desktop going to wither away?

If you look at the transcript of Intuit’s fourth quarter 2014 report to investors you can see why Intuit is pushing towards QuickBooks Online:

  • According to Neil Williams, Intuit CFO, QuickBooks Online generates more that $800 in annual revenue per customer, while QuickBooks Desktop generates less than $500 per customer.
  • Brad Smith, Intuit CEO, said that QuickBooks Online is a global platform, which significantly increases their total addressable market.
  • QuickBooks Online enables the “seamless purchase of additional services”, such as payroll and payment solutions. Both of these areas grew significantly when compared to the prior year, and a lot of that growth can be attributed to the growth of QuickBooks Online.

The best way to look at this is another quote from Neil Williams:

We’ve described how the cloud is a better experience for customers. It’s also a better business model for our shareholders since the lifetime revenue of QuickBooks Online customers is greater than that of desktop customers…”

That is pretty clear. Intuit is a publicly traded company, and they have a requirement to do what is best for their shareholders. Their research (the future of small business reports and the cloud will transform small business study) show that Intuit firmly believes that “cloud” and mobile technology will dominate the market soon, and they are focused strongly on being the top company in this area.

Moving QuickBooks Pro and Premier Users to the Cloud

I’ve come to the conclusion that, at least for the moment, Intuit really, really wants all Pro and Premier users to move to QuickBooks Online.

Well, duh. That shouldn’t be a shock to anyone. It has been obvious for some time now. QuickBooks Online is about all you hear them talk about. Go to http://quickbooks.intuit.com/ and everything is focused on the online product.

But does that mean that QuickBooks Pro and Premier are going away soon? And where does that leave the current desktop users who don’t want to move to the cloud, who find that QuickBooks Online doesn’t have the features that they already have in their desktop product?

Again relying on statements by Brad Smith in Intuit’s 4th quarter financial report:

We are making important product changes to continue to delight our QuickBooks desktop customers, many of whom will be cloud customers in the future.”

Our goal is to attract them with a compelling online experience and incentives to move to the cloud. To that end, we are strengthening our desktop products beginning in 2015 by delivering ongoing releases to continuously improve the product experience, support operating system updates, and provide access to connected services.”

My interpretation of this (along with other statements made in their presentation) is:

  • QuickBooks Pro and Premier aren’t going away soon. There isn’t any indication of an “end of life plan” to entirely retire the products. Intuit still sells a lot of units of the desktop product, and they recognize that their existing desktop user base represents a significant source of income. A lot of those users aren’t ready for the cloud, and Intuit wants to hold on to them.
  • However, I expect most of the new product development to be focused on QuickBooks Online. That doesn’t mean that the desktop is frozen, but I wouldn’t be looking for many major new features in the desktop. In fact, if you look at the 2015 release you can see that a lot of the changes are smaller incremental changes, for the most part, improvements that users have been asking for.
  • Intuit is going to expose desktop users to more online services. One reason that people don’t want to leave the desktop (amongst several) is that they aren’t comfortable with online services, the “cloud”. Expect to see more features that connect to QuickBooks desktop products and that rely on the cloud, such as online payroll products and payment solutions (and probably others). Intuit will expose you to the cloud, get you comfortable with it, then convert you to QuickBooks Online at some later date.
  • Intuit is going to continue to improve QuickBooks Online to include features that desktop users want, such as (perhaps) increasing the job costing and inventory features, improving form customization, and other features. Some of this will be in-house development, some will be acquisitions of other companies, some will be opening things up to third party developers to fill gaps.

This is a shift in how Intuit is presenting things from what they were saying last Fall, in my opinion. Before, they mostly said that the cloud was the future, but that QuickBooks Online would never be as feature rich as QuickBooks Desktop. No real talk about advances in the desktop product. Now I’m hearing them make a stronger commitment to support QuickBooks desktop products and a realization that they do need to cover more and more of those desktop features that are missing from QuickBooks Online.

It all sounds good, but we’ll have to see the details of how this works out. Can they pull it off? Can they make hard core desktop users (and accounting professionals) become more comfortable with the cloud? Can they come up with an online product that can do what QuickBooks Pro and Premier does, at least for the most part?

But What About QuickBooks Enterprise Solutions?

Intuit tends to talk about “QuickBooks Online” vs. “QuickBooks Desktop”, but I think that there are actually three categories to consider – Online, Pro/Premier and Enterprise. Don’t lump Pro/Premier in with Enterprise when talking “desktop”. QuickBooks Enterprise Solutions is being treated differently than QuickBooks Pro and Premier. When Intuit talks about the target market for QuickBooks Online they are looking at the smaller businesses – those that are best served on the desktop by QuickBooks Pro and QuickBooks Premier. This is the area that the project the greatest growth in as a part of their research.

QuickBooks Enterprise Solutions serves a different market, and therefore should be treated differently. What will Intuit do with QuickBooks Enterprise? I talk about that in my next article.


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About the author

Charlie Russell

Charlie Russell has been involved with the small business software industry since the mid 70's, and remembers releasing his first commercial accounting software product when you had an 8-bit microcomputer with one 8 inch floppy disk drive. He has a special interest in inventory and manufacturing software for small businesses. Charlie is a Certified Advanced QuickBooks ProAdvisor with additional certifications for QuickBooks Online and QuickBooks Enterprise, as well as being a Xero Certified Partner. Charlie started blogging about QuickBooks in 2008 (Practical QuickBooks) and has been the managing editor and primary writer for the Accountex Report (formerly the Sleeter Report) since 2011. Charlie can be reached at [email protected]

Visit his CCRSoftware web site for information about his QuickBooks add-on products. He is also the author of the California Wildflower Hikes blog.

89 Comments

    • Thanks, Chris. Unfortunately, you have to be a subscriber to read that article, so I can’t comment on it.

      Intuit provided a ton of financial information in the two events, and I’ll admit that I’m not a great analyst of financial statements. When you say QBD is as profitable as QBO, make sure you are looking at just Pro/Premier and not rolling Enterprise into the mix, as that makes a big difference. Also, note that Intuit is changing how they report income for their products, and there are some funny aspects to some things (like products sold without subscription) during their transition.

  • Another insightful article Charlie. While I agree that right now there 3 categories, I don’t think that 7 years from now, the Pro/Premier desktop products will exist. Intuit will justify dropping the product because no one is buying it.

    But, as you have pointed out if you go to QuickBooks.com, you have to scroll past multiple pages of marketing of the QuickBooks Online offering. Unless you scroll down to the very bottom to see that small link that directs you to desktop product, you wouldn’t even know the desktop products exist anymore. People don’t buy stuff they don’t know exists or can’t find.

    When Intuit refers to the future commitment of QB desktop, there is no distinction between the products of which one(s) will remain. They just made Enterprise subscription. As we all know, Intuit wants that subscription revenue stream. Going forward, I think within 5-7 years, their commitment to desktop will mean QuickBooks Enterprise, meaning an announcement that Pro/Premier will be discontinued shortly thereafter. If you want desktop, it will be QBES, and of course in a subscription offering.

    • Jeff, we’ll have to see what things are like in seven years! I may not be in the business that long, though.

      I didn’t get into all aspects of their financial presentation. QB Online new subscriptions exceeded QB Desktop new purchased in the fourth quarter for the first time – but then, I think desktop sales decline in the quarter before the big fall release anyways? I haven’t looked at that in detail.

      We can get into all kinds of guesses as far as “there will always be a desktop”. Yes, it could just be Enterprise. Another way of looking at it is to look at the Mac product. We have a “QuickBooks Mac” product, wholly desktop, and we have a “QuickBooks App for Mac” product that is a desktop program (therefore supporting “there will always be a desktop”) that is a hybrid, accessing the QBO database. I suspect that is going to happen for Windows in the future as well.

      “There will always be a desktop” is the same as saying “There will always be a desktop AS WE KNOW IT NOW”. It is something I talked about last Fall with the “business operating system” concept they have.

      We’ll see!

    • I hate the Online version. Have two clients moving back to the desktop version. So, possibly in the future, I will be leaving QB all together if they no longer offer the desktop!

  • “According to Neil Williams, Intuit CFO, QuickBooks Online generates more that $800 in annual revenue per customer, while QuickBooks Desktop generates less than $500 per customer.”

    So, let me get this straight – QBO is NOT more expensive for the customer, so we’ve been told REPEATEDLY, yet Intuit makes more money? Exactly how is that possible? I’ll admit that advanced math has never been my strong suit, but I’m pretty sure that’s not advanced math.

    • Of course this is all about revenue for Intuit. 169 will buy a fully supported desktop version that will be good for 3 years. 30 dollars a month for QBO is 1080 for those same 36 months. Not sure of my pricing for the monthly fee but if I remember right from 2 clients that changed to it that’s what they paid before they changed right back to DT.

      • I’ll be doing some cost analyses in the future, but it is tough because there are so many variables. How many people run multiple companies on their one desktop product? There is no doubt that the “subscription” model is a boon for the software developers. We’ll see more of that coming.

    • Michele, that annual revenue figure isn’t talking just about the base cost of the product. My apologies for not making that clear. They are looking at all the purchases by the customer. That includes the base product and any add-on services they purchase, such as payroll, payment processing, supplies and so forth. They get more revenue from QBO customers when you consider the entire range of services/features.

    • I agree Michele. This really makes me sick. True to the point they are looking to make their stockholders happy. This is not a value based idea for the consumer. I have multiple clients which have multiple company files. Moving to QBO is not cost effective for them nor is it feature rich or efficient rich for them or me as I process their work. Sure Intuit will “sell” that they have many more add-ons and options for the user and that the cloud is where its at. Personally I think the cloud is a very useful tool but too much of it is being pushed as a fade, or all the cool kids are doing it. It is simply not as quick or robust as having the software locally on the machine you are working.

      Another problem I see is looking Adobe moving to this model. Adobe is all cloud now. So what about the freelancer doing work where they do not have internet access. How are they supposed to edit their work? Additionally with all their work in “the cloud” there don’t really have control of their work. Sure Adobe…”intuit” will say or have in the fine print agreement that your work/company file rights are yours, but what about the time you need your work and do not have internet access. Well you forgot to download your own files.

      Bottom line I don’t think Intuit or Adobe are serving the customer best value, their actions (like putting QBD at the bottom of their website) show they are more concerned for the money.

  • “What will Intuit do with QuickBooks Enterprise? I’ll talk about that in my next article.”

    Well, now I can’t wait for the next article! I’m waiting with bated breath.

  • Hi Charlie…

    Love your articles… thank you for the time you put into them.

    Interesting that you mention that Intuit is going to continue to expose desktop users to online services. That is the best strategy for Intuit to follow as it will not only increase their QBD users’ comfort-level with online solutions, but it will increase the likelihood that QBD users will move to QBO rather than Xero or some other online accounting solution (because most QBD online apps do or will integrate with QBO as well).

    BUT… as I believe you wrote about a few weeks ago, Intuit has announced that they are turning off the sync manager in 17 months or so… and are turning off new QBD subscribers to App Center apps in March 2015. This will limit rather than increase the exposure of QBD users to online services. I don’t understand the logic behind this… it doesn’t fit with Intuit’s wanting to expose QBD users to more online services. PLUS… it runs the risk of further alienating current QBD users who are beginning to feel abandoned and un-valued by Intuit.

    As much as Intuit wants QBD users to move to QBO ASAP, the reality is that it’s going to take time. Online accounting systems are in the nascent stages. They are buggy buggy buggy. (QBOA has an appalling bug where one company’s employees show up in an entirely different company… and this has not been fixed by Intuit even though they have known of the issue for many months) Online accounting systems lack features that are needed by many, many companies. It will take time for those features to become available and then to become reliable. In these early stages, apps that fill in the feature gaps will come and go. It’s early and it will take years before stable online feature parity with QBD is available. To the extent that Intuit nurtures their QBD customer base (e.g. continuing to provide opportunities for them to interface with online services, continuing to maintain QBD products, etc.) the more likely that that QBD customer base will move to Intuit’s online accounting solution. To the extent that Intuit takes the opposite approach, alienating their QBD customer base, the more likely that that customer base will look at all online accounting solutions when they do decide to move to the cloud, rather than simply sliding over into QBO.

    Thanks again for your articles.

    Steph

    • Very well put Steph. Intuit has a pattern of forcing users in and out of offerings as they see fit, whether stable, useful, or not, seemingly oblivious to (or in spite of) the alienation to of their customers. I wrote a while back that unless they become more responsive and considerate of their user base, and provide better quality control in their offerings, there’s going to be a significant migration away from their offerings. There’s a lot of other choices now, and people get tired of stuff that doesn’t work right, especially when it’s for business management and compliance.

    • Thank you, Steph. I’m talking about corporate direction in this article – the real question is (as I said) can they pull this off? Can they create a QBO product that people want to work with? There were a lot of things that they said in their financial presentations that I didn’t get into – such as the acceptance rate of NEW QBO customers is much higher than the acceptance rate oF converted QBDT users, or even users of the prior QBO product.

      Look at the video of Dan Wernikoff at the investor day presentation, he gives a short demo on something that relates to QBOA which I can’t talk about yet, due to NDA’s.

      As far as Sync Manager and App Center for QBDT – keep in mind that MOST of those apps are non-Intuit apps (a few are from Intuit, but not many). When I talk about Intuit’s plan to make people comfortable with cloud services I’m not talking about Sync Manager, which won’t make anyone comfortable with anything. I’m talking about Intuit’s own hooks, which they can provide without having to use Sync Manager. They already have multiple features that access the cloud in some way in QBDT that doesn’t use Sync Manager – heck, just look at the Update QuickBooks mechanism that grabs updates from the cloud for your desktop. Intuit is going to provide things like their own payment services, perhaps payroll, other things of this sort, that will be integrated closely and give a good experience to the user, but that have a web component of some sort.

    • I just learned yesterday that 2015 DT no longer supports automatically including a specific payment link to IPN with an invoice and you will no longer import the payments and fees directly into the file. 2015 will still process these payments created in a prior version however. In 2015 when you create invoices you have to manually include a link to an IPN site for the customer to pay. And when he pays at that site, you have to manually receive the payment and enter the fees.

      I cannot see any real reason why this change was made. The software still works because it will accept payments for invoices you created before you upgraded so why in the world limit the use of something that is still in the software. Unless there is some advantage I don’t see at the moment, this change would make me want to stick with 2014 for the next couple of years.

      Charlie, I may have missed it but I don’t remember seeing anything about this in your 2015 review articles.

  • Good article Charlie. Intuit’s QBO sales have increased b/c they make it hard to find the desktop options, as Jeff mentioned. Yet as one who works w/contractors and job costing, I don’t see QBO as a good fit for awhile. I suspect Intuit will phase out Pro/Premier sooner than we’d like. I’ve been wondering, as a trainer who’s focus is QB-centric, which direction my business will go. I have lots of contractors in Premier but how I would teach job costing in future QBO would be very different (I’m guessing), than Enterprise. Maybe I’ll retire before that happens LOL!

    • Not only make it hard, but QBO is all they advertise all over the place. I did laugh when they said that new QBO sales outstripped new desktop sales in the fourth quarter. Well, duh! If you don’t promote something, people won’t know to buy it.

      My suspicion is that certain features will be developed for QBO further. Brad Smith referred to job costing and inventory in his Q&A remarks in the quarterly report as examples. They will keep the desktop products around as long as they get sales of the desktop products, and until they get more features available in QBO.

  • Great article Charlie! The consensus of my clients is, they hate QuickBooks Online. I get that from CPA’s as well. QuickBooks Desktop still packs a punch. There is a lot desktop can do that the online cannot. The reporting features and work arounds in the desktop are far more superior to the online version. Personally I like my online clients because we can work on the file at the same time and I can answer their questions no matter where I am. That is very convenient but I think there will always be a need for the desktop version.

  • Online just doesn’t have the flexibility and ease of use that Desktop has. I tried using it for my personal books, and it was just too painful!

    They have a long long way to go before they convince me, and I have been using QuickBooks since it first came out. I’ve used and tried both, for my clients as well as myself, and am not comfortable with online — period!

  • Charlie – Great discussion especially with the news that Enterprise will be only sold on a subscription only basis. It seems like Intuit next move would be to sell the the Pro/Premier/Enterprise versions as hosted apps so they get users as close as possible to the cloud. The cheese is being moved.

    • Steve, if you look at the Enterprise pricing page you will see that Intuit offers hosting themselves (I believe the subcontract with Right Networks). I don’t expect Intuit to push Pro/Premier into their own hosting environment, as they really would rather that people move from those to QuickBooks Online.

  • With the new required annual subscription pricing of QuickBooks Enterprise, the cost of QBO with add-ons is becoming even more competitive. Just goes to show that Intuit will make changes quickly with no advance warning. I predict that Intuit will eventually have an “enterprise” level of QBO. Desktop is going away. It’s just a matter of time.

    • I am not convinced that they will have an Enterprise version of QBO myself, but you never can tell. They could acquire a company to fill that niche. Keep in mind that all of Intuit’s published research strongly suggests that the major growth in the future is in small businesses, smaller than what typically needs Enterprise. They are “laser focused” (Brad Smith’s phrase) on this market. “Enterprise” size companies may end up using QBO but they will be relying heavily on third party add-in products to expand things.

      • Charlie, good article — and your comment concerning Intuit’s “laser-focus” on small business may be more prescient than you know. Consider this: Microsoft is no stranger to leaving products and customers in the dust. (FrontPage, PhotoDraw, Microsoft Money, Microsoft Office Accounting, and the Expression Suite are just a few examples — not to mention their attempts at developing and selling consumer hardware.) HP and eBay have announced an intention to split up their companies in order to “focus” their attention (and announcements from other companies are speculated). Should we then doubt the possibility that Intuit might follow suit and either discontinue Enterprise (years from now, mind you) in favor of the growing small-business trend, or sell it to a third-party?

        • Keith, all I can say is that it isn’t in their current business plan to do that. We do know that Intuit drops products as well, but they don’t drop ones that are making a lot of money. In the future, if sales drop, that might be a different matter.

          • I agree, Charlie — but as you well know, business is business. If Intuit believes its best focus is on the growing micro- to small-business market, then other products may be affected. Referring to my earlier comments concerning product abandonment, I agree that such an event is not likely — but there is absolutely no reason in my opinion to believe an eventual spinoff or sale of the Enterprise product might not occur.

          • There are a lot of clues laying around, Keith – but there are some that support both sides of the argument. Best we can say is that we don’t know what Intuit will do down the line. I can report on what they are saying NOW, but they can very easily change direction (and they have, many times). A spin off could occur, but I don’t see that happening in the very near term. Down the road, who knows?

  • I appreciate your effort to read between the lines, but I think Intuit has given us a few more clues to ponder.

    The recent interface design appears to be something like HTML5 based. Maybe not exactly, but I think they’re re-jiggering the desktop interface now to not only resemble a web interface, but to be functionally compatible with a web views inserted into the desktop.

    For example, in the future, it may be that our customer lists are hosted online and when we view the list inside the desktop application, we are essentially viewing a webpage. Eventually, the most of the desktop application could become little more than a shell for browser-like views of cloud data.

    That’s a possibility. But a less radical approach would be simply to ease the desktop users towards a web-like interface appearance. As noted, Intuit will offer “incentives” to switch the acclimated user base to online.

    But, if you’ve been watching Intuit, there is another alternative I would put money on: Intuit will greatly increase the price of the desktop applications. They will make more money from people who need the features their programmers haven’t the muster to put online (it’s worth noting that after all these years and the fall and resurrection of Apple, the Mac version STILL is not on par with Windows. Will online fare better? Brett Barry – you are an optimist if you believe they will successfully port QB Enterprise to QBO before 2037)

    Intuit loves the idea of premium and specialized versions, even if they’re little more than pre-configured existing versions.
    The Desktop will become another specialized premium version.

    • Max, I don’t think that Brett is suggesting that there will be a “port” of Enterprise to the cloud – just that QBO will be expanded to add “enterprise-level” capabilities. Although I can’t speak for Brett.

      One thing that I didn’t make clear in this article is that I’m mostly talking about my impressions after the quarter end and investor day presentations from Intuit. I’ve been speculating about their directions for some time, in various articles. One example is https://www.sleeter.com/blog/2013/10/intuit-business-operating-system/, another is https://www.sleeter.com/blog/2013/11/intuit-and-the-future-of-quickbooks/. Another to look at is https://www.sleeter.com/blog/2014/06/quickbooks-app-for-mac/

      The Mac article shows an interesting direction that I’ve talked about in the other articles, something along the lines of what you allude to. “Hybrid” programs. Look at the Mac – we have “QuickBooks for Mac”, a desktop application. We now also have “QuickBooks App for Mac”, which is a desktop Mac application, BUT it accesses the QuickBooks Online database. I’ve been predicting that they will do the same for Windows, creating a native Windows desktop app that will use the QBO database instead of the local database.

  • Great article Russell!
    It’s true that QuickBooks Pro, Premier, Enterprise and others, have their different market. As Gartner predicted that by 2017, over 50% of large SaaS application providers(such as Intuit) will offer matching business process services and an integrated PaaS. It seems that Intuit is going on the same path and focusing more on QuickBooks online.

    Russell, I want to ask one thing, If Intuit wants that pro and premier users move to QB online then what will be the sense of their hosting program?

    • Kundan, I personally think that “QuickBooks Hosting” services (in general) are a stopgap measure, something that won’t exist in the long term. My apologies to you as I know that you work for a cloud hosting service. It is a way to bring desktop functionality to users who need the advantages of web access, and it works well for some business situations. However, at some point, the real “online” experience should provide the features that we want from the desktop without the extra work that hosting involves, and I believe that “QuickBooks Hosting” will be only used for the Enterprise product (and, Intuit’s own hosting service is focused on Enterprise at this time, I believe).

      That isn’t to say that “cloud hosting” will go away or be devalued – there are lots of reasons to use that other than to host QuickBooks specifically.

  • Michele, the biggest factor why Intuit says the cost of QBO is not more expensive than Desktop for the customer is that such a large percentage of QBO subscriptions are sold with multi-user capabilities built in to those subscriptions. (Essentials 3 users and Plus 5 users) Whereas most desktop products are sold with single user licenses. Therefore the cost per user in QBO when compared to the cost per user in Desktop can be the same.

    • Charlie, you QB tool, this next Enterprise article is the biggest cliffhanger since “Who Shot JR?” which was in 1978 on CBS.

  • It is going to be interesting to see how the market reacts to the annual sunsetting of Pro and Premier versions. If the sunsetting continues then businesses will be forced to upgrade to a current product that may have no more functionality than what the businesses are currently using just so that the businesses can continue to use bank integration, payroll and the various flavors of merchant services.

    Intuit is reminding me a lot of Microsoft. Microsoft squandered their market dominance in operating systems and office products. They did this by upsetting their customers and, thus, opening the door for their competitors. I see Intuit doing the same thing right now. I really wonder who will be the “Apple” of the Small and Medium Business accounting software and tax products markets.

      • Charlie, if I may be so bold as to interpret Will’s comment, I believe he was referring to the eventual effect of the “current plus two” sunsetting policy. Because one version of QB rolls off each year, sunsetted users will have to upgrade to have a supported version.

        To some extent, Will’s other comments echo some of my thoughts on my earlier post. Intuit certainly doesn’t need my advice on how to make money, but it seems to me the company has strayed somewhat from one of its greatest core strengths — listening to customers and meeting their needs.

        To Will’s point, Intuit’s last few years have seemed to follow the Steve Ballmer Microsoft model of foisting buggy products and changes on users, allowing them to pay full price for the privilege of being unwilling beta testers. Your article mentioned that Intuit has a duty to its shareholders. That is true, but I believe it can best meet that duty by meeting its obligation to its customers. Without customers, there will be no shareholders (Dell exemplifies this truism).

        [Lest my comments mislead, I am a Certified QB ProAdvisor, I like Intuit, and I use QB in my own business. I hope that Intuit learns from Microsoft’s missteps and avoids the pains they have recently experienced.]

  • It might make sense for them to move from their Sunsetting policy to something more like Adobe has for their “Creative Cloud.”
    Desktop applications with subscriptions. The only problem is, Adobe’s customers tend to get excited about frequent updates, and I think most QB users cringe a little.

  • This has been an ongoing request over the last several years when beta testing:

    Why the feature has not been implemented or responded by the development team is beyond me… So here it goes again:

    I make a purchase, pay by debit/credit or electronic funds transfer

    I need to enter the transaction into the check register

    In the field for check number I change from the check number to “debit card”

    Why doesn’t QB create a list of payment options within the checkbook register is unbelievable in these days of going PAPERLESS!

    Even in the Pay Bills Window, the option to assign “my own check number” exists, so again, the user can write “debit card”, “electronic transfer”, etc, but these method of payments cannot be memorized so the redundancy of always having to indicate how the bill is paid is archaic! Anyone on the development team reading these posts, kindly pay attention.

    Thank You!

      • Hi Brett,
        I am using QB for Mac on a local Machine. Installed, after beta testing QBM 2015… I haven’t tried the online version. Are you stating that as names such as Debit Card, AFT, etc are saved and then when revisiting the payment to a vendor, autofill will go into effect?

  • The ideal solution for us is hosting the desktop version in the cloud–we get all the features we want with the access benefits of the cloud at a reasonable cost. As a result, we have no interest in QBO. If the desktop versions start getting neglected by Intuit, I can see us moving away from Intuit to another solution that offers a product that is more accountant centric, rather than client centric.

    Thanks, Charlie for good info (as always!).

  • I think all the comments on this post show an angst about the thought of losing QBD.
    I myself used Xero for one client and currently use QBO for my own practice but have moved all my clients back to QBD. There are a few reasons for that:
    1. Cost. While it’s good for Intuit to collect ongoing revenue from every one of their customers, it’s not good for my firm, and while they have a responsibility to their shareholders, I have a responsibility to myself, my only shareholder.

    2. Speed/ease of use. The process of importing transactions from the bank is much slower on QBO, but even worse is when you want to change multiple transactions – in desktop I can run a report then, using keyboard shortcuts, I can edit close to 40 transactions in a minute; that’s impossible in QBO. In fact I use keyboard shortcuts so much in QBD that the dearth of them in QBO is almost enough of a reason not to go with it.

  • Great article, with brilliant insight. I enjoyed reading it as well as all of the comments that followed. It seems to me that as usual, Intuit is alienating one of its customer bases: the ProAdvisor. I will never recommend QBO to any prospective or existing client. I will always choose QBD because it is simply a better, more user-friendly product. I too host all my clients’ QB files in the cloud which gives everyone who needs it instant access. Intuit failed miserably to compete with and take Xero seriously and now it’s trying to catch up at the expense of me the ProAdvisor. Disappointing, but not unprecedented. I have invested significant time and resources to become an expert in QBD and will not be easily seduced by the not-quite-ready-for-prime-time QBO. Intuit has always had sort of a “ready, fire, aim” mentality. It’s amazing they got to where they are today. I’ve been using QBD since 1992, so I know whereof I speak. Keep writing about this Charlie. I will ever be engaged with your opinions and analysis of the QBD v. QBO melee.

  • I understand the market strategy of moving to online and yes, I believe it is the future as well. We have moved many of our clients to cloud services because of this trend and the great convenience. However, I consider to believe that Intuit is being short-sighted, thinking of their own economics and not their customers. Their customers, 95% of 99.5% of all the businesses in the U.S. are small business owners who know little about accounting, not much about QuickBooks, and are not all that great at IT either. I know because I am in their offices, teaching them accounting and QuickBooks everyday and have been for 20 years.

    QuickBooks desktop products are the greatest accounting products ever!!! Why? Easy to learn, easy to use, inexpensive. No other competitor has come close to producing as good a product and aren’t likely too if Intuit continues down that path. QuickBooks Online loses out to the desktop products on each of these 3 features. It is not easy to learn for small business owners. It is not the least bit intuitive. It is cumbersome and takes a skilled ProAdvisor 30% longer to do their work per my tests. That costs the customer more money to. Since the product is not good, it opens up all sorts of possibilities for competitors to gain market share, and I’m sure they won’t waste any time doing so since this is such a huge market.

    Intuit already has everything it needs to continue to be the leader in the marketplace. Great software, the ability and money to develop the web-based platform. PUT THE DESKTOP VERSION IN THE CLOUD! Don’t replace a great product with an inferior one and expect to win!

  • Every colleague I’ve talked to much prefers the desktop edition and with desktop hosting services like Swizznet, you can use the desktop version online and even use the PC version from a Mac.

    • People who are used to the desktop product will always love the desktop product. What is interesting is to look at people who have NOT used the desktop product and see what they think of the online product. Acceptance rates are much higher there.

      • This is dead on. The only way to forecast what Intuit will do is focus on their cash flow. If they have a high acceptance rate for new users, they know from experience that they can pressure their existing users to follow the new path. What are we going to do? Go to Sage/Peachtree for desktop?

        We do have one thing in our favor: There is more competition for the small business online market. QB has to up their game.
        Stuff like Xero looks more modern, simpler and approachable than QBO. Maybe it doesn’t have the features yet, but it can appeal to new users who don’t know what they’re going to need. There is no real desktop competition, so that might help keep Intuit’s eye on that market a little longer.

        I am baffled about QB Enterprise. I’ve never used it, but don’t you guys have better alternatives? There are so many mid-sized business accounting platforms (that don’t corrupt your data! That have professional reporting systems!)

  • While I understand the revenue generator that QBO produces over the desktop version (and I don’t blame Intuit for a little bit of capitalism), what I have always been curious about is why they reinvented the wheel when it comes to QuickBooks. The desktop version is very solid and has lots of features. Why did they not just put it online like many others do and sell a subscription model for that? I’ve talked with those higher up at Intuit and they said that the technology is just different for online. Again, never understood that statement since many companies do it all day long. And to pay MORE for a product that does LESS? It’s hard to sell new clients on it let alone my existing clients.

    • Kendall,

      The programming code for a web-based application is different than a program developed for Windows, hence the reason why QuickBooks for Mac is not the same as QuickBooks for Windows. Being web-based means that QBO is available to anyone, regardless of operating system.

    • Kendall, the underlying technology in QuickBooks is heavily based on some technologies that don’t work in the cloud for many reasons. They have a lot of “old stuff” there that is actually surprising that Microsoft Windows still supports.

      I used to own a software company that was faced with environment shifts. We went from CP/M (an old 8-bit operating system) to DOS, and looked at moving from DOS to Windows. Transferring code written (and heavily dependent on) older operating environments yields a product that is clunky, hard to maintain, doesn’t take advantage of new technologies. It makes better sense to take the CONCEPTS you have built (and the lessons you have learned) and start over. You have a better product, one that is easier to build upon. Intuit is faced with the same thing – I would never recommend that they try to move the desktop product into the cloud.

      Just my opinion.

  • Charlie,
    Thanks for the article. As one that still uses the desktop version It is always good to hear updates as you can obviously see Intuit pushing the transition to the online version.

    Most of my clients are retail businesses that currently use Quickbooks POS to run their small stores. As of a month ago or so (last time I checked) QBO does not support integration with POS. In fact, it is very hard to find POS anywhere in Intuits websites.

    I guess I have two questions. First, is there a plan to kill POS or spin it off and secondly is there any plans to integrate POS to QBO. I know if they would do that pretty much all my clients would switch to online immediately.

    Thanks

  • Brett, I do understand the programming is different – I’m just wondering WHY they felt the need to redo something that is nowhere close to what QB Desktop can do. For instance, I remember about two years ago there was a “BIG” announcement at the Sleeter Group conference by Intuit that told everyone QBO could now do sales tax in multiple districts – what??? Seriously??? The desktop version has been doing that for 15 years or more. I think the expectation, at least from me, has always been when something new is released that it is better than its predecessor. QBO compared to desktop is completely inferior. The line from Intuit is “Well, it’s going to get better over time.” Again, what????? You release a product to the public that you KNOW to be inferior to a product that is already available? But, I guess it’s working for them since they appear to be making money – never underestimate the foolishness of the general public. In my experience, if you put a new client on QBO, they will think it works since they have no other frame of reference. If you convert an existing desktop client to QBO – get ready for the lynch mob to come to your door.

    • I am no fan of QB Online, and worry about Intuit going online only at their first opportunity. If you’re wondering why Intuit made a decision that serves their customers less well… I think it’s like the bumper sticker says: “If You’re Not Angry, You’re Not Paying Attention.”

      Intuit has a long tradition now of focusing on two things: User Interface Design (which I think they do well, though they are very poor at implementation of the design – and programming in general), and Wall Street Numbers. Even if Desktop is outperforming QBO now, Intuit has a dream! Lower costs, higher Revenue = Bigger Net!

      So don’t look for a logical existing customer explanation for “Why QBO.” They’re not comparing QBO to Desktop. And they’re not building it for their existing base. If they are comparing it to anything, they are worried about Xero and other online competitors. There is a generation of new Small Biz owners who have never owned a desktop computer and feel more comfortable online than with their own personally installed software.

      SO Intuit will keep working on QBO and keep dreaming of that higher Net. And if no great competitor emerges, we’ll just be left talking about the “good old days” when running rebuild yet again was our worst problem (wasn’t that supposed to be fixed in 2005?)

  • Great article and lively comments! Charlie, I agree with you that the QuickBooks desktop (QBD) version is more comprehensive than the QuickBooks Online (QBO) version. In the past, I had used QBO with some of my out-of-state clients and we dropped it and returned to QBD. Since that time, we use QBD hosted in the cloud with one of Intuit’s authorized partners. This works best for us. Is there any chance Intuit will offer future versions of QBD in the cloud? That is, hosted by Intuit?

    • Larry, Intuit does have a hosting plan of their own, for Enterprise. However, that is essentially a private label of Right Networks. There are a number of excellent authorized cloud hosts, you don’t need Intuit to be the provider.

  • Charlie, and everyone else, I do get the fact that you can’t just stick it in the cloud. But again people are hosting QuickBooks all over with excellent results. I don’t understand why Intuit didn’t just start their own hosting business so now you get the best of both worlds – online access and a butt-kicking piece of accounting software that already works and doesn’t have to be rewritten.

    • Kendall, I understand your point — but do you remember Charlie stating in a previous reply, “They have a lot of “old stuff” there that is actually surprising that Microsoft Windows still supports…”?

      As Microsoft ceases to support legacy software, any product based on that legacy software will collapse. I agree with you that one would logically expect the newer, online product to have at least the same capability as the older, desktop product (if not more), but trying to deliver such results would delay distribution. That delays potential revenues.

      Competition is an additional factor. Every moment distribution is delayed is a moment captured by competitors. Intuit can compete as long as QBO features are roughly equal to or better than the products of the competition. As competitors add features to their products, so too will Intuit add features to QBO — and thus competition (and not logic) will drive innovation.

  • Keith, it just amazes me that a company like Intuit would produce a product that is unarguably inferior to the product they already have. I simply can’t believe that they don’t have the talent to be able to reproduce a QuickBooks desktop product in the cloud. Would they have to rewrite it? Well, certainly. But I’m pretty sure it can be done.
    But once again I must re-iterate, why are they re-writing it in the first place? QuickBooks 2015 is not a legacy product and neither is Windows 8. If the software runs just fine on that platform, why not figure out a way to share an already working product in the cloud. Imagine the money they could have saved by not trying to reinvent QuickBooks all over again but spending resources on creating an infrastructure that would host QuickBooks desktop online. I know other companies do it but, IMHO, it’s a pain to set up and to use.

    • QuickBooks 2015 is almost the perfect example of a legacy product. Using technologies that are poorly supported, that have been around for decades, that nobody uses any more, that are limping along on their last gasp. And the product is a big pile of spaghetti code that is so hard to maintain that when they make even a small change in one place it creates a cascading series of problems in other places.

      I lived in that kind of environment for a number of years…

  • QuickBooks (Intuit) should analyze where their current growth has come from, mainly CPA’s and other preparers that are the QuickBooks Pro Advisors. I hate the online version, nor do I trust Intuit with my client’s data. It gives Intuit the ability to data mine millions of businesses, and I think they are just licking their chops to get at this. Plus, can Intuit assure me that they can absolutely assure me and other customers that my client’s data is absolutely secure? Nothing on the internet is absolutely secure. Are they willing to pay the price if they allow the data to be hacked? If they discontinue the desktop,I will take my 50+ companies and go somewhere else. There is a real business opportunity here for a person younger than myself to develop a good desktop product with a conversion feature for QB data. With the way they are currently pricing payroll,it can’t happen too soon for me.

    • Don, I doubt that anyone is going to develop a new desktop accounting product at this stage of the game. Existing alternatives are there, like Sage, but they haven’t taken off like QuickBooks.

      I’m not as worried about my company data in Intuit’s cloud as I am about my banking information and credit card information at major retailers. And I don’t think that most people’s desktop data is as secure as they think it is. However, I understand what you are saying (and I’ll note that I use the desktop product for my financial information).

  • Each day at LedgerSync we talk to quite a few accountants. There seems to be a real disconnect brewing between what the industry wants small businesses to do, and what accountants (and I mean those doing write-up and after the fact bookkeeping) want to do.

    The talk I have with most accountants about QBO, XERO, etc. is the cost. I don’t think that gets enough play when we talk about what accountants want.

    I totally get that a small business doing their own work may benefit from an online software, pay for it themselves, and move on. But if you have a firm working for 200 write-up clients are you really going to pay Intuit $5,000/mo or more to have them all on QBO or Xero?

    There is a real opportunity here to segregate what is appropriate for the business owner and what works for the accountant, and I bet something that specifically gets at the heart of what accountants want in their practice finds some traction soon.

    • Chris, we believe that the future for accounting professionals is to NOT do the data entry work, but to become the trusted advisor. Data entry work will become highly automated. So the days of a firm having all the QB company files in house themselves may be numbered.

      However, for firms that still do that, the desktop still works economically. And as I have reported, Intuit says that “there will always be a desktop”.

      • Charlie,

        Let me ask you this: Who is the “we” in “We believe the future for accounting professionals is to not do the data entry work?” Sleeter you mean?

        Besides owning LedgerSync I run a firm with 500 business clients, 200 of them on full time Write-up. I can tell you, not because I believe, but because I am in the trenches with the client, those 200 clients will NEVER want to do their own work and will always have someone else do it.

        For every technology savy young client we have, there are 3 clients in carpet cleaning, or construction, or doctors, etc. that want nothing to do with it. If I were shrinking my write up practice I might tend to agree, but we are not, nor have we ever had a year where we did not grow.

        Even the young clients have us do this work for them, of course the world has do it yourselfers, I cant imagine paying someone to fix my computer because I am tech savy, but I am the minority in that too.

        LedgerSync is in the business of automating that data entry, so I get that. But not at the expense of the accountant making money. There needs to be an affordable solution for the accountant doing write up, I dont believe that service is going anywhere… Something like QBO for accountants that is like 5.00 a month. Doesnt have all the bells and whistles, but lets me make financial statements and get on with it..

        Charlie I read your blog alot and it is not your job to have people like me ping you back where you have to respond, I appreciate all that you do here and I am a better CPA for it. But, I believe we are trying to move this whole ecosystem online for the benefit of the client that does all the work themselves and the software company, not necessarily for the accountant.. That leaves a hole for some software to fill and we may take a shot at it if things dont change….

        • Yes, Chris, “we” is The Sleeter Group. I don’t use the “royal we” to refer to myself.

          Don’t apologize for responding or engaging in a dialog in these articles, I think that comments are just as valuable as the articles themselves. Perhaps more valuable.

          I’m not advocating that everyone go online. However, I think that there are big benefits of online products in the right situations. One of them is that online systems are much easier to automate, and that automation is going to handle a lot of the traditional data entry chores. We are heading towards a time when accounting professionals will be focusing on the “advisor”, “compliance” and “business analysis” aspects of the business, and less so on the data entry portion of it.

          When the online systems are more developed than they are today then the cost/benefit ratio will improve. You are correct, in the type of situation that you describe the costs today are significant. I think that looking forward, that is going to change.

          • I respect your opinion Charlie, and thanks again for creating a forum for all of this debate, it is helpful.

            I feel like your opinion is different from the software vendors themselves, you said “big benefits of online products in the right situations”, that is very different than what I hear the big guys say which is: “Get your clients online or you will miss the boat”.

            I never really see them check down the situations as good for some, not for others. That is at the heart of my argument. If we heard anyone say: “The accountant needs to decide if this is the right solution for their practice” than I would tend to lay off it.

            But the reality is, we are being told to get off the dock or we will be left behind. They have software to sell so I get it, but the thought leaders of the industry, like yourself, seem to have a more measured approach to it.

            Again, I appreciate the responses. All the best…

          • Actually, if you listen to what Intuit is saying in some forums, the message is a bit different. In their annual “investor’s day” talk on their year end results, as well as in some other forums, they have said that only 30% of the current QuickBooks Desktop customers are suitable for moving to QuickBooks Online. That is a bit of a shift from what they have said in the recent past.

            They are very convinced that the future is online/mobile, but they do recognize that a number of people aren’t suitable for their current product. And, this is a message that I’ve been saying personally for some time now – you have to understand all the products (and not just the Intuit products) so that you can advise your client as to what the best fit is for their situation.

            But I believe that most of the solutions will be online in the relatively near future. That doesn’t say that this is the best way, I just believe that this is the way the software marketplace is going. Lots of good things for online systems, but they do need to grow a lot more before they can cover all businesses (in my opinion).

            I’ll probably be writing about that in the near future.

  • Even small business owners can add. Most of us – if we’re sane – update QB desktop in the maximum 3 year cycle. Or never – if online banking/payroll etc services aren’t needed. Having to pay monthly simply adds up to more $ for an inferior product. Intuit is looking through us towards new customers who don’t compare to their past business model. New accountants too.

  • Great article, Charlie, and wonderful feedback. Almost everyone expressed the same disappointment I have felt with Intuit practically forcing QBO down our throats the past few years. I have been using QBDT since 1993 when I started my business (anyone remember when invoicing and payroll were separate add-on programs?)

    Over the years, I have been able to get almost all my clients on the same version. Every three years, everyone upgrades. Paying a monthly subscription over over the same period of time just doesn’t make financial sense for them. I am even in the reseller program. Over the past seven years, I have made a whopping $4.32 because I tell people they can get the software cheaper through Amazon.com or Tech Soup if they are non-profits than they can from me.

    Thank you everyone for letting me know that I am not alone in the way I have been feeling towards Intuit.

  • Some software is too customized for a could solution, they will stand to make more on a cloud solution, but users still want that customization, but some day it will get there with the cloud being the go to data store.

  • We have been thinking about this subject for some time. We have Quickbooks Pro 2014 but don’t use it, we looked at moving to Quickbooks Online but didn’t like the fact that you can’t customise the invoices much. It’s a shame because the rest of the Quickbooks Online offering looked like an excellent, well thought out system. Clearbooks is another system we tried and that allows for full customisation of EVERY aspect of invoices, much in the same was as Quickbooks Desktop, but Quickbooks Online seriously needs to catch up.

  • This push for online has been really annoying. I have been a proadvisor for years and the desktop version far out ways the online versions. You lose so much control online. Once you go online you cant convert your data back to desktop. Its a money issue for Intuit. I feel they used to partner more with accountants and now are trying to take more of the share of business for themselves. You still can have the same benefits working outside the office. You just remote into your computer and do what you need to do from anywhere you have internet access. Intuit needs to back off and quit pushing so hard. Accountants and Customers know what they want and need they don’t need expensive technology shoved down their throat.

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