One of most businesses' top priorities is keeping track of their cash flow. This is because it’s almost impossible to grow any business without understanding what’s paid, what you owe, and what you owe.
Well, this is where accounting software comes in.
Accounting software is a cloud-based solution that records and reports various financial transactions. These software applications are an excellent option for coworking businesses because they save time and money whenever implemented correctly.
Some of the best accounting software include Intuit QuickBooks, NetSuite ERP, FreshBooks, SAO ERP, and more. When selecting an ideal software for your business, it’s crucial that you analyze each of these accounting software packages by looking at their features, reviews, pricing, and pros and cons.
For instance, Intuit’s QuickBooks has revamped its customer experience in the coworking spaces—driving positive outcomes for customers, employees, and communities. Other financial products provided by Intuit include Mailchimp, Mint, TurboTax, and Credit Karma.
Although the California-based company started by selling desktop software designed to simplify tax-paying, bookkeeping, and other financial tasks, it evolved to leverage cloud, artificial intelligence, mobile, and web platforms to offer software as a service (SaaS). The decision to transition from a one-time license software provider to a SaaS product was motivated by Intuit's desire to improve the customer experience.
Background
Over the years, technology has transformed the accounting profession in many ways. From abacuses and calculators to PCs and cloud computing, technological advances have helped accountants reduce errors, effectively interpret data, and save time. In particular, software and computers in the past five decades have transformed the face of accounting through task automation.
To fully appreciate the evolution and growth of accounting software applications, it’s important to be aware of some of the earliest examples of accounting services. In the early days, like many traditional enterprise software companies, customers and businesses used to rely on a one-time purchase license model. The model involved buying a software license and owning it in perpetuity. In most cases, you also had to pay for yearly maintenance that came in the form of getting the latest software version as well as technical support.
The first accounting software emerged in the 1970s and was meant to ensure systematic and proper recording of financial transactions. A few examples include Peachtree software, introduced as an accounting software package in 1978, an Office suite with a word processor and a spreadsheet introduced in 1981, and Intuit’s accounting software launched in 1984.
Several other one-time purchase accounting software packages were launched in the 1980s—all of them as a solution to most tedious and manual accounting tasks. Users used to purchase boxed software with several disks. They would then use the disks to install the software on their PC. Although the whole process was straightforward as it involved simple installation, the software was just as portable as the PC on which it was installed in.
Over time, computers started communicating with each other and became more networked. Large organizations took advantage of these advancements to set up client-server architectures that many customers could access from their own computers. The client-server architecture had a central computer server where the accounting software was sitting. This led to software as a service (SaaS) since organizations had to pay regular fees for the software's servers.
So, where did Intuit come from, and how has fintech evolved since its inception?
Early Leaders
Intuit's origins can be traced back to 1983, when Tom Proulx and Scott Cook accidentally met at Stanford University. Proulx, a computer science student, was looking for a new software idea, while Cook, a former Procter & Gamble marketing manager, was looking for a code developer to turn his vision into reality. The vision was to develop a software application that would automate financial tasks.
Their discussion afterward made them realize how similar their values, goals, and ethics were. As a result, Proulx hired Cook as a programmer, and the path to the best-selling financial software program began in his dormitory courtyard. This led to the development of Quicken, a personal financial management software.
Here is how Cook came up with Quicken:
After observing the repetitive monthly bills that his wife would pay, Cook felt that there might be a faster and easier way to pay such bills. At that time, the PC industry was still young since developers were still trying to discover how people would use a PC away from an office setting. While at his kitchen table, Cook imagined a software system for automating the bill-paying process.
After calling the company “Intuit,” it became challenging for Cook and Proulx to find a name for their first software product. However, after some research, the two picked the name Quicken. The software was then introduced as a personal finance software program.
It’s worth noting that office accounting software such as H&R Block existed during that time. H&R Block allowed small businesses to do their taxes at their own pace. There was also Manufacturing Resource Planning (MRP II), a computer-based system developed in 1981 to plan manufacturing company resources effectively. In the same year, IBM introduced the first PC.
After developing its first personal finance software, Quicken, it was clear that Intuit was on the path to success. Quicken sales exploded, becoming one of the most popular and best-selling personal financial software products.
With this success, Intuit approached venture capital companies such as Technology Venture Investors and Sierra for financing to broaden their scope and expand their distribution. This led to the launch of QuickPay in 1991. QuickPay worked in conjunction with Quicken to enhance payroll processing tasks.
In 1992, Intuit launched QuickBooks, a fully featured and functional small-business bookkeeping software that provided an affordable and more straightforward alternative to conventional or traditional accounting software. Intuit changed from a startup company to an established corporation the following year. Other products, such as Mint and TurboTax, were purchased by Intuit and are still Intuit’s most notable success stories.
In recent performance reports, Intuit has delivered a strong and consistent growth trajectory. For instance, in 2020, this fintech company witnessed an 83% revenue increase amid a pandemic.
Reasons for Success
Having evolved from a desktop software company to a SaaS platform, Intuit’s financial tools are now widely known by people looking to track their expenses, operate small businesses, and file taxes electronically. While the company has faced serious threats over the years, it has continuously outperformed the S&P 500 because its solutions are embedded in the workflow of many businesses and individuals.
Intuit’s QuickBooks platform is popular among small enterprises because of its automated features, user-friendly navigation, advanced technology like AI, and, most importantly, affordable pricing. TurboTax, a tool that lets you file your taxes with the help of an accountant, has witnessed tremendous growth due to its thriving consumer-facing nature.
A 2020 acquisition, Credit Karma, offers customers credit reports and personal finance products. It reported second-quarter revenue of $444 million for the fiscal year 2022. With the purchase of MailChimp in 2021 and its integration with QuickBooks, Intuit has enhanced the platform beyond accounting. MailChimp is a marketing automation platform that helps engage and manage customers, clients, and other parties.
With these success stories, you probably want to know the tactics and strategies this global technology platform uses. Well, Intuit’s primary asset for its success is data. For many years, the company has been able to use data to gain insights about accounting solutions and then take actionable intelligence on those insights.
The company also uses AI to offer customers an exceptional experience and solve their problems. For instance, TurboTax Live uses AI to connect you to a tax expert who can help you file your taxes correctly. With Credit Karma, you also get access to financial insights that let you tackle your current financial challenges.
Summary
While Intuit started with the sale of one-time purchase products, technological and business changes led to the increased need for cloud computing. With faster performance and improved collaboration, accountants and auditors have enjoyed the many benefits of accounting software applications.
The use of SaaS is surging as more and more organizations are turning away from on-premises software. Ongoing maintenance, company responsibilities for server hardware, and the initial investment have led to companies thinking twice and turning to SaaS.
Another compelling reason for using cloud computing in accounting and other sectors is that it doesn’t represent an all-or-nothing proposition. Accountants and auditors can either maintain their own software (self-hosted servers) or turn to public cloud hosting service providers.
As the cloud becomes more pervasive and software becomes more powerful, accounting, and financial companies that don’t leverage these technological advancements run the risk of falling behind and becoming less efficient than their competitors. These software applications also reduce the chances of security breaches because no files will be misplaced, or data shared with unauthorized persons.
I see a future where more companies will embrace multiple cloud providers as it allows them to choose the best features for specific tasks as well as save on cost.
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