If you follow me on twitter, you will have seen me having a conversation with someone very nice who works for Intuit, the maker of QuickBooks. It started when I tweeted about how much I hate QuickBooks. The conversation went on for many tweets. The sad part is that, despite the good efforts of the person manning the QuickBooks twitter account, their “help” was marginal at best, and completely useless for the most part. I do feel bad for them; I know they are trying their best. But if you look at the QuickBooks profile page for twitter, every single tweet is someone complaining. I didn’t see a single “Gee thanks @quickbooks for making my life easier” not one. That is sad. This tweet from them really exemplifies it all. Really? Your support for why it might be my computer and not the software is that not EVERYONE has a problem with speed? This means that lots of people do!
So why don’t they fix it?
It all comes downs to economics. It always does, by the way. But for those of you that don’t know competitive environments, let me give you a short lesson:
QuickBooks has a de facto monopoly on the small business accounting market. They are by far the most common choice. What does this mean? Monopolies have market power:
Though monopolists are constrained by consumer demand, they are not price takers, but instead either price-setters or quantity setters. This allows the firm to set a price which is higher than that which would be found in a similar but more competitive industry, allowing them economic profit in both the long and short run.
In a competitive environment, if people are not serving customers properly, new entrants will enter the market and draw customers away. In a monopoly, the firm decides what price or quantity to produce at. There is a given level of demand for small business accounting software. Especially in our heavily regulated world, businesses really HAVE to keep books. And using a computer is generally faster. So they have to buy something. Enter QuickBooks. QuickBooks can select a price that allows them to cover their cost (not technically, but this is the remedial version). However many customers buy at the product is fine. And then they increase profits by getting more money from each customer who HAS to buy their software at a given price level. Enter the barrage of merchant services, payroll, credit cards, loans, etc.
So, why does QuickBooks have mediocre software? Because no one can scale up enough to compete with them. When Microsoft decides to stop competing with them, what hope do you think a small startup has? Not much.
But wait Andrew, don’t you recommend QuickBooks to your clients?
Yes, I usually do. Why? Because they are a monopoly which means they set the standard which makes certain things easier. And for most clients keeping it fool proof is more important that increasing speeds of their workflow.
If you are willing to invest a little time (which can be painful for a business owner) there are LOTS of great software tools out there to switch to. If you are just starting out, you have it even easier. Pick something new and go for it.
I decided to write this post because I wanted people to know my official opinion on accounting software. There are lots of options that you can use and if you can, I would recommend one of those. But they might require some more work (up front) to find and get going the way you want. QuickBooks is the easy choice. And for some people, the easy choice is the best choice.
For people that about technical stuff, keep reading. If you don’t, you can stop now.
Why does QuickBooks suck? Proprietary database. Here is the example: I have 18,402 transactions in the company file for my CPA firm. This goes back 42 months. The total file size is 72.5625 megabytes. That means that each 253.6 transactions take a MB of space.
Why? It’s just numbers and text. No images, sounds, video, nothing. Each transaction has an average of 100 characters. That means that it takes 1 MB of storage to store 25,600 letters and numbers. This is ridiculous. In addition, the page file size is nuts for something like this. In our firm, we had to create a separate server to hold QuickBooks files (we have lots, for all our clients) because the memory leak in the program was paging out the entire server. It will take ALL the performance you throw at it, and use it up.
Why? Because they built their own database decades ago and each “new” version of QuickBooks is simply more crap… ahem… features bolted onto this chassis.
Why invest more in doing a rebuild when I get to pick the price? Why not keep the database proprietary so it makes it even more difficult for customers to leave, maintaining my market dominance and pricing power?
What you end up with is a Twitter feed full of users complaining. We all hate it, but have to use it anyways.