With all the new challengers banks entering commercial banking, there are few firms positioned to service small businesses like Intuit.
Intuit’s various software products like QuickBooks and TurboTax are used by 5 million SMBs to invoice clients, receive payments, reconcile transactions, and file taxes. Through its invoicing capabilities, Intuit processes nearly $60 billion worth of payment transactions every year, said Rob Daniel, the firm’s head of product for QuickBooks Cash at Tearsheet’s Challengers conference yesterday. That’s part of the $1.2 trillion worth of invoices the firm tracks and manages for its customers and the $115 billion yearly of payroll that moves through Intuit’s software.
But when it comes to banking options, small businesses still struggle to get service at traditional banks. Intuit introduced QuickBooks Cash in July of this year. It’s the firm’s small business banking offering that helps Intuit clients track, store and move money around.
The new bank account also uses envelopes, a concept that stores money in a sub account so small businesses don’t inadvertently spend that cash. With envelopes, small businesses can better plan to pay payroll and taxes.
QuickBooks Cash also has a cash planner that gives SMBs a view of their liquidity over 30, 60, and 90 day periods. Cash accounts can do this because Intuit users religiously plug in all their outstanding bill payments, upcoming invoices, expenses, payroll — it’s already in QuickBooks. Using machine learning and historical data, Cash users can plan out different scenarios based on their cash positions.
“Everything that we’ve looked at has been around how we help manage cash flow,” said Daniel. “We didn’t launch a bank account — a bank account is a means to an end of launching a cash flow solution.”
But QuickBooks Cash isn’t just about capturing QuickBooks’ customers money in motion. It’s a strategic move for the financial software company that serves as the “connective tissue” between all of Intuit’s products, including its Capital division that’s lent out nearly $2 billion.
“Being able to bridge that ecosystem together means that across 5 million businesses in the US, we can roll out a solution that helps them move their money faster, because whenever you’re moving money between these institutions, it’s all happening with QuickBooks,” said Daniel. “It happens instantly and seamlessly, and also for free.”
Before he took this role at Intuit, Daniel headed up financial products at Uber. That experience informs his work at the financial software company. Uber had credit cards, what it called the Uber cash product, which was a stored value account. On the driver side, the on demand transportation company offered financial access, providing digital banking and financial services to micro entrepreneurs, particularly in markets like Brazil and Mexico where financial access and inclusion is substantially lower than it is in the US or Europe.
One takeaway Daniel draws on from Uber is that speed of access to money matters and is absolutely critical when it comes to small business.
“It’s like if a driver earned money, they literally can’t keep driving unless they can fill up gas — they need that money instantly,” he said.
“For small business, they can’t hire another employee. They can’t make payroll. They can’t invest in that next capital expense if they have money that they’ve earned, but they haven’t been able to pull into their business.”