Behind the launch of the QuickBooks Business Network with Intuit’s Juliana Berger

I don’t know what they serve at the snack bar at Intuit, maker of QuickBooks and the financial ecosystem around it, but when you speak to senior leadership, they seem almost maniacal about serving SMBs. And what the firm has done over the past few years is make its bookkeeping software the center of a financial services ecosystem that includes payments, lending, and banking. 

Now, Intuit is looking to take its ecosystem and tools to midmarket and B2B firms with the launch of the QuickBooks Business Network, which creates one of the largest B2B networks and automates B2B payments, improving overall cash flow for this particular user set.

I’m joined by Juliana Berger, the director of payments for QuickBooks. You’ll hear the passion she has for serving SMBs. We talk about the breadth and depth of Intuit’s SMB offering. Juliana shares the pain points SMBs are feeling in this economy and what the software firm is doing to address them. There’s a lot of talk about invoicing and payments flows with an increasing amount of automation mixed in. Her excitement about the space is infectious.

Intuit’s Juliana Berger is my guest today on the Tearsheet Podcast.

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The following excerpts were edited for clarity.

Helping SMBs 

Juliana Berger: I'm currently the director of payments for QuickBooks. I've had the pleasure of leading this team now for almost about a year. We are ultimately responsible for the full end to end payment needs of the businesses we support. 

I'm extremely passionate about this space and helping small businesses get access to their capital. I've had roles at Meta and Citi and American Express – all in the space. I think it is, quite frankly, the most impactful space where we can make a difference. Access to money is one of those things that define where we live, where our kids go to school, what clothes we wear – it's at the epicenter of the hopes and dreams for small businesses.

Achieving scale in SMB payments, invoicing

We've already grown and shown so much progress. And yet, we've really only just begun on our journey. We currently serve about 7 million businesses worldwide. Our mission is to really help businesses be successful, by delivering end to end financial services that help them stay afloat and thrive. 

One of the ways we measure this is business longevity and how long businesses can stay afloat. According to the US Bureau of Labor statistics, 50% of small businesses fail in the first five years. With those businesses that use QuickBooks Money products, 69% are alive and thriving after five years. The business itself has a ton of credit to take there, but we'd like to think that we play a big part in that as well, in offering a very powerful, differentiated value to our customers over the past couple of years. 

Breadth and depth

That value comes from a combination of breadth of service and depth of insight. We are in the full end to end spectrum of financial services. We offer payment services, capital, and banking. We really look at the end to end customer journey, and we look at ways in which we can intelligently and effectively embed those offerings throughout the customer journey. 

We are maniacally focused on the customer journey and the customer pain point of QuickBooks. That's where the depth comes into play. If you think about the super power of QuickBooks, we see every dollar in and every dollar out for every business we serve. Ultimately, QuickBooks is an accounting and bookkeeping tool, so we see that whole money movement and cash flow visibility. And with that, we can create a very powerful financial profile for the businesses that we support. 

The power of embedded

With that financial profile, we can really get down to the understanding of the needs of those businesses and target very customizable personal solutions to meet their needs at that point of the need. So we're not selling them stuff they don't need – we know when they need it and we only target them at that point of need. And so the result of that is really targeted, very specific, holistic financial service offerings, which we believe then plays a role in letting those businesses thrive. 

Payment and invoice volumes

And obviously, when the businesses do well, we do well. And our numbers have shown that consistently over the past couple of years. Payments volume is up 36% year over year. Our total payment volume is at $125 billion last year in FY 22. And same thing for capital – it has actually tripled over the past year. So we like to think that those success numbers are a validation of our ability to serve that need and that mission. So

If you think about the role we play in invoicing, and this is why I'm so excited about the payments opportunity, we actually have $2 trillion of invoices created in our ecosystem. And yet look at that denominator with that numerator, we've barely scratched the surface. We have a $2 trillion addressable market at our at our fingertips of customers that are actively using our QuickBooks products that we would like to be able to convert as to QuickBooks Money and QuickBooks Payments users so that we can then continue to offer this great value that we that we're able to offer with these financial services.

SMB pain

I think it keeps us all up at night, to be honest. Look, I mean, these are pretty unique and unprecedented times. I'd argue that in modern financial history, this is probably the hardest businesses have ever had in terms of managing their cash flow and accurately planning for the future. We have compounding effects here that we've never seen before. We've got lingering supply chain issues from COVID. And now the war in Ukraine. We've got the highest inflation that we've ever seen in 40 years – this is all really compounding on top of small businesses who in the economy end up feeling it first and a lot of times, end up feeling it worse. 

We're hearing that from our customers. We're keeping a very close pulse on our customers. We recently did a study that showcased that inflation is actually the number one concern for small businesses right now. 99% of them are worried about the impact of inflation. I'm curious who that 1% is that isn't.

Two thirds of those businesses are experiencing cash flow issues, and of those, two out of five are dipping into personal cash reserves to bridge the gap. Let's read this: about 60% of customers are dipping into personal cash reserves and we haven't even hit the recession yet. So this is big. 

I can tell you from the bottom of my heart and with pride that QuickBooks is taking this very, very personally. The team is rallying – they're working double time, day in and day out, maniacally focusing on our top customer pain points. We're saying, Where are the three biggest pains right now for our customers? What do we need to do to solve those pains? How can we accelerate delivery of that value sooner, so that we can get ahead of the curve so that we can be there for the customers when they need us?

Optimizing invoices and flows

We've got the three big problems right now that we're that we're all rallying around. The first is the cornerstone of our business: helping businesses get paid seamlessly and quickly using the invoicing and bill pay functionality that we have. We spoke about $2 trillion of invoices on QuickBooks, but a lot of invoices either don't get paid at all or get paid very late. 

About 64% of businesses have invoices that are still outstanding, 60 days later. And about 40% of the small businesses in a recent QuickBooks study say that they're now repeatedly getting paid late. Now that has a compounding effect, that has downward pressure on their ability to manage their cash flow, because if money isn't coming in, they've already done the work. They're not getting paid if money isn't coming in – it slows down their growth. All of a sudden, they can't pay their employees, they can't invest in new inventory, they can't buy new supplies, right? They can't take on new gigs. And so the whole cog of the wheel starts to crank up and slow down. 

And so a big, big customer rally for us right now is what can we do to make it easier for businesses to request payment, and make it as easy as possible for their customers to pay us. So there are a combination of new payment methods that we're launching to make it super easy for buyers to pay in the most convenient way possible for them. 

We're also revolutionizing the way that we send invoices so they're very, very targeted. We’re looking at optimal timing of sending invoices, looking at ways that we can customize the language of the invoice, looking at just transforming the whole flow and template of the invoice to make them more impactful so that we have a better chance to have those businesses getting paid from the buyers that they've already earned that money from. But even then, it depends on the industry. A lot of industries have net payment terms of 30,60, or 90 days. 

We launched a product last year called Get Paid Upfront (GPU). We are really accelerating that this year, doubling down on it, looking for ways that we can increase the eligibility of it so that with this Get Paid Upfront product, customers can actually receive money for that invoice, before it's actually paid for by their buyers.

Get paid early

The last big problem that we're looking at is just free and instant access to your earnings. We've made it easy as possible for your buyers to pay you. We've shortened the time between that invoice being paid, and you're getting the money. Now how do we get you that money instantly? That's what we're definitely down with on our QuickBooks Checking Account. Our account offers instant and free access to your earnings as a free feature. So if you sign up for QuickBooks Checking, we're doubling down on getting you that money that you've earned, instantly, the minute it's been it's been able to be paid.

Payments trends

The thing that we're seeing the most is that there's a ton of innovation and opportunities still nailing the basics when it comes to payments. There's so much to be done, especially around really groundbreaking omni-channel design and automation and the combination of both. 65% of the small businesses that we recently surveyed are spending a shocking 14 hours a week on completing tasks related to collecting payments. So like sitting in front of their computer and doing administrative work. Let's break that out: 14 hours a week on a five day work week is three hours a day. Let's say you work nine hours a day. That's a third of your work life, doing payments related administrative tasks. 1/3 of your actual energy to grow your business is bleeding in these administrative tasks. 

So just imagine the power of that – what would it feel like if we got a third of our workday back every day? Think about how much energy we could reinvest in growing our business. And so there are two elements to that. For me, when I had that aha moment with that statistic, I was like, my gosh, there's something here: omni-channel intuitive design and automation. We are completely reinventing the workflow and really looking at how we can meet our customers where they are, service them specifically with that need in that moment. And in a omni-channel way, in person, mobile, and web, so that if our customers are sitting on a train, they got five minutes, they can start something on their mobile that's automatically saved, and they can pick it up later on their web. And they can do that interactively seamlessly throughout the experience. We follow them throughout their day, so that they're not sitting in front of their computer for three hours a day doing what they have to do. 

And the second element of that is empowering this workflow automation, workflow intuitive design, which we kicked off this year. We're really excited to get people on this new experience that we're slowly ramping up this year: automation. Automation is key. We launched last year, and we're scaling and optimizing this year our auto reconciliation feature, which means that pretty much 99% of transactions that you do through QuickBooks payments are automatically reconciled, either through an automatic match to match or an auto match that feeds to a match that you can accept or decline. So we take the manual effort out of reconciling your books, out of collecting payments, and then plowing that with further automation, like auto payments and recurring invoices, an auto reminder to your customers – all of that takes that hassle out. 

And then bam, you just got three hours back every day to power your business to grow your business. 

QuickBooks sees up-market and B2B opportunity

I think fintech innovation has traditionally focused on the consume. It started with your robo advisors and with digital wallets, and then started to move into the gig economy. The SMB finance industry is not actually mature, because there's a ton of opportunities. But there's been a ton of innovation happening in the consumer and small business space that we've been able to really capitalize on and deliver really well.

One of the biggest needs going forward that hasn't been spoken about and is still under tapped is actually more on the mid market and B2B space. This is a space that has traditionally not had as much fintech innovation over the past couple of years. It is still very predominantly focused on traditional, and might I say archaic, payment schemes. 70% of B2B is still check-based. It's still very much one of those areas in the space and in our customer set that we're actually finding that are hurting the most because the innovation hasn't caught up there yet.

We see that cash flow issues actually compounded on the B2B side. 52% of our B2B businesses are being paid late, compared to 38% of our B2C businesses. I think now we're really focused on the B2B space, because that's where the biggest gap is, in my opinion, of where we need to focus on the biggest opportunity for us going forward.

Launching B2B network

This week, we launched our QuickBooks Business Network.This launch creates one of the largest B2B networks, and really aims at automating B2B payments and improving overall cash flow for this particular user set. Users that sign up to join the QuickBooks Business Network can search for other businesses in the ecosystem, and they can create and manage profiles and networks. There's a ton of automation savings there – companies are able to send or receive invoices, pay bills seamlessly, and we are adding in new features there to save time and reduce errors associated with manual entry. 

One of the biggest benefits that we've launched with this network is AP automation. Imagine when an invoice is received from the QuickBooks Business Network, you can easily review and easily pay, and easily approve that bill. It's automatically added to your books. It saves you time and the effort of having to manually reconcile your books. You just create this flywheel effect of automation in what is usually a very cash strapped, archaic payment flow. By powering the B2B network with our proven money and payment offerings and by creating and leveraging that bookkeeping automation, we're really excited about the opportunities here.