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Is Intuit "stealing" my clients from under me?

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#1
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We used intuit online payroll (IOP) for accounting professionals for several years to serve about 40 payroll clients.

In thier transition away from "IOP", intuit just sent each of our clients an email inviting them to log in for full service payroll, where intuit files all payroll taxes and payroll tax returns (for less that what we charge them, though i suspect it will not include support for some state filings which intuit has never implemented for Hawaii).

I feel like this is a bit underhanded and quite damaging to my practice. We knew that they would transition the services to another format, but I didn't know that they would offer our clients a cheaper and less complete service disguised as the same thing we do for clients.
 

#2
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Yes, they do. Here's how you need to face it: if your clients like you, they will stick with you rather than going to a multi-billion dollar corporation with questionable practices.

Here's another sad reality: if you actually read any of the terms and conditions for software, there is basically not a single software vendor to trust.
 

#3
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What percentage of your payroll clients are one or two man salary operations vs companies with nonowner employees that are hourly?

For the former, I automate those clients on Gusto. For what Gusto does, the fee they charge is very reasonable. It also frees me up to do higher value tasks. IMO payroll is low value and many payroll companies do a very good job for not a very high cost. We shouldn't try to compete with them but rather accept and integrate them so that we can provide holistic value to clients.

Then again, I hate doing payroll, even my own, so my decisions might be affect that by. :)
 

#4
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About 50/50.

I have been using Patriot Payroll for new clients lately, but have 40 remaining at intuit.

I can see that these 20 (50% of the 40 that are not just s corp owners) are getting a pop up offer EVERY time they log in to be stripped away from my service to intuit's.

It gives them 2 options

1) take a tour
2) convert now

You actually have to click elsewhere on the screen to get rid of it.

I actually agree with you (mvt) about not enjoying payroll and wish to shift from it. But that's a lot of revenue being lured away from us.
 

#5
Beagle  
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When I took a CE class many years ago the instructor commented that it probably isn't a great business practice to give Intuit any information on your clients that you can avoid. We used Proseries one year and decided it was probably a long term bad idea. H&R Block used to sell a professional version of software and it was the same situation.
 

#6
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ItDepends wrote:I actually agree with you (mvt) about not enjoying payroll and wish to shift from it. But that's a lot of revenue being lured away from us.


I hear you. At the same time, I think it is wise to examine your effective hourly rate for payroll engagements, and compare that to your other services such as income tax compliance and consulting. Particularly so if you're materially involved in the payroll process.

When you see that something like Gusto can automate payroll, quarterly and annual employment tax returns, and W-2s for a $40/month base fee plus $6/employee/month, it just makes sense. Both for the client and for me. I don't want to compete with that price for the amount of work involved.

Doesn't have to be Gusto. Any payroll provider that automates payroll and you like would work. That would give you the ability to automate the small corps with only owner-employees. Maybe even reduce their payroll costs too, which I'm sure they'd appreciate. The large clients with hourly employees you'd probably still have to be deeply involved with.
 

#7
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I very much agree, and I wish I could just do 1120s and 1040 tax returns all day and all year along with the tax planning that goes with it. I really enjoy the work, and the hourly is fantastic.

But there's only so many of these I can do, even with extensions (still have to calculate the extension payment).

Payroll is a PITA and a MUCH lower rate, but what else can I do when my tax prep book is so full? Payroll adds a nice finishing touch to the top and bottom lines.

Books?

Audit work? (don't really enjoy so much)

I'm an RIA, but this area of my practice grows very slowly.

What else do you all do?
 

#8
jefffou  
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ItDepends wrote:What else do you all do?


Life insurance/annuities for us. With interest rates moving up, and the markets shaky (I'm also an investment advisor) we have three annuities in the pipeline as of today. Fixed, 5-year no frills annuity with AA companies, clients are thrilled with 4.05% guaranteed.
 

#9
zl28  
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You know INtuit does payroll - we do payroll.

Intuit is advertising they do bookkeeping also for their clients.

Down the road, i envision more of the quickbooks accounts being linked to a corp return, and them offering more corp tax services thru overseas countries where labor is cheap unless the cost of messing up is too much.

It's an unusual dynamic when your software provider is competing with you.
 

#10
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zl28 wrote:You know INtuit does payroll - we do payroll.

Intuit is advertising they do bookkeeping also for their clients.

Down the road, i envision more of the quickbooks accounts being linked to a corp return, and them offering more corp tax services thru overseas countries where labor is cheap unless the cost of messing up is too much.

It's an unusual dynamic when your software provider is competing with you.


Sounds like we need to be sure that we are proficient and profitable at amending returns.
 

#11
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Corporate tax services that offshore usually fall short on the accuracy, knowledge and client service vectors. There will always be individuals who are attracted to them, perhaps is cost if their sole or primary motivating factor, but I wouldn't think most of us compete with those companies directly as our clients have different values and motivating factors.

Cost is not equal to value. The top two complaints I hear from prospects are (1) my current CPA isn't knowledgeable enough for what I'm doing and (2) it takes forever to get a response from anyone at my current firm.
 

#12
zl28  
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The most expensive thing in the world is a bargain.
 

#13
eze  
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zl28 wrote:The most expensive thing in the world is a bargain.


That's a new one. I like...."If you think hiring a professional is expensive, try hiring an amateur."
 

#14
eze  
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zl28 wrote:Down the road, i envision more of the quickbooks accounts being linked to a corp return, and them offering more corp tax services thru overseas countries where labor is cheap unless the cost of messing up is too much.

It's an unusual dynamic when your software provider is competing with you.


Yes, their "workforce" sight is the perfect marketing list....get the email, perfect demographic data, earnings. Evil....but brilliant.
 

#15
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ItDepends wrote:I very much agree, and I wish I could just do 1120s and 1040 tax returns all day and all year along with the tax planning that goes with it. I really enjoy the work, and the hourly is fantastic.

But there's only so many of these I can do, even with extensions (still have to calculate the extension payment).

Payroll is a PITA and a MUCH lower rate, but what else can I do when my tax prep book is so full? Payroll adds a nice finishing touch to the top and bottom lines.

Books?

Audit work? (don't really enjoy so much)

I'm an RIA, but this area of my practice grows very slowly.

What else do you all do?


Financial advisory aside…. Raise your fees. I dropped payroll 15 years ago and never looked back. I fully book myself from Jan to April and 75 percent of our accounting revenue is billed by May 1. The remaining 25 percent is extension work, some consulting, etc. I will never do payroll again.
 

#16
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jefffou wrote:
ItDepends wrote:What else do you all do?


Life insurance/annuities for us. With interest rates moving up, and the markets shaky (I'm also an investment advisor) we have three annuities in the pipeline as of today. Fixed, 5-year no frills annuity with AA companies, clients are thrilled with 4.05% guaranteed.


As long as the client knows the money is locked up for 5 years.
 

#17
wel  
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For many years, Intuit was a software company - developing software for accountants to use to serve clients or for business owners to use for managing their business. They formed relationships with accounting professionals that were mutually beneficial. Intuit developed software for accounting professionals, and accounting professionals advised clients to buy Intuit's products.

Over time, Intuit experienced significant growth from sales to business owners, and serving accounting professionals become a less significant portion of their revenues. In order to continue to grow, they began to offer payroll, bookkeeping, and tax services that compete with the same accounting professionals that they "partnered with" 20 years ago.

They have successfully turned our clients that use Intuit's software into Intuit's clients that we help. They have developed enough market share and brand loyalty that even if we were to advise clients to use other products - they wouldn't. They are using their brand loyalty to advise clients to transition business to them from us.

Intuit doesn't need to work on selling QB/QBO to accounting professionals any more - it's simply something that we must buy/use in order to serve clients that use those products.

Intuit evolved from an ally to a competitor. Their people will act as if this isn't true, and they probably believe that it isn't true - but it's the truth. Personally, I've chosen to limit my business with Intuit to only purchasing QB from them. I won't be purchasing tax software, etc. from Intuit. (The tax software that we use doesn't matter to the client, but not using QB would matter to the client.) Sorry for the rant.
 

#18
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THANK you for the rant. This is exactly my point, but better stated.
 

#19
Derby  
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I put all new businesses on Xero if they need a solution. It's not as shiny, which mostly matters from the client end, but they won't be constantly bombarded with new suggestions to give Intuit their money.

One client accidentally signed up for the Quickbooks Checking account for several months last year. It's fee-free, *except* for the 1% they take off the top of all Quickbooks merchant payments (in addition to their normal processing rates).
 

#20
wel  
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My rant above was based on my observations from being a customer that has used Intuit products for the past 25+ years.

Here's an interesting link to content from the Intuit Investor's Day - https://investors.intuit.com/events-and ... fault.aspx

There is a link to download the slide deck from the event just below the videos. The pdf is 152 pages. I haven't reviewed the entire document, but it's very clear that their strategy for growth is based on increasing their penatration of service offerings to the small business / self-employed market. (See the chart on page 20.)

In the pictograph on page 31, it appears that they have big plans to grow their Quickbooks Live offering 3 years from now. I suppose that this shouldn't be surprising - there is only so much growth that a company can achieve if they focus on serving the software needs of accounting professionals.
 

#21
CP Hay  
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Just another reason I cringe when I hear a credentialed tax person working for Intuit doing TurboTax support. That’s the ultimate smack in the face to peers and the profession. Doesn’t surprise me from the corporate side though. Intuit is a public company looking to make money for their shareholders. It’s never enough for them.
 

#22
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I agree and I don't understand why a credentialed professional would work 40 hours for 12 weeks for $9600.

Even an unestablished preparer could work for just 5 days and easily prepare and file 30 simple tax returns for $350 each and net the same income.

5 days vs 60 days of work - same pay.
 


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