Here’s Why Finance Chiefs Don’t Take You Seriously

A CFO’s frustration with QuickBooks, Xero and most of the software options in the mid-market space

Photo by Gene Devine on Unsplash

Dear QuickBooks,

Let me start by saying you’ve got a great program. It’s capable, streamlined and cost-effective. Your horse is the leader of the small business accounting software race.

Some people say Xero is nipping at your heels, but I get it, they only say that because your corporate parent is kind of cocky and big, and maybe doesn’t care enough about data protection and audit trails. Because of that, the IT and startup crowd puts up with the “Beautiful Software” to get back at you. It’s more of a vote “against QuickBooks” than “for Xero”.

Wave and FreshBooks are creating a small cloud of dust behind you too, but they’re after small freelancers, and those folks probably won’t write big checks to anybody, much less you.

Your problem is you aren’t respected by the hard-core finance crowd. They look at you as an entry-level pony at best. They don’t think you are the right horse for the heavier work of a mid-sized business. By “mid-sized”, I’m talking about companies with 5 to 100 employees and $3 million to $25 million in revenue.

I think that view is misguided. With a few changes, you could win the respect of CFOs and be the mid-market accounting software of choice.

But to get there, you’ll have to be open to change.

I know, I know, you’ve dominated small business accounting for maybe 30 years. I know, you’re actually selling millions of copies of software and we finance chiefs haven’t sold one. I know, it’s easier to be a critic than to actually write code.

But please hear me out. I’m not saying you aren’t the best. You are the best, for sure in the entry-level arena. I’m writing today because I think you could lead the mid-tier market as well. There are a lot of companies in that range that started with you and would like to stay with you.

The ideas I’m sharing should keep these mid-sized companies in your pocket longer, or maybe even bring them back after a stint with a higher-tier ERP program like Dynamics.

If nothing else, I think these changes would build goodwill among the finance crowd, which you could really use.

Are you willing to listen? Read on.

What You Need to Do

Step 1: Turbocharge your chart of accounts functionality.

This point alone would take a lot of wind out of the sails of the Tier 2 software above you. You see, most of them have two key features you don’t:

Key Feature #1 — Segmented chart of accounts. For example, a program like Viewpoint allows you to have Account 7500.01.01 Advertising. The 7500 is the base account (Advertising) that is used for high level financial statements. The next .01 might be the Retail Division and the next .01 might be the Boston location. This segmentation enables income statement breakout by division and location.

Please don’t point out you already have that in the form of class tracking. That doesn’t work well for finance types, because the class thing isn’t in the chart of accounts. It’s like a tag that’s really hard to see if people get wrong. Plus it’s really hard to export class detail to beloved Excel.

Which leads me to the other thing your chart of accounts doesn’t have…

Key Feature #2 — Ability to export a clean chart of accounts to Excel. This one simple feature would win you a ton of respect from the accounting community. I really like your sub-account functionality that lets you have say four Rent sub-accounts (Rent-Omaha, Rent-Kansas City, etc.) that roll up into one granddaddy Rent account. It’s not the same as segmented accounts, but it’s a good workaround.

It all falls flat, however, when you go to export these subaccounts to Excel. The parent account name is tacked on to each subaccount. So you have “7000 Rent:7010 Rent-Omaha”. I just want “7010 Rent-Omaha” (actually I want “7010” and “Rent-Omaha” in separate columns!) so I don’t have to go through and delete the parent off all the subs.

I realize there are differences between the Desktop and Online versions, but I can’t seem to get a perfect clean export out of either one. A simple thing like that is important to CFOs and would keep them from looking across the fence.

These tweaks would also leave Xero in the dust. Xero doesn’t have segmentation either (or even sub-accounts) so here’s your chance to hit the passing lane.

Step 2: End the practice of Jobs/Projects being Sub-Customers.

I get it, maybe this is the “Easy Button” for some of your non-accountant users. But it’s really a mess. You probably don’t realize how many times people run into issues when they have a Customer Smith who has Smith Job 1 and Smith Job 2 under that.

Aside from some messy invoice and payment issues (at least in older Desktop versions), the real issue for me is the messy reporting. I’d like to see clean job/project profitability reports that aren’t based on the customer/sub-job structure. Ideally, these reports would show one clean row for each job, and customer name would simply be a column along with contract price, cost-to-date, etc.

Maybe it sounds like nitpicking. But here’s the deal — it’s sort of like a car with a lot of little problems. Finally you say, “enough of this”, and buy something better. To really own this mid-market space, you have to keep CFOs from saying that.

Step 3: Make a way to denote a down payment as, listen carefully, a down payment.

When a customer walks in and pays 50% down on a project, the best we can do (I know there are workarounds, but they’re painful) is enter the amount as a regular payment against that customer’s account. There is no deposit invoice to give the customer, and the payment sits in Accounts Receivable as a negative.

Some businesses, like contracting and custom manufacturing outfits, have so many down payments their accounts receivable are negative. It makes it impossible to see at a glance what true A/R is, and makes the balance sheet look really weird.

This is truly one of your big deficiencies. A surprising number of people who use your software collect down payments. The big workhorse software packages aren’t great at down payments either, but at least they’re willing to make customizations. You frown (as in total stare-down!) on customizations. So we’re stuck.

If you don’t know what I’m talking about, I assume there are a few accountants floating around Intuit who could explain what I’m trying to say. This feature would set you apart from even a lot of Tier 2 platforms. CFOs would hate to “upgrade” because they’d be losing this impressive functionality. That is the type of edge you’re looking for.

Step 4: Educate CFOs on your cutoff options.

I mentioned that a lot of medium-sized-business CFOs are cynical about you. To them, you’re like a flea-bitten rat terrier running around the barnyard that isn’t good for much but trouble.

Why do they think that way? It has to do with cutoff, or the ability to change things after a period is supposed to be closed. In my opinion this commonly-held view is a bit of an over-reaction. You’ve made some good strides in this area. For example the functionality to void checks in a different period than the check was created, is great. Your closing date password thing is pretty solid too, although as one practitioner pointed out, you could use a year end hard-close feature.

You should add a few more closed-period functionality items like the voided check feature, then splash that functionality all across your website. Somehow you’ve got to get the finance crowd to quit looking askance at you, and to me cutoff/lockdown is where it all begins.

Step 5: Add functionality to allow a local backup of QuickBooks Online.

I’ll keep this short. Mid-sized companies have IT people. IT people need local backups, typically every day or even several times a day. They need to be able to restore yesterday’s data file after an untrained or disgruntled employee makes a mess of the file. You really, really need this functionality.

Step 6: Somehow legally mimic Xero’s custom reporting.

I know, it’s embarrassing to have Xero beat you soundly on a point. Especially since Xero can’t even get the columns on their reports to go in the right order (they start with March 2019 on the left and end with January 2019 on the right).

Truth is, Xero’s custom reporting is pretty robust, even “beautiful”! It needs to be, because their chart of accounts functionality is so poor. Xero custom reports allow you to do what Statement Writer does for QuickBooks Enterprise — just much slicker and better. I hear there are apps, like Fathom, that might do the trick for QuickBooks Online, but I would just point out Xero’s designer functionality is built-in and included with the monthly fee.

If you upgraded your chart of accounts functionality and added Xero’s smooth designer custom reporting…that would be amazing. You would pretty much own the racing lane.

That’s It

I’ve tried to focus this letter on the points that really matter to finance people at the businesses you’re targeting.

I’m not whining about little things like the inflexibility of QuickBooks Online payroll (well, I am a little — if you don’t loosen that up a bit, people will all switch to Gusto), or the annoying thing of only allowing one customer or vendor name in a journal entry (Desktop version). Or of not allowing a temporary inventory item.

I’m truly trying to help you take your goods to the next level. I like when people give me constructive feedback so I’m doing the same for you. You’re frustratingly close to perfect in your space, and I think with these few changes you could capture and own the mid-tier market for a long time.

Hey I’ve got to run, I think I hear Xero calling…something about thanks for copying them on the letter, and there’s more than one horse that could win this race!

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