QuickBooks rolls out Self Employed cloud app
US accounting software giant Intuit has released an online version of QuickBooks tailored for the self-employed.
On first sight, QuickBooks Self Employed (QBSE) looks and works in a similar fashion to QuickBooks Online (QBO), but is a separate tool currently offered at an introductory price of £4.80 a month (down from £6).
The target market is among people moving into the “shared economy” where they may do part time work alongside their full-time job - for example as Uber or Deliveroo drivers. The company estimated there are 50m self-employed people in the US and 5m in the UK. Similar employment patterns are also developing in other territories including India and Australia.
“Uber launched in the UK two years ago and now have 20,000 drivers in London - almost as many as black cabs. That’s an amazing shift in employment. We’re talking about hundreds of thousands of customers [for QBSE] over time,” said Intuit senior vice president Dan Wernikoff.
The functionality of the new program is blindingly simple. Once signed up, the user can connect to nine UK banks including Lloyds, RBS, Metro, HSBC, Santander, Barclays and TSB. PayPal transactions can also be imported. While the banks limit access to transactions during the past 90 days, earlier periods can be reconstructed by downloading the data as a CSV file and importing it.
Based on what it recognised as one of the fundamental problems facing the self employed, the program requires the user to mark each transaction as either business or personal. As patterns emerge in the data, the program will automatically categorises transactions that it recognises. But for UK users there does not appear to be any mechanism to support the flat rate expenses regime.
QuickBooks Self Employed is not equipped to raise and settle invoices, nor does it provide any facilities for traders who opt to register for VAT.
What the user can do is enter and classify transactions in bulk from the bank or as they occur, and then view and download a tax summary that shows income and expenses (with the relevant SA100 boxes indicated) and a basic calculation for tax owed. The only other report currently available is a more detailed spreadsheet summary showing the expense totals by category.
Intuit Europe managing director Rich Preece said that the reception in the UK for QB Self Employed has been very positive during its first seven weeks. “The self employed often have no idea how much tax they owe. QuickBooks Self Employed separates your clients’ business finance from personal and keeps track of what they have to put aside.”
In spite of the product’s tax reporting, Preece emphasised that QBSE was not designed as an attempt to channel self employed clients away from accountants. The developers had made a deliberate decision not to include invoicing, tax filing and other features found in small business cloud accounting systems.
“We’re drawing a line,” said Preece. “If you invoice you’re probably not in the shared economy market that we’re targeting. Deliveroo, Etsy and Uber people don’t invoice. We think there’s been a shift. In the shared economy they don’t need bells and whistles, so we’ve tailored something different.”
Another reason for holding back from tax filing and other enhancements was that Intuit did not want to compete with accountants. “We could go ahead, but at the heart as a company we believe that small businesses are more successful when they work with accountants,” Preece said.
QBSE would give firms a tool to retain and serve this new group of clients. Although it is separate from QBO, the plan is to build QBSE into the QuickBooks Online Accountant dashboard and wholesale billing mechanisms.
In the UK, QBSE presents a direct challenge to FreeAgent in particular, which has made the freelance market its own in recent years, but also local cloud accounting programs such as Clear Books and KashFlow, which also have a presence in the microbusiness and sole trader markets.
FreeAgent founder and CEO Ed Molyneux commented, “It’s great for users that legacy providers are actually starting to think about what real customers want.
“It's a market we've strongly believed in since we started and it’s always been disappointing that legacy providers like Sage, Intuit and IRIS try to serve it with ‘cashbook’ versions - removing all the useful features that clients might benefit from.
“I’m not sure what happens when the sole trader becomes a bit more successful. According to the QBSE feature matrix they’d need to upgrade to QB Online to access accounts on a smartphone, send invoices, file VAT or actually see how the business is doing. And if they do they lose the tax forecasting functionality.”
Clear Books founder Tim Fouracre was not overly concerned about the arrival of QuickBooks Self Employed. “From my perspective small business customers want to issue invoices and get paid, and to get the bank data and do their bookkeeping work quickly. Will people be happy with a product that doesn’t go to that level?” he asked.
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