Intuit, the maker of popular QuickBooks accounting software, is tweaking the terms of its online subscription plans next month--and some business customers are complaining that the changes amount to a steep price hike.
Starting April 10, Intuit will impose new usage limits on its existing tiered plans. As a result, if you're a current customer you may outgrow your plan sooner than expected. For example, some customers currently using QuickBooks Online's highest-priced plan at $720 per year will need to move to a $1,200 per year plan, a 66 percent price increase.
He @Intuit & @QuickBooks , I understand price increases are a part of business. But an instant 375% increase in my monthly cost to keep the same functionality is abusive. My monthly will go from $40 to $150 in April. Not cool.https://t.co/79exUE9TMT-- Bon Robert (@RobertLane93) March 7, 2019
The price increases reflect Intuit "investing in functionality," says Rich Preece, U.S. country leader for QuickBooks. Outgrowing the platform's features and functionalities is a big reason customers leave QuickBooks Online, and the new Advanced plan is meant to cater to the growing businesses on its online platform, he says. The Advanced plan offers the ability to upload or send hundreds of invoices simultaneously (instead of one at a time), set custom user permissions, and several additional features.
Companies that bump into the limits too quickly may feel "uncomfortable," Preece acknowledges. Intuit's Twitter account, @QuickBooksCares, has often been quick to respond to customers' questions and concerns.
For many, the changes come after yearly increases since 2016. Frequent temporary promotions can make QuickBooks' pricing challenging to track. Different trial periods and software add-ons, such as payroll processing, can affect whether some customers experience price increases, Intuit says.
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QuickBooks Online currently has three basic plans: Simple Start, for one billable user ($240/year); Essentials, which allows for up to three users ($420/year); and Plus, which gives access to up to five users ($720/year). What's new is customers will max out of those basic plans if they need more than 250 "chart of accounts" listings (a record of a company's accounts and balances), and more than 40 locations and classes (categories used to track different segments of a business). Previously, no limits existed for those plans. Once you grow beyond them, you will need to upgrade to the Advanced plan for $1,200 a year, which has no caps on accounts, classes, or locations, and includes access for 25 users.
For some growing businesses that need additional software capabilities, jumping from a $720 plan to a $1,200 plan may seem inevitable and simply a cost of doing business. The price increases may follow the "Netflix effect," says certified public accountant Gene Marks, who is president of financial and technology-management consulting firm The Marks Group PC. The hike is usually enough to make customers grumble but not enough to make them quit the service, says Marks, who is also an Inc.com columnist. "QuickBooks is a leader out there. [It has] companies who have been using [the software], in some cases, for decades," he adds.
Indeed, close to 4 million businesses subscribe to QuickBooks Online, which was first launched in 2001 and is the dominant accounting software for small-business owners. In 2017, industry research firm Research and Markets estimated the global financial accounting software market was $4.4 billion and on track to grow to $10.4 billion by 2025. Xero, FreshBooks, and Sage are among Intuit's biggest competitors, according to the firm. A number of startups have emerged in recent years with their own versions of Web-based accounting software for small businesses, including inDinero, Wave, and Bench.
Some business owners say despite the higher prices for QuickBooks Online, they haven't experienced better functionality.
"It seems like they keep bumping the prices every year, and I'm not getting any more reliability out of them, and the features are not really benefiting me," says Erik Valid, who has been using QuickBooks Online for his New York City commercial photography business since 2014. Frequently, his bank accounts become disconnected from QuickBooks, and the platform goes down for several hours at a time, says Valid, whose business has more than $100,000 in annual revenue and clients like luxury-clothing retailer Ted Baker and Fujifilm. While the new usage limits will not affect him immediately, he says, he is considering switching to another accounting software program, such as FreshBooks.
Jared Lovenduski also says technical issues and the new plan limits are prompting him to consider switching from QuickBooks Online. Lovenduski is the co-founder of Lillabee Baking, a four-employee business in Boulder, Colorado, with products selling at retailers like Whole Foods and Kroger and just under $1 million in annual revenues. Since he switched from the desktop version of QuickBooks to the online version in November, the site has crashed two to three times, he says. When he reached out to Intuit by phone, Lovenduski says, he was advised to access QuickBooks via a browser instead of the app. He says he is concerned that he's going to bump into the new plan limits sooner than he'd like and is looking at other accounting software, including Wave and Xero.
Late last year, QuickBooks Online suffered a widespread outage, as accountants and business owners were working to wrap up their end-of-year finances.
A spokeswoman for Intuit declined to comment on individual customers' situations or the outage in December. She says: "We have no reported systemic issues of QBO crashing or slowness of the product. We are well within SaaS [software-as-a-service] industry standards on availability and performance. We monitor service level agreements, product usage, customer feedback, and simulate customer experiences to ensure we continue to meet and improve upon those standards across our product ecosystem." She also says that bank account syncing issues "usually are not a result of QuickBooks Online performance," but rather an issue with the bank. QuickBooks customers can sign up to receive alerts when there are reported issues or maintenance affecting the site's performance.
According to some reviews, QuickBooks may still be the best accounting software around. PC Magazine gave QuickBooks Online its 2018 Editors' Choice award for "offering the most effective, comprehensive, useful, and usable tools. Furthermore, its depth, flexibility, and extensibility outclass those of its rivals."