- 01:20 – Meet Ted!
- 02:59 – Ted talks about Intuit's impetus behind moving into the service game
- 03:28 – Confidence is key! Most of the small businesses without an accountant or bookkeeper lack the confidence to reach out for help
- 04:42 – While QuickBooks Live and TurboTax Live share similar tech, their services are very different
- 06:04 – QuickBooks Live is only available, currently, in the U.S., and all Live bookkeepers reside in the U.S.
- 07:03 – Ted shares some of the requirements for becoming a QuickBooks Live bookkeeper
- 08:01 – The gentleman talk QBO Accountants Edition, and some of the new feature roll-outs, such as the Optimization Center
- 09:42 – Intuit sees a huge opportunity to capture those small businesses that are, so far, sans accountant
- 11:11 – What's the real scope of the QuickBooks Live offering?
- 13:42 – What differentiates the different price points in QuickBooks Live?
- 14:38 – Intuit is solving for both sides of the market - small biz and accounting professional
- 15:38 – A bit of discussion on the different ProAdvisor buckets and how QuickBooks Live will affect them
- 16:39 – What do you tell a ProAdvisor who loses a client to QuickBooks Live?
- 17:46 – Take a load off, Annie - QuickBooks Live plays a key role in the advisory vision - by transferring lesser-value work to QB Live, so accountants and bookkeepers can focus on advising and other value-add services
- 18:28 – Intuit needs to establish clear guidelines around relationships to solve for the needs of the customers and accounting partners
- 19:43 – Is there a grand convergence of all the Intuit offerings on the horizon?
- 20:29 – Who's in charge of ensuring the delivery QuickBooks Live services meet's Intuit's WOW factor?
- 21:49 – What's next on the agenda, for Ted, and QuickBooks Live?
Connect with Ted
- Ted Callahan, Director, QuickBooks Live Offering, Intuit
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This episode of The Cloud Accounting Podcast is sponsored by Intuit QuickBooks. Accounting professionals and bookkeepers have long been at the forefront of using cutting-edge technologies to take the profession to the next level and to ensure they're delivering the best possible service to their clients. Whether you want to grow your firm or sharpen your skills, Intuit QuickBooks provides you with the AI-driven products, services, and the resources that you need to help all sides of your career take shape. To learn more about how QuickBooks Online, QuickBooks Online Accountant, QuickBooks Live Bookkeeping, and the ProAdvisor program can help you grow your practice and scale your impact, head over to CloudAccountingPodcast.promo/quickbooks. That is Cloud Accounting Podcast dot promo forward slash Q-U-I-C-K-B-O-O-K-S. QuickBooks - Backing you.
Ted Callahan: You want to have a person who really knows your business helping you do that, so you need to build a durable connection. Blake Oliver: Welcome to The Cloud Accounting Podcast. I'm Blake Oliver. David Leary: I'm David Leary. Ted Callahan: I'm Ted Callahan, the Director of the QuickBooks [00:01:00] Live Offering. David Leary: Ted, thanks for joining us. We're here at the last day of QuickBooks- not the last day, the end of the first day of QuickBooks Connect. It's getting a little late. Blake Oliver: We're gonna get this right at some point, right? David Leary: Yes, yes, yes, we will. By day three I will ... It's day one, and we're meeting you for the first time, and I think most of our listeners are meeting you for the first time. What's your background? How'd you get here? Ted Callahan: Sure. Yeah. I've been at Intuit a little over two-and-a-half years, joined their Self-Employed team. I know you guys have talked with the QuickBooks Self-Employed crew in [00:01:30] the past. I had a unique role where I was actually building a bridge across two different business units so that we could really have the TurboTax Self-Employed offering and the QuickBooks Self-Employed offering work together and build a flywheel from that accounting product into the tax product. David Leary: Interesting. Ted Callahan: Mm-hmm. David Leary: Good. Then you came over to the small business side, and it's all QuickBooks Live now? Ted Callahan: Yep, joined the QuickBooks Live team in May. David Leary: Got it- Blake Oliver: I think the last time we talked about QuickBooks Live on the show, it was still in a development phase- Ted Callahan: That's right. Blake Oliver: -it was not [00:02:00] live yet. Since then, it has expanded beyond the Boise office. I think, what, it was 10 bookkeepers to start - very trial phase? Ted Callahan: Right. We had a Boise bookkeeping lab, and we still do. We had a crew of bookkeepers there so that we could test and iterate really quickly, figuring out how exactly does this all work? Because, obviously, Intuit's traditionally been a software company, not a services company, and you've gotta really learn your way, end to end, how to operate that as a true business. [00:02:30] David Leary: Could we pause on that? Ted Callahan: Mm-hmm. David Leary: We were walking last night after dinner, and we were thinking about software companies getting into the service game, and it's hard, right? Then, also, just we started talking about margins. Traditionally, software companies are running 80-, 90-percent margins, and the WeWorks now, and you look at Ubers and Lyfts, these software companies, tech companies are trying to do the human element; their margins, they're running at 40-percent margins. Why would Intuit even do this, at some level, right? Ted Callahan: Yeah, it's [00:03:00] a great question. I had the same question when they came to me with the opportunity, to be candid. I think, fundamentally, it comes back to the process that we used to really understand what are the needs of our customers? When we talked to our small business customers, 60 percent are already connected to an accountant. I know Rich covered that when he was with you guys back in June. There's a whole other set, then, 40 percent - tough math - that aren't connected. When we talked to them, and we found out, "What are your biggest problems?" It came down to they didn't have confidence [00:03:30] that they were keeping their books correctly, and they also weren't spending the time to maintain those books. It was a compounding problem - because they didn't have the confidence, they wouldn't dedicate the time, and you can see that just getting worse and worse. Literally, when we're looking at some of these small business's books, they'll have over 800 unreconciled transactions. They'll have hundreds of duplicate transactions because they've implemented a third-party app incorrectly. They were really eager for us to help them solve those problems, but they didn't feel like they were ready to go [00:04:00] to the ProAdvisor Network and get the kind of help that we already offer through that platform today. David Leary: I could see how that's intimidating. If you haven't reconciled ever, and you're like, 'Oh, my God. This guy's just ..." Blake Oliver: Maybe you've never had an accountant or a bookkeeper before, in your life, right? Ted Callahan: Right. Blake Oliver: That's where QuickBooks Online is different in that- or QuickBooks Online- QBO Live is different in that you can engage with a bookkeeper directly through the app, right? Ted Callahan: Exactly. Blake Oliver: It's video conferencing inside of QuickBooks. I've [00:04:30] used the TurboTax Live product. Did you use it too, David? David Leary: I paid for it and never used it [crosstalk] I sent a message and Claudell was not available, and I was very upset. Blake Oliver: We haven't gotten to try QuickBooks Live yet, but I assume it's like the same- is it the same tech? Ted Callahan: It's very similar tech. Yeah, I think the critical difference is TurboTax Live, they are transactionally helping a customer with a problem as you're going through a very linear flow of getting your taxes done. You've got a very clear goal - get that thing done. Bookkeeping is a different matter because it is every month, you've [00:05:00] gotta do it again, and again. You wanna have a person who really knows your business helping you do that, so you need to build a durable connection. So, similar tech; fundamentally, same platform is the ultimate vision, but if you think about building that durable relationship between a team of bookkeepers and that small business entity, that requires some very real back-end lift. Blake Oliver: How does that work, then, given that it's not transactional? Am I assigned a single bookkeeper, or ...? Ted Callahan: Yeah, it's a great question. [00:05:30] The way that it works is you're assigned a team of bookkeepers where you have one primary bookkeeper who's the lead. Their job is really understand your needs, then put together a personalized plan for your business, and then manage the team to make sure they deliver great product on time for that business. Then the team is there to support; provide greater depth expertise as needed; extra muscle in those clumpy seasons when more transactions come in, things like that. Blake Oliver: These Live bookkeepers are anywhere, [00:06:00] right? They can work remotely? Ted Callahan: That's correct. Yeah, that's a great question. Blake Oliver: Okay. United States? Globally? Ted Callahan: Right now, we're only in the United States, and all of the bookkeepers are in United States. It's a very common question we get from the small businesses. They say, "Wait a second. Is this gonna be a call-center experience?" We say, "Absolutely not. This is truly about providing expertise for your business, so in-market is important." David Leary: Where are you at in the size journey? Because, I think, early on, some of the projections- we were working backwards from that and like, "Oh, my gosh. Intuit's gonna be the 60th biggest accounting firm overnight." Are [00:06:30] you still ramping up? I forgot the numbers from before, it was thousands, right? You were gonna ramp up really quickly. Ted Callahan: There's all kinds of great projections, right? The great thing about a forecast is the only thing you know is that it's wrong. It's very early days, right? We're just announcing the service, so we're not providing any public figures. What I can say is that the demand continues to outpace supply, so we're constantly looking for more high-quality bookkeepers, and we can talk about their qualifications, as well. Blake Oliver: Yeah, so who can be a Live bookkeeper? [00:07:00] Ted Callahan: Yeah, great question. Blake Oliver: You did kinda tee that up for me, thank you. Ted Callahan: I know. I was about to say that was a really nice segue [crosstalk] We just met each other, and we've already got that kind of vibe. We ask that they would ... A requirement is you've gotta be a certified ProAdvisor who's active. That means you're current on the latest QuickBooks Online set of features and capabilities. We also require at least a year of active service in that QuickBooks world, so that you have some real depth and content expertise. We also wanna make sure, from a background [00:07:30] perspective, that you either have a degree in accounting or finance or that you've been working as a bookkeeper for at least three or more years. That's because we know a lot of the great bookkeepers - my sister-in-law is actually one of these - haven't actually completed school, but they've developed a real practice and craft expertise that we want [inaudible]. Blake Oliver: I'm a CPA now, but I was a music major- Ted Callahan: Oh yeah? Blake Oliver: -and a bookkeeper for many years before I ever got my accounting, so I appreciate that because otherwise, you'd be kind of blocking people that are otherwise qualified, so [00:08:00] that's great. David Leary: There are some great announcements for the QuickBooks Online Accountants Edition today; great features were added in there, I'd argue. I'm wondering were those features already on the road map, are they being built, or is this because now that Intuit's truly a bookkeeper, is Intuit experiencing these pains, and finally, Intuit is adding real functionality? Those features that were added today were super-super-functional features that people need. Ted Callahan: Yeah. David Leary: Now that you're actually eating the dog food and going through the pains of running a bookkeeping practice, are we gonna see better and better features added to QuickBooks for everybody? [00:08:30] Ted Callahan: Yeah, it's a really insightful question. I certainly think when you really ... When you don't only eat the dog food, but you pay for the cost of the dog food, you look at that set of features that get prioritized probably in a different light. We've been working very closely with the accounting team to prioritize those common features and get them across the line when we didn't have enough resources on them. Blake Oliver: For context here, for our listeners who didn't get to go to the keynote, we were looking at- Ariege introduced the Optimization Center, which you [00:09:00] can actually see an efficiency score for each client based on how automated they are. I thought that was pretty cool; very useful for your Live team, as well, I imagine. David Leary: What I love about that is I see that score, this efficiency score, and you wanna get your clients 85 percent or higher to be efficient in scale. I could see internally that's another way Intuit could make QuickBooks Live work. You're gonna have to scale this massively at the Intuit scale level, right? Ted Callahan: Yeah. David Leary: What's great is I could see you guys using that internally, [00:09:30] but you put it in the product for everybody else, for all accountants and bookkeepers. Blake Oliver: That was a question we had, is would these Live tools for the Live team be available to all ProAdvisors? It seems like that's happening. Ted Callahan: Yeah, I think a key message that I've really been testing with all of the different conversations I've been having is that we fundamentally believe that this is a win-win because we're growing the market for services, right? We talk about out there in the wild, seven out of 10 small businesses aren't connected to an accountant. That's an opportunity [00:10:00] for everybody that's here at this conference, from an accounting perspective. I think, again, that gap that we see where they say, "Hey, we're not quite ready," here's where we can step into that and help provide some transparency in the category of what is bookkeeping, how do I pay, and to have all of that transparency right up front is really clarifying, and I think will help grow that market. Blake Oliver: The two other major features that were announced were a Bookkeeping Review area where- almost like a checklist; "Here's everything that I need [00:10:30] to do," linked to certain areas of QuickBooks. "Here's what I need to close the books," basically. Ted Callahan: Yep. Blake Oliver: With a customizable aspect, too. I think that's neat in that firms will be able to, or individuals will be able to create a customized close checklist for each client. Then, the last one was the Business Performance Overview, like KPI charts ... Not a huge number, but all the really essential ones, right? That brings me to my [00:11:00] next question, which is what exactly is the Live offering going to encompass as a service offering? David Leary: Oh, like will Live eventually get into the advising game? Blake Oliver: Yeah, well ... Are they gonna take me through my KPIs? Are they gonna help me set them up? That's been a big question for us is what exactly is the scope of that $400 per month service? Because I, as a independent ProAdvisor, also offering similar services, I [00:11:30] need to price my services, so I kinda wanna know what is the QuickBooks Live ... What encompasses that? Ted Callahan: Yeah, that's a great question. I would say I'd break it out into three discrete pieces. The first is all around setup; getting that small business customer appropriately set up with their bank, their bank feeds, and their third-party apps which, again, is a place where we see folks can get really messed up. Then, there's that core, I call, meat-and-potatoes bookkeeping work, which is the categorization of the expenses; the reconciliation of the transactions. Then, [00:12:00] also teaching the customer key workflows in the product. Because, again, my analogy for this is QuickBooks is a very powerful tool. Like a chainsaw, you can cut down a huge tree with it, or you could chop off your own arm if you don't know how to handle that thing. Teaching our small business customers how to use the product in the right way is a fundamental task that QuickBooks Live is providing, where the small business owners are getting a lot of value and, again, that's improving their confidence and their desire to actually engage in the product. Your last point on the personalized [00:12:30] reports, that's also a key part of the value delivery because this is all about giving a customer the insights so they can be managing their business better and then making those right decisions to grow their business. Blake Oliver: My QuickBooks Live bookkeeper would walk me through those reports every month? Ted Callahan: That's right. Yep. That's definitely part of the personalized plan. That's what they come up with of, "Hey, what do you need to be managing your business? Where are you?" One of our early customers was a surf shop in Hawaii. They had just gotten a bank loan, and the bank was requiring them to [00:13:00] be providing much more sophisticated reporting. So, they actually hired us to help them as they started scaling up their operations from one to three different places, including a coffee shop. We were very much a part of, "Help us deliver that monthly income statement, balance sheet, statement of cash flows to the bank, so the loan gets paid down appropriately." Blake Oliver: The price is $400 per month. Is that right? Ted Callahan: Oh, yeah. We've actually [crosstalk] we've rolled out three different price points now. Blake Oliver: Okay, because that's what I was wondering - how you could possibly [00:13:30] serve the wide variety of QuickBooks customers at one price point? Ted Callahan: Yeah. We now have a $200 offering a month, a $400 per month, and then a $600 per month offering. Blake Oliver: What differentiates those? Ted Callahan: It's all around the amount of expenses a small business has per month. If you have $0 to $25,000 a month in expenses, you'll be in the $200 skew. If you have greater than $150,000 a month, you'll be in the $600 skew. If you're in between $25,000 to $150,000 of expenses [00:14:00] a month, you'll be in that $400 price point. Blake Oliver: Gotcha. David Leary: That's a good way to do it versus transaction volume. Ted Callahan: Mm-hmm. Blake Oliver: Yeah. Ted Callahan: Yeah. As you would imagine, we explored a lot of different ... The goal was how can we clearly communicate to a customer what to expect in a way that made sense and scaled with what we would need to be doing for them on the back end. David Leary: Now that QuickBooks Live is kinda ... You're advertising it. You're not running a Super Bowl ad yet, or anything crazy like that, but it's being advertised. It's out there. The covers are off. Is it bringing in new small businesses [00:14:30] to the QuickBooks family that just never approached it before or even new accountants and bookkeepers are joining QuickBooks Live that, maybe, the typical ProAdvisor fit wasn't for them ...? They don't have a firm, but they kinda wanna do bookkeeping. Ted Callahan: Yeah, great questions. It brings it back to that vision of solving for both sides of the market, right, both the small business and the accounting professional. On the small business side, the answer is it's both ... We see that 40 percent of our current customers who aren't attached to an accountant who said they need help, they're super-excited [00:15:00] about the service, and they're signing up for it in droves. Then also, like you said, there's a whole slew of customers out there who never considered QuickBooks because they viewed it as do-it-yourself accounting software. They said, "Hey, I don't wanna do my books. I want someone to do that with me," so we're testing into how do you communicate to that set of customers because that's a very different value proposition and, candidly, how- and marketing machine to go do that. That's on the small business side. On the ProAdvisor side, because we have that requirement of you've been active, and [00:15:30] you've been a ProAdvisor for over a year, I think it's exactly what you would expect on the ProAdvisor side, but maybe you had more behind the question. Happy to- David Leary: No, I'm just wondering if ... I feel like there's- you can kinda group some of the ProAdvisors in different buckets, right? I think you have some people that - they're value pricing, they have a niche practice; for them, they just look at QuickBooks Live as nothing. It's not gonna compete with them, et cetera. Then, I think, on the other end of the bell curve, you have ... You'll see it in these Facebook groups; there's people that are like, "How do I grow my bookkeeping practice? How do I get clients?" [00:16:00] Blake Oliver: "How do I get clients?" David Leary: "How do I get clients? How do I market for ...?" Almost, their questions are like they don't really wanna run a bookkeeping firm, and I can see where they're big fans of QuickBooks Live because they're gonna be able to just do what they wanna do, which is just do bookkeeping for small businesses. They can work [from home]; they have lots of flexibility, et cetera. I think that the people that I feel like are the most threatened I feel like are the people that are - they have a practice, and it's very similar to the offering QuickBooks Live has. I think those people feel the most threatened because they do have clients; they have a real business; they're past that "How do I get any clients" phase; but [00:16:30] they're also not in the new world of offering advising, and value-added services. I think those are the ones that have the biggest fears, the biggest threats, and the biggest concerns about QuickBooks Live. Where are those people gonna fit in? Blake Oliver: Yeah. What do you say to the ProAdvisor who loses a client to QuickBooks Live? Because it will inevitably happen. Ted Callahan: Yeah, I think ... All great questions. I think, fundamentally, what you guys are doing is you're segmenting the accounting market into these different groups. I would say, for the ProAdvisors that have their practice, they actually ... This has [00:17:00] been the surprise of the conference for me, personally; they're actually coming up saying, "I would love to partner with you and hand over my bookkeeping practice to you or at least a portion of it. Let's test into that." That's something that we were not prepared to have happen. Literally, I've got over a dozen business cards of different firms asking to do this. David Leary: It's good that you answered that because I actually have a question from a listener who is asking, "Do you plan on partnering with people ...? If I'm trying to grow my firm, how do I utilize QuickBooks Live to help me grow my firm?" Ted Callahan: Exactly. We [00:17:30] actually had two sessions today. We actually had to move to a larger room because there were so many people that were wanting to come learn more about it, which was great. Blake Oliver: I could hand off my lower-end work to QuickBooks Live, right, so that I can focus on the higher-level tax advisory. Ted Callahan: Exactly, all part of that advisory vision that we talk about. That's an important opportunity that we need to now say, "Okay, have we really earned the right to do that?" We'll figure that one out. Blake Oliver: The demand is there, apparently. David Leary: How does that work? Because Rich Preece talked about it before about how Intuit's gonna own [00:18:00] the relationship with the small business owner, right? Ted Callahan: Mm-hmm. That was in that model of exactly how I've been articulating - small business customer saying they're not ready for an accountant. This is different. This is a small business customer who's made that choice, so that's a different world. David Leary: That's what I'm trying ... So, I work for an accounting firm, and I have some clients that I'm like, "Yeah, I need to ... I can't be doing the work for these clients until they get a little bigger, and I can provide some more value." So, they're gonna kick them to QuickBooks Live for a while, and then, how do they get them back? Ted Callahan: Yeah, these are all things we need to go figure [00:18:30] out [crosstalk] As you would imagine, Intuit is a very principled company, and so we would establish a very clear set of principles of is this our customer relationship, or is this the accounting firm's customer relationship? Then, we would have to think through what are the different use cases and make sure we're solving each one appropriately, both for the needs of that small business customer and that accounting partner. David Leary: Because I could see a graduation here. Ted Callahan: Mm-hmm. You could even see it going back and forth, to your point, right? An accounting firm says, "Hey, not right for us. Send them into the QuickBooks Live offering." Then, because we know that when you [00:19:00] work with an accountant, you're more likely to be successful, they graduate; then we can hand them back would be the vision. But you can imagine the complexity of tracking and managing that through time. Blake Oliver: If anyone can do it, I think Intuit can figure it out. David Leary: If you can make it super-complicated, Intuit's gonna figure that out. Yes. Do you ever see a collision between ... You're starting to see a lot of companies now are doing this Software as a Service, or accounting firms are adding engineers. They're having a front-end software product. We've seen acquisitions of tax companies buying accounting software products. Is there a collision course where there's gonna be an [00:19:30] offering like, "I'm a small business owner. I'm getting TurboTax. I'm getting QuickBooks. I'm getting a QuickBooks Live Bookkeeper. I'm getting a TurboTax Live Accountant all in one price point. I just get it all at once." Is this on a collision course, here? Ted Callahan: I mean, you could definitely make the case there's gonna be this grand convergence in the future. Where my head goes to is, have we earned the right to do that today? There's a lot of capabilities in QuickBooks that don't exist yet to have that seamless flow. On [00:20:00] the TurboTax side, they don't even have a business product, to my knowledge, that's online, so that's not where things are. Then, I think, also, the concept of how do you communicate that credibly to a customer? You'd really have to think through - how do you position that? I think anytime we get those big, grand visions that we can all see, "Oh, this makes a lot of sense. Everyone will do this!" Then, you go, "How would you go tell somebody and convince them to buy that if they don't know you?" That bar gets really challenging, it turns out. David Leary: Makes sense. No, I think one of the questions [00:20:30] I have, talking to people, is oversight. Who's making sure the QuickBooks Live bookkeepers are doing their jobs correctly, and where's that oversight? Because, I mean, if you talk to ProAdvisors, in general, they'll get a client and they're like, "Oh, their last bookkeeper messed all their stuff up," right? How are you guys managing that? Ted Callahan: Absolutely. Yeah, no, it's a great question. A couple answers for that. First of all, we're absolutely managing that. We actually have four different roles on the back end of the experience of different bookkeepers, [00:21:00] based on their level of experience. We have everything from an associate bookkeeper all the way up to a senior bookkeeping expert and then, two in between that. That's at the front lines, and only that senior expert is the person who's doing the client-facing work. Then, above that, we actually have two layers of management watching over, where there's lots of support; where we answer questions, but we're also making sure, hey, there's a standard of bookkeeping we want to be practicing because, ultimately, the brand equity of Intuit, it [00:21:30] represents a lot of trust to these small business owners. We have to be delivering what we talk about as a consistent "wow" bookkeeping experience. David Leary: Yeah, I imagine it's ... QuickBooks Live is dead if it starts screwing up people's books [crosstalk] Blake Oliver: QuickBooks Live is dead? Ted Callahan: Yeah, QuickBooks Live is dead. Blake Oliver: Long live QuickBooks Live? David Leary: That'll be the episode title. Ted Callahan: We can see that now. Blake Oliver: Ted, I got one last question for you, which is what is next for you and for QuickBooks Live? Ted Callahan: Yeah. Good question. I would say it's all about earning the right for our customers [00:22:00] to do the job that we've set out to do and consistently finding new ways to delight them. Blake Oliver: Where can people find you online if they wanna connect with you or learn more about QuickBooks Live? Ted Callahan: Yep, so I'm on Twitter. I'm @asciv. Long story, won't explain ... Blake Oliver: Well, we'll have to ... Ted Callahan: Or you can find me on LinkedIn. Ted Callahan on LinkedIn. Blake Oliver: All right. We'll have to hit you up at the party and find out the story behind that [crosstalk] David Leary: How do they get a hold of you, Blake? Blake Oliver: I am @BlakeTOliver, and you, David? David Leary: @DavidLeary. Blake Oliver: Hey, thanks for your time, Ted. This was great. Ted Callahan: Great to meet you guys. Thanks for your time.