QuickBooks Price Increase

There may be errors in spelling, grammar, and accuracy in this machine-generated transcript.

Alicia Katz Pollock: Welcome to the unofficial QuickBooks accountants podcast. I am joined by my good friend Alicia Katz Pollack, the original, the one and only Qbo Rockstar CEO and founder of Royal Way Solutions.

Alicia Katz Pollock: And I have the privilege of collaborating with Hector Garcia's CPA, the founder of Right Tool for QuickBooks.

Hector Garcia: In this episode of the unofficial QuickBooks Accountants podcast, we're [00:00:30] going to do another episode of Wheel of Rants. So we have a whole bunch of topics that we've selected that we have in a Google doc, and then we put it in this app, and then we do a Wheel of rants. Uh, we spin it and then whatever comes out, we will talk about that for a good 20 minutes or so. So let's spin the wheel. Quickbooks online price changes. Now that's fitting, Alicia, isn't it? Because we're [00:01:00] recording this, uh, late June and they literally just made a big announcement of price changes. So, Alicia, should we break this down into let's just first objectively discuss all the numbers, all the price changes, and then subjectively, we can go into the rant that we can make it informational, informational, and then we can make it personal afterwards.

Alicia Katz Pollock: Sure. Yeah. Let's definitely keep this organized and objective, at least to start. All right.

Hector Garcia: All [00:01:30] right. So let's start with QuickBooks online QuickBooks online. Prior to this particular price change, which officially starts becoming effective August 1st. And we'll discuss that there's phasing of dates. So let's just discuss August 1st and why August 1st? Well, if you were a shareholder of Intuit stock, you know that the fiscal year ends July 31st and August 1st is the new spring of qbo price [00:02:00] changes. And every August 1st we're expecting something to go up or around that time, something to go up in price. So prior to August 1st, the pricing of QuickBooks online is $20 a month for self-employed, $30 a month for Simple Start, $60 a month for essentials, and $90 a month for plus. And by the way, I love that 30, 60, 90 easy to remember and then $200 a month. And we did an episode on it said [00:02:30] worth $110 more or double that. We talked about that. It was actually kind of fun. And then $200 a month for advance. There's also a new product that they announced, you know, last year in QuickBooks connect, which is QuickBooks ledger, which is a $10 a month product. And let's I'm happy to announce that QuickBooks ledger for $10 a month is not being touched. It's not changing. So that's good. That doesn't mean it will never change it. Just for now. Not changing. So I like that the [00:03:00] promise is at least lasting a year of the $10 a month. Now, what are the new prices? Yeah. Go ahead.

Alicia Katz Pollock: I actually have a question. This says self-employed, but didn't they change that to solopreneur?

Hector Garcia: Yes, a good question. Solopreneur is a experimental beta like product that has less users than self-employed. Okay, so self-employed and solopreneur are actually two different products, interestingly enough, and they're still trying to figure out how to how to migrate [00:03:30] self-employed to solopreneur. And the the difference between self-employed and solopreneur is a solopreneur is built in the new cube in the new Qbo uh database system, which means solopreneur will eventually allow you to move up to simple start essentials plus which which self-employed can't. So I don't know why they excluded solopreneur from here. Maybe they didn't want to mess with it. Um, but self-employed because it has a lot more [00:04:00] users is the one that they made a price change on.

Alicia Katz Pollock: Okay, that makes sense.

Hector Garcia: Okay. So the new again, the new price change starting August 1st for self-employed is going to be $25 a month. That's a $5 increase or 25% increase if you want to get geeky about that. Uh, for simple start is going up to $35 a month from 30, so still a $5 increase. I don't know what the percentage of that is. Uh, point 1,616% price increase, whatever [00:04:30] it is, then we for essentials is also going up $5. So you see the pattern here. Self-employed simple start essentials going up uh $5. So that's going from 60 to 65 uh dollars. Interestingly enough that's less than 10% price increase. And then we have a very interesting one which which kind of breaks the mold, which is plus is going from 90 to 99. So it didn't go up by five, it didn't go up by ten, it went up by [00:05:00] nine. And I think we know psychologically the reason why.

Alicia Katz Pollock: Yeah, you can tell that they wanted to make it $100, but then people would flip a biscuit. So they they backed it down a dollar.

Hector Garcia: Right. So it kept it under two digits I think this is so there. If there is a QuickBooks, I'm sorry, not QuickBooks, um, cloud based software under $100 and they want to be categorized in there. I think they wanted to do that. So they want it to be in the under $100 category for plus, which in my opinion [00:05:30] is really the only version of QuickBooks online I ever look at because A classes, locations, budgets, projects, all that stuff. And then we have advanced that went up $35. So from 200 to, uh, to 235, which is about a 17% price increase. So very interesting. You know how this this wasn't a hey, let's add 20% across the board. They kind of like with a scalpel. They went and they got $5 here, $5 here, $9 here, $35 there. Now [00:06:00] for all new subscriptions or brand new people jumping into Qbo starting August 1st, this new pricing will kick in if your client is paying for QuickBooks on their own, or what they called client billed subscriptions for Simple Start, Essentials Plus and Advanced. It will also kick in on August 1st. For some strange reason. Self-employed kicks in on August 15th. I don't know why why I did that, but like they separated [00:06:30] that 15 days apart. And if you, the accountant are paying for the subscription. So accountant bills subscriptions. That kicks in September 1st. So I think August 1st is like the global warning shot. And then they got the accountants have, you know, 30 days to remember that the price is going to go up September 1st if you're paying for your own clients, if you're paying for your clients qbo files, the client's not paying. You're paying. All these prices come into effect September 1st. And of course, your [00:07:00] 30% discount applies to that.

Alicia Katz Pollock: Yeah. Now on September 1st when they go over to accountant build, keep in mind that depending on when your monthly bill is like mine's not until the end. So I'm not going to see my price increase until almost October.

Hector Garcia: Right. So it's after September 1st when the billing kicks in. Right. So all the new invoices or charges that come in after September 1st will have the new price increase. That's pretty interesting. Now the added one more thing that was kind of interesting and this was [00:07:30] a little bit tricky okay. And won't affect a lot of people. It's good to mention which is September 1st, 2020 for customers that were added through QuickBooks Online accountant. So these are the accountant billed new account billed clients who signed up after March 1st, 2024 will retain the current price until six months after the subscription date. So essentially is at least six months of age of the account or September 1st if it's if [00:08:00] it's if it's older. So that's kind of like how they did it now. I guess they did that so they can respect at least six months. Yeah. Of a quoted price.

Alicia Katz Pollock: You know I'm super happy to see that. I actually just signed up somebody on Simple Start yesterday. And so I told him that the price increase was coming. But it's nice that he's not going to say it until the end of the year.

Hector Garcia: Okay. And they did also clarify that that if there is a promotional price or a promotional discount, it will even if the price change, the timeline of the [00:08:30] discount will stay. So let's say, for example, you set them up in July and you and you have a 30% discount for 12. For 12 months. You got the 30% in July, you got the 30% in August. Um, and then in September when the price goes up, uh, it will still be 30% off the new price. Okay. That's just kind of like what the concept is. Uh, although, as I mentioned, if, if, if it's accountant built and it's after March 1st six months have to go by before they increase [00:09:00] the price.

Alicia Katz Pollock: I think I actually read this differently though. I read this as if you have, for example, a 30% off. You're going to stay at that price until your end, until that promotional period is ending. And then you'll come back in at the new retail, which, oh, okay. If I'm reading this right, I think it means if you have that 12 month 30% discount, you're not going to see a change in your bill until the end of that 12 month period.

Hector Garcia: Okay, I see I see what you're saying. So if it's if it's the same thing, I guess would [00:09:30] be for the three month 50%. So if if the price change lands within the period of the discount and in this case it would be promotional discount. It's always promotional discount is always client bill not accountant build. Because accountants don't have promotional discount, they just have the 30% for life. So if it's client building has a promotional discount, it will stay. I guess that if you set up the qbo file in in your firm and you you didn't set it up as accountant build, [00:10:00] you set it up as client build and you opted not to do revenue sharing and you gave them a promotional discount then, uh, until the end of that promotion, they will continue with the old price. Okay. That's interesting. That's a lot to remember, but that's interesting. Yeah. Okay. That's good.

Alicia Katz Pollock: That makes sense, though, because, you know, if your price change in the middle of your promotion, then all of a sudden like. Yeah.

Hector Garcia: Yeah, yeah, that makes total sense. I actually understood that discount remains. But of course it's not just the discount, the discount and the and [00:10:30] the price. That's great. That's great. But if you're if you're getting a 30% discount yourself for life, and that's not a promotional discount.

Alicia Katz Pollock: That's that's your wholesale discount.

Hector Garcia: That's okay. Yeah. That's that's that's what tripped me up. Okay. Now we have QuickBooks Online Payroll. Quickbooks Online Payroll is also going up in price. So Payroll Core prior to this price change was $45 a month plus $6 per employee per month. That's going to go [00:11:00] up to $50 a month, and the per employee fee is not going up. So it's staying at $6. So there's about an 11% price increase on the core monthly base for payroll premium. It's going up from $80 a month to $85 a month. So the same single $5 increase But the per employee is going up from $8 to $9. So there's a, you know, whatever that is, 12, 13%, 15% price increase, 16% price [00:11:30] increase on the per employee charge and then Payroll Elite, the highest version of payroll, the one that comes with full QuickBooks time and job costing capability, is going up from 125 a month from $125 a month to $130 a month, and the per employee cost is going up by a dollar. So simplified across the board or payroll, subscriptions are going up by $5 on the core monthly subscription and on, uh, Premium and Elite. They're going [00:12:00] up just by $1. So it's not a huge price increase when you look at it by dollar. But it is it does add up percentages, you know, percent potentially. Yeah. Any thoughts on that?

Alicia Katz Pollock: If you have a lot of employees you're going to see a big change. But otherwise it's not going to be that painful.

Hector Garcia: Right. And the dates are the same for payroll. So if the client is paying on their own it will be August 1st. If the if the accountant is paying it would be September 1st. Okay. So that's qbo pricing increases. [00:12:30] Now let's talk about QuickBooks desktop price increase I was telling this objective part of the podcast where we're just we're just saying numbers, okay. And then we'll talk about our opinion afterwards. So QuickBooks desktop um, QuickBooks Desktop Pro which was prior to about 2011, 2020, sorry, 2021 was about 350 or or $400 for a subscription the last three years, um, and in 2022, [00:13:00] it officially went to annual subscription and the price went up to 549. Now, with these new price changes, it's going from 540. It's going sorry, it went from 549 and then it went from, um, from 549 to 649 last year. And now this year starting. What's the date on this? Uh, this is an interesting one. This one is after September 30th, which is pretty interesting. So the QuickBooks desktop is after September 30th. It's [00:13:30] going from currently 649 per year for Pro to 9.99 per year. We're talking about sorry, 9.99 per year. So it's going from 650 to $1000 a year for one user. So from 650 to $1000 a year for one user. Last year it went up from 549 to 649. And two years ago it went up from like $400 for like maybe like four years, three years ago, went from like 4 [00:14:00] or 500 bucks for a three year license to five, 49 per year. So we're seeing aggressive price increases. And this one is the biggest we're talking about what is this 50% price increase on this which is pretty big. So that's the first thing. So do you have a reaction on that. This is just pro by the way.

Alicia Katz Pollock: Yeah I'm kind of sitting here with my jaw dropped for any of you seeing the video I'm just like flabbergasted over here.

Hector Garcia: Yeah. And we haven't talked about two years or three users for Pro is actually not published. I assume [00:14:30] that there's you know, there's a price sheet somewhere for that. But just just comparing the one user now for Premier, which again, it used to be like $600 for a three year license. Uh, then it went up to like 799. That went up to 899 and last year went up to 949. This year is going from 949 to 1399 for a single user. So again, another approximately 40%. Yeah, yeah, 4,045% [00:15:00] price increase. So you're flabbergasted because they had the guts to go so high. But you're not necessarily surprised. Right. Exactly.

Alicia Katz Pollock: And definitely not surprised. And it and it immediately had its intended effect because the migration I just did yesterday from somebody on Mac who's on Mac 2021 once Once he discovered that it's going to be $600, he's like, okay, Alicia, you've been telling me for years I needed to make this change that using QuickBooks for Mac [00:15:30] is like nails on a chalkboard. So I don't want to do this, but let's go ahead. And so I migrated him yesterday and he managed to keep him in simple start. And at first he was like, you know, $30 a month. That's a lot of money. But now when he's comparing that to what he would actually be spending on Mac, it's a good business decision. It's infinitely cheaper. I mean, remember back in the day when Qbo was so expensive that nobody wanted to go to it? Intuit is doing making [00:16:00] good business decisions because now they're making desktops so expensive that you're not going to want to stay on it.

Hector Garcia: That's why I still own Intuit stock.

Alicia Katz Pollock: Yeah, exactly. Buy stock everybody.

Hector Garcia: So anyway, the two user or three user for Pro is going to be somewhere in the 1500s to maybe $1,800. Uh, again, I don't have the price sheet.

Alicia Katz Pollock: So it's not the double of the 999.

Hector Garcia: It might not be. I don't know. A good question. Um, but a two [00:16:30] user is probably going to be 1500 and a three user probably going to be about 2000, maybe double for a for three user and the five user premier. If one user is 1399, this is going to be close to three grand or four grand. So we're already in QuickBooks enterprise pricing world if you can kind of think about it. So this signals to the merging of the desktop concepts uh, to all just be enterprise. And this signals that we're going to be in a qbo and enterprise world that pretty soon [00:17:00] when we say desktop, really we meant enterprise, because if you actually think about it, um, you know, a couple hundred dollars more gets you enterprise. And enterprise has a lot more stuff, especially enterprise gold and platinum that really has payroll built in. Uh, so that's an important piece. So again, the price changes will, uh, kick in October 1st. So after September 30th. And these are annual subscriptions for, uh, QuickBooks desktop. And you know what it's worth mentioning to Alicia that [00:17:30] and we I think we did a video on this where I forgot what the date was. I think it was July 2024, where it was the deadline to buy new QuickBooks desktop subscription. They just extended that, uh, two more months. So it's no longer July.

Alicia Katz Pollock: It's now September, September 30th. Well, that's great. I guess it's.

Hector Garcia: Something. Yeah, I guess it's something. Yeah. So. So, yeah, to clarify, I guess to clarify, if you're a current QuickBooks [00:18:00] Desktop Pro user, QuickBooks Desktop Premier user, coming October 1st when you renew your QuickBooks Pro Premier, these prices will go up if you don't have a QuickBooks Desktop Pro or Premier license, you can still buy for the first year up to September 30th, a $649 a year Pro license, or a $949 a year Premier license. And then starting October 1st and [00:18:30] up, you can no longer buy new software. So this is not the price of software. This is the renewal of software. So after October 1st, there's going to be a lot of surprise people, especially the ones that didn't read the announcement, didn't read the pop up or whatever, because QuickBooks pops up, so many moved to or moved to Qbo. And then they basically out of those those pop ups in many of those pop ups, they're going to give you the they're going to give them the warning that, hey, you're you're going to see a $1,000 charge as a pro user [00:19:00] on your credit card after October 1st. A lot of people won't know this. A lot of people are going to freak out. A lot of people are going to be like, well, how come I'm paying a thousand bucks? So there's going to be a lot of angry QuickBooks desktop customers when this happens.

Alicia Katz Pollock: And because of wherever they are in their renewal cycle, we're going to be hearing about this for the next year. So, you know, if they didn't, if their renewal is may, you know, they're not going to hear see it until 2025 if they're paying annually instead of monthly. So this is going to have kind of a long term grumble.

Hector Garcia: Right. So [00:19:30] so for the accountants here listening to the podcast that support QuickBooks desktop clients and those QuickBooks desktop clients pay the subscription on their own between October 1st of 2024 to September 30th, 2025. Prepare to have a lot of awkward conversations about price changes about comparing desktop versus online and and maybe some rants about I wanted to go online, but it doesn't have this feature or that feature. So I think Intuit needs to step it up in, uh, product parity. Okay, I [00:20:00] understand QuickBooks online would never be QuickBooks desktop. I get that, okay. But there's certain certain things that the average business owner, not the accountant. I think most accountants intellectually, uh, accept the fact that we need to go to the cloud intellectually effective, accept the fact that that AI is coming, that a cloud based system is going to be, uh, more conducive to all these changes that are coming. And because bank fees is so great in qbo and reconciliation is [00:20:30] so great in Qbo and Qbo never has a bug, wink, wink and Qbo never goes down. Wink wink. Um, you know, we accept the fact that as accountants, qbo can be as useful as a tool as QuickBooks desktop was. But for business owners that do simple things like customizing their invoices or their purchase orders, and you can't do that in Qbo, it's they're just flabbergasted by this whole concept that I now have to pay, you know, three times what I used to pay [00:21:00] just to two years ago. Um, and now you're making it even more forceful to move me to Kubo and Kubo doesn't have something as simple as customizing forms.

Hector Garcia: You know, I know this wasn't supposed to be a rant about QuickBooks desktop versus qbo, but it is part of the problem because you're increasing the prices of desktop because you want to encourage people. And I'm using encouraging air quotes. I meant a different word, but you're encouraging people to move to qbo. You have to listen [00:21:30] to the small business owners and their concerns about moving to Qbo feature wise. The concerns about, oh, I don't trust the cloud or whatever, that's a different group of people, and maybe you're okay leaving those behind. I mean, that's going to be a different generation per se, that is worried about moving things to the cloud, albeit it is a true concern, right? Ai, security, privacy all these things are real concerns. I totally get it. But Intuit invest quite a bit in security with [00:22:00] Qbo, and I've never heard of a data breach with Qbo, so it's not like Qbo has a history of data breaches where Google has, you know, YouTube has Facebook has like all the big tech companies, even banks have had data breaches. Qbo or Intuit has never had. And if they had, they've done a really good job at covering it up. But the real point here is that there isn't there shouldn't be a security concern. Moving to desktop to qbo. That's not the problem. The problem is feature parity. So I'll end [00:22:30] the rant. Rant there. Alicia, any thoughts on that?

Alicia Katz Pollock: Yeah. At scaling new heights. Joe Alioto and I just did. Anything cubed can do. Qbo can do better. Uh, face off. And there were a lot of things, especially around reporting like whip reporting where desktop still has a has better features. But the conclusion was pretty much really as industry specific that for [00:23:00] anybody who's not in construction and manufacturing, those are the two holdover industries. And as far as what Cuba brings to the table that desktop doesn't, QuickBooks online has so many automations, efficiencies and tools like the project center that desktop doesn't have that you know of. Everybody that I move over, everybody is delighted. So I think this is an idea that the time has come. Leave enterprise for [00:23:30] manufacturing, for construction, for those larger, more intricate, accrual based moving companies with multiple moving parts. But anybody who's just doing routine business qbo is the way to go. And if this is what it takes to move people over, then you know, I hate the idea of 50% price hikes. I think that's, you know, on paper it's appalling. But the idea [00:24:00] that Intuit has to divide all of its resources into supporting a dwindling product base means that it's going to be more expensive for their development to keep it up and just keeping it up and running, much less developing. Anything new. So surprised.

Hector Garcia: No no, no. And you know, when you look at it with it's potentially a word. Well, let's just let's make it a word when you look at it perceptually, okay. You know, from the perspective of percentages, [00:24:30] it does seem kind of crazy. But I still think QuickBooks Desktop Pro for a thousand bucks a year, it's It's worth it. I still strongly feel that it is like if you actually break down the feature set that it has and the fact that you can have unlimited companies on it, I still think it's a good deal. So yes, it's 50% price increase is ridiculous. And I'm doing that in air quotes because I've done 50% price increase to my clients on my services. So it's not it's [00:25:00] not like in a vacuum, it feels like a big number, like you said on paper. But the reality is QuickBooks desktop has been underpriced for a very long time. So like the outrage really comes from us having our a skewed perception of how much QuickBooks desktop should cost and and the cost to support QuickBooks desktop is going up and up and up and up like windows is releasing more versions of windows. They're adding AI into windows like QuickBooks. Intuit [00:25:30] has to add more security to their software. Um, the actual amount of people that know QuickBooks desktop well are disappearing, so it's harder to find talented people to support it.

Hector Garcia: You know, for Intuit, I assume that the desktop folks, the enterprise support folks, are probably the highest paid people in all in all of support land. So it just becoming more expensive to support. And I think as a as a business decision into it just wishes desktop didn't exist, which [00:26:00] is why. And this is interesting because if you go into like the social media channels, a lot of mostly the old school accountants and I'm an old school accountant, so I'm not calling anybody old, I'm just saying old school. Like I come from a, you know, I was raised in QuickBooks desktop. I fell in love with accounting because of QuickBooks desktop. The only reason I'm a CPA is because I loved QuickBooks desktop so much. If I was using some other, if I was using Qbo back then, I would not have become an accountant. Like basically the the prowess [00:26:30] and incredible feature set and opportunity to help people with QuickBooks desktop is what got me in this industry in the first place. And Alicia, I know that you feel the same even though you're a rockstar today and you're all 100%, but your roots are in desktop and you have more books written about desktop than online, right?

Alicia Katz Pollock: No. The opposite. I actually I have one QB desktop book and I just chopped the price in half from 97 down to 49 because literally nobody's buying [00:27:00] it because we're not getting any new desktop users. And my experience is actually the opposite of yours. I started I mean, QuickBooks desktop was where I started, but it was when Qbo came into its own that that's when I got jazzed. It was not from desktop, but from all the things that Qbo could do that my desktop software couldn't do. That's when it got my attention, and that's when I became an enthusiast. And so that's why [00:27:30] I'm a cheerleader for Qbo now more than desktop, because, you know, project center, the automations, the bank feeds, the things that it does that I'm no longer sitting there reconciling, spending hours trying to find the penny that my my reconciliation is off by. That was, you know, 1990s. I don't have to do that anymore because Qbo operates differently and solves that problem natively.

Hector Garcia: Interesting. We're here. We're sitting here, best friends, still getting to know each other. I [00:28:00] thought your roots were in desktop as well. But anyway, um, let's talk about QuickBooks Desktop Accountant Edition. So QuickBooks Desktop Accountant Edition prior to this price increase is $1,000 a year. So 9.99 and with this price increase starting in October, it will be $1,200 a year. Now, I don't know how many people are paying for QuickBooks Desktop Accountant. Most small business owners don't go out and buy the account. In addition, some have the ones that I suggested it because Accountant [00:28:30] Edition has a really cool batch enter feature and reclassify features are pretty neat, but most small business owners are not going to be dealing with that Accountants, however, that have purchased QuickBooks desktop on their own for their firms are now going to see $1,200 per one user. And I don't know what the multi user price is, but I'm going to assume that a five user desktop accountant is going to be somewhere in the $4,000 range. Now, what accountants really should be looking at [00:29:00] if they still support desktop is the ProAdvisor bundle.

Hector Garcia: The ProAdvisor bundle comes with QuickBooks Desktop Accountant and access to the QuickBooks desktop and QuickBooks Enterprise certifications. That allows you to have the batch that gives you training on QuickBooks desktop. And it's the exact same software as QuickBooks Desktop Accountant. But because it's bundled as a ProAdvisor, it has actually has a discount. So you get more and you pay less. So like no accountant should be paying for QuickBooks desktop [00:29:30] Accountant on their own by themselves, they should be looking at the ProAdvisor bundle. Now the ProAdvisor bundle with QuickBooks desktop is called. The Premier bundle is 7.99 a year. This is what we're paying now. Starting October 1st, it'll go up to $1,000 a year. So a lot of us proadvisors this is what we pay for our ProAdvisor desktop subscription and desktop software. Now that used to come with a mac as well. What I [00:30:00] don't know is that starting 2025, you know the 2025 edition, if Mac is going to come with it. So that's I don't know if they're even going to develop a 2025 edition of Mac.

Alicia Katz Pollock: The Mac version was in the enterprise bundle, not in the Premier bundle. They moved it over a couple of years ago.

Hector Garcia: Oh, okay. Yeah. Okay.

Alicia Katz Pollock: Is there a good point?

Hector Garcia: So in the end, the enterprise bundle has the Mac and used to have, I think POS as well, but now it's just QuickBooks desktop account. Good to know. And the ProAdvisor [00:30:30] enterprise bundle as you were mentioning that comes with both QuickBooks Desktop Accountant, QuickBooks Mac and QuickBooks Enterprise one user license that's going up from 12.99 a year, so $1,300 a year to $1,600 a year. So $1,600 a year. That's that's a big one. That's a big one for me. So the average accountant that was supporting enterprise had to pay $1,600 a year to have that. Now that's still a good [00:31:00] deal. Enterprise Mac and desktop accountant. You know, all three of those softwares for $1,600 a year is still a good deal when you look at it as a bundle. But if your clients disappear that you can support with it, you know, why would you need that?

Alicia Katz Pollock: Yeah, this may be the first year that I let my ProAdvisor desktop bundle go that at this point none of my clients are on it. If they are on it, I. I'm going in virtually. [00:31:30] The reasons why I did still need it were the conversions. But now that they have that online conversion tool, the only time that I need to need desktop is when is to make a QuickBooks for Mac file with inventory and convert it to QuickBooks desktop for inventory in order to do the upload. And so I may drop my ProAdvisor bundle this year.

Hector Garcia: Wow. That's big. It's big. Now [00:32:00] I feel the same as you, but I won't. I can't because, uh, sometimes we get files that are that we clean up in desktop first and then we convert after. We still have a very unique skill set with desktop cleanup. And, like most of us feel in our firm that cleaning on Desktop Accounting Edition is actually better and faster that with online. Now, if you take QuickBooks online and you take third party tools like SaaStr or Senate or [00:32:30] Keeper, maybe when you add those tools, there's actually more power on Qbo for cleanup. But we still find that for like the routine cleanup work. Uh, it's easier for us to clean it up in desktop first and then convert to to online. So we our firm might not cancel the subscription this year at least.

Alicia Katz Pollock: Maybe I'll have you add me as a seat to yours.

Hector Garcia: Yeah. Maybe we. Yeah.

Alicia Katz Pollock: You know what you were just saying, though, about cleaning up in desktop being easier. I don't know if it's just because [00:33:00] I can do qbo in my sleep, but I find it harder to clean up in desktop. And you know, we talked about it before that there's some things that's better, like inactivating, um, your, your lists. But um, so that's kind of got me curious, but we can talk about that at a different time.

Hector Garcia: The last piece here pertaining pricing is QuickBooks desktop. Enterprise always has price increases. Every year [00:33:30] you will see price increases. That's not new or surprise, but resellers. And this will affect us. Alicia, you and I are both resellers. Resellers used to be able to offer their clients 20% lifetime discount on their enterprise subscriptions for 1 to 10 seats, or 12.5. I don't know why that number, but it's always been like that. 12.5 for a 30 user license for lifetime discounts for [00:34:00] brand new enterprise, uh, subscriptions. Starting October 1st, new enterprise clients will no longer have any discounts. That means that enterprise goes officially to a flat MSRP price. That means there will be no discounts on enterprise. The enterprise is the price whether you buy it direct, whether you buy it through a reseller. It doesn't matter how you buy it. Quickbooks enterprise will have its own price. No first year discount, no flash sale. They're not saying that here, but [00:34:30] I think that's what they're implying. Okay. So um.

Alicia Katz Pollock: Basically even working through a reseller, there's no desktop discounts anymore.

Hector Garcia: There will be no discounts and there will be no advantage to go through a reseller versus a non reseller, which effectively also pushes the resellers out of their line of work. So yeah. Or let's just not say that it'll push traditional resellers that focus on desktop out of their line of work. So this will [00:35:00] push resellers who were the biggest arm selling arm of the enterprise world and the people that did implementation and consulting and all that stuff, and converted people from Sage to enterprise, from NetSuite to enterprise, from some of these bigger competitors to enterprise, effectively discouraging us from getting these sales. Because effectively, if I cannot give a discount versus people going buying directly through into it, what would I have to do as a reseller? I would have to add value in different [00:35:30] ways, which means I have to spend more time doing consulting in the sales process. It means I have to give away some of my time and my knowledge up front to try to get that deal. And even even then, you know, the client could always call one 800 QuickBooks on a Saturday at 9 p.m. and process the sale. So, yeah. Um, so it's it's kind of it's going to be very challenging for the enterprise focused resellers. And I used to be like that for a very long time. Not that I stopped being one, but I very much focused on [00:36:00] on Qbo now.

Hector Garcia: It's going to be hard for them. It's going to be hard for the people that we know. You know, our friends in the in the reseller world. So the last piece here is desktop payroll. Like desktop payroll is also getting a price increase. So if you add payroll to QuickBooks Pro or Premier, and if by the way, if you're in the enterprise world, you will never, quote, add payroll to enterprise. You would just upgrade to enterprise gold or platinum because that comes with payroll. But for Pro and Premier users that had [00:36:30] both a desktop subscription and a payroll subscription, the price for enhanced payroll, which is the one that most people had, is going from 550 annually or 55 monthly, plus $6 per employee to 700 annually or so, or $70 monthly, plus $7 per employee. So it's going up approximately or not approximately exactly, uh, $150 a year [00:37:00] for payroll and $1 per employee for the per month fee. So everything is going up in price. Qbo QuickBooks desktop, desktop payroll everything's going up in price. The article also talks about other versions of QuickBooks Desktop Payroll, like the Basic edition and the legacy editions. Most people are not on those, so I won't even bother with that. I will refer to the article. We'll put that in the notes. So thoughts on that, Alicia?

Alicia Katz Pollock: I mean, we've we've known that they're [00:37:30] really trying to this is just more moving people towards the, uh, the online version. And I know that that desktop payroll still does some things that that online payroll doesn't do, but they're really hopefully taking this extra money that it takes to support it and continuing to develop Qbo payroll so that it has feature parity.

Hector Garcia: Now, if you really want your mind to be blown a price increase wise, there's a product called [00:38:00] Enhanced Payroll for accountants. And essentially this is a product where you can add payroll to your QuickBooks desktop subscription or to your ProAdvisor subscription. That gives you up to 50 lines you can manage using after the fact payroll. Last year that went up to 4400 annually. I think it was. It used to be 700 annually. It went up to 1400. So it doubled last year. It doubled from 700 to 1400, and this year is doubling from 1400 [00:38:30] to 2800 and doubling. So if you are, yes, huge. So if you're currently on enhanced payroll for accountants, you're going to pay $2,800 a year for that, plus $5 per paycheck if it's through direct deposit. Um, so the per the per, there's no per employee fee. It's just per paycheck if you do, uh, direct deposit. Now, this has always had a 50% discount if you have a ProAdvisor desktop bundle. [00:39:00] So if you are if you have a so basically let's say for example, you have ProAdvisor, uh, Premier bundle, which is now $1,000 a year. You can if you already have, uh, payroll, that's going up to $2,800 a year, -50%. That's still $1,300 a year. So you're going to pay 1000 plus 1400, so you're going to pay basically $2,400 to have a desktop accountant and enhanced payroll [00:39:30] for accountants. If you do that, that's going to be your minimum entry fee.

Alicia Katz Pollock: But that's that's the one where you're managing payroll for all your clients.

Hector Garcia: Correct? That is for after the fact payroll. So your clients write paychecks by hand and you go into the system and you add the payroll. This is not for you to add payroll into your clients files. So they can run payroll. So you can run payroll for them. Got it. So they'll they'll send you the timesheets or they'll send you the checks that they wrote. And then you go in the system and you put it I mean, I honestly [00:40:00] that's a really bad business to be in anyway. It's very labor intensive. I know some of you work. Yeah, I know some some of our listeners probably have have built really good businesses around this, but I think it's just too labor intensive and I prefer to just pun off the paycheck creation process back to my client. I don't know why small business owners completely outsource even generating paychecks, right? Yeah, payroll is so easy.

Alicia Katz Pollock: I almost think that it's kind [00:40:30] of like a legacy concept that, you know, 20 years ago, you had to outsource it to somebody who knew how to use it and knew how to use the software. So I kind of think like, this is kind of like old school payroll workflows that even whether it's desktop or online, they've totally smoothed out and streamlined the process. So, you know, I'm sure that there's a use case for needing those particular, um, solutions, but they're pretty rare. And so it's not a surprise to me that they're doubling it, because [00:41:00] it probably takes a lot of resources to support, again, a dwindling number of users.

Hector Garcia: And here's an odd little price increase. Factoid um, for QuickBooks desktop users using payments, this is, you know, to process credit cards via QuickBooks desktop. So you can send an invoice and people can pay you, and the payment goes through Intuit merchant or QuickBooks merchant, whatever. For existing clients, they're already paying $3 per ACH, so existing clients pay $3 per ACH [00:41:30] in the Qbo world, this is capped at $10, it's 1% capped at $10. Existing clients and the QuickBooks desktop world is just a flat $3 per ACH for existing clients. That is now going to 1% and a cap of 15 existing clients. So if you're an existing desktop clients with QuickBooks, uh, payments attached to it, you're no longer going to pay a flat fee of $3 per every invoice paid via ACH. You're now going [00:42:00] to pay 1% up to $15 per transaction. So it's a $15 cap on that.

Alicia Katz Pollock: Well, for small billings, this is good news for large billings. It's definitely more expensive.

Hector Garcia: So really small billings of under you would say small billings under $200. Right on under $300.

Alicia Katz Pollock: Yeah. Wherever the the three, the $3 becomes the percentage.

Hector Garcia: Yeah. So $300. Yeah. So an invoice of $300 would be a $3 [00:42:30] fee, an ACH, an invoice paid via ACH, not credit card of $300 would be $3. So anything under that is kind of good news. Is a reduction in price anything over that is I mean from $3 to $15 is a huge. But that's probably the biggest if you actually think about it, that's the biggest price increase overall to go from 3 to 15. It's a huge price increase. But the worst news of this all, and this is also true in the Qbo world, is brand new QuickBooks [00:43:00] desktop payment customers, new accounts created after October 1st okay will pay 1% flat fee. No cap on ACH payments. 1% flat fee. No cap on ACH payments.

Alicia Katz Pollock: I have clients who are running $50,000 and $100,000 payments. That's a lot of fees.

Hector Garcia: That's a lot of fees that's gonna drive people to using third party apps to like, mail you or [00:43:30] whatever to to to do billing. Uh, it's going to drive people to, um, to encourage wire transfers. It's going to drive people to encourage payments via Zelle or whatever. So this is not a net good move in my opinion. I don't think anybody else out there charges for ACH a percentage of the transaction. I don't understand where this is coming from. And and this is true in Qbo also, by the way, I don't know if you know this, but the new Cuba payments accounts that do not get sold [00:44:00] through A ProAdvisor or I think I'll throw a reseller, sorry that then I get sold to a reseller will pay a 1% flat fee on all accounts. There's no cap. All the accounts were capped at 10 or 15 bucks, but new accounts? No cap. Right?

Alicia Katz Pollock: Well, it's still a third of the price of processing credit cards, so there's still that.

Hector Garcia: But but this is the thing. This is the thing people like paying with credit cards, especially in the corporate world, because they get their points. Right? [00:44:30] Right. And that's really where the cost of this whole thing comes in is the point of the rewards. Plus the, you know, the banking interchange rate and the risk involved with taking credit card payments. But ACH, the risk is much lower. I mean, that's why Traditionally, there's never been a percentage attached to an ACH. Payment. So yeah, I understand the silver lining. Hey, it's a third of of credit card payments, so I'll take that over that. But once people once people start seeing that the $10,000 invoice or whatever [00:45:00] has $100 fee, they're going to say, oh, no, screw it, pay me with Zelle, pay me with Venmo, pay me with, you know, whatever. Like I think people are gonna look at alternatives and it will drive people away from QuickBooks payments, which as an accountant, I don't want I don't want to reconcile third party system. I want it all built in. So this one I'm particularly bummed out about. Agreed. So, um, that being said, what are your general thoughts about price increases? Is [00:45:30] this is this like a normal thing? Would you just get used to with? Yeah.

Alicia Katz Pollock: So so I have I have two thoughts and let let's we could rant about this for hours. Let's see if we can keep it down to minutes. But my two thoughts are this. The first thing that I heard from the peanut gallery on socials is they already did it this year. How come they're raising prices more than once a year? And I actually took the time to go back and look at my history of price increases. And for the last ten years they have all been September and October. So [00:46:00] the fact that it's going back one month to August is, yeah, okay, 11 months instead of 12 months, but it's not like they're doing it every six months. Hopefully this just means the cadence has changed and they're not going to do it every 11 months and make it tighter. So they're getting an extra month of revenue. And like I said, for people on my wholesale, I'm not going to see those price increases probably until October. So, you know, all I can do right now is just send out the emails and let people [00:46:30] know and then remind them and then make the change. But at, you know, for most of my clients, it's we're looking at a $5 increase. So it's not not that painful.

Hector Garcia: To clarify every summer the price increase announcements come out. Around September October. They start kicking in for the promotion of pricing. As we discussed earlier, sometimes it doesn't kick in until later, so maybe people perceive they already did it this year because [00:47:00] maybe they just saw a price increase for one of the clients that just kicked in three months ago, and then it feels like they're doing it again. But just understand that, like these prices are announced first, then they kick in and then there's exceptions. So this is why there might be the perception that they do it more than once a year. Right. So yeah. So you're right. It's really been mostly once a year. The thing is Alicia is pre pandemic. And I think I look at world history in two [00:47:30] ways pre pandemic and post pandemic Pre-pandemic, the price increases maybe felt less aggressive. It just felt, you know, there were there were smaller, potentially. Remember, I just made up the word there were there were there were smaller potentially. Um, and it didn't fit. They didn't feel as impactful. Um, and they didn't have the effect where they were trying to like aggressively to get rid of desktop.

Hector Garcia: And then the desktop price increases are like really sort of outrageous. They feel potentially [00:48:00] as well. Um, so of course the post-pandemic everything feels a lot, a lot more aggressive, plus just general inflation all around us. It's just it also affects us. So so just price increases in general are a very sensitive topic. Plus we have brought a lot more QuickBooks online clients into our firms versus before. So we're getting more used to paying for QuickBooks ourselves versus [00:48:30] before, where everybody had their own license. Um, you're also getting used to paying monthly fees where we used to pay maybe three, you know, every three years we used to pay a renewal. So it just feels like time has compressed in the past five years. And and into it adjusting prices, which is something they need to do business wise. It just feels like a lot of punches and then like and then most of us sort of react that way and we don't take our time to like, actually, let's go back and look at how it has [00:49:00] been because it feels like it's every three months they do a price increase, but it really isn't right.

Alicia Katz Pollock: Yeah. And the vast majority of my clients are only seeing $5 increases. And since I give 10% discounts, they're only seeing a change of like $4 roughly. And so they're, um, you know, but I don't I know that my experience isn't the same as everybody's because all of our listeners have different things that they're doing within QuickBooks.

Hector Garcia: Um, so [00:49:30] I just want to say, yeah, I hate the price increase, but I also hate the price increase on everything. I don't like to pay more for anything. Um, it's a fact of life. Every year, you know, you need to prepare for any of your providers, anything to at least go up once a year. That's that's the new. That's the new normal.

Alicia Katz Pollock: Basically all all of my software subscriptions are going up. It's not like Intuit is doing something unusual. Every single, every thing that I subscribe [00:50:00] to gets more expensive every year. And that's just life and global economics. So the other thing that I want to just bring up real briefly is with the pricing on QuickBooks Online Plus, going up to $99. I personally wish that that one version wasn't as expensive as it was, because it's still the most popular and the most needed version. And I work with Micro-businesses, I work with mom and pop shops [00:50:30] that are, like, already on the edge of not being able to afford bookkeeping services, much less $100 a month for their software. And so I wish that it was still $80 like, to me, that felt like the right price. And so that's for me, is like the one little part where I wish it was different.

Hector Garcia: And I think accountants particularly need to still remember QuickBooks Online accountant for your firm is still free. Free [00:51:00] QuickBooks payroll for your firm is still free. Quickbooks Bill Pay elite is still free. Uh, all bunch of CPAs and education that Qbo gives you. It's still free. And Intuit connect if you if you have the privilege to go, it's a $3,000 conference, you know, priced at a third of the price. Um, so, you know, Intuit still is investing in subsidizing a lot [00:51:30] of resources for accounting professionals. So you kind of have to look at it balanced. You know, this is why I still own Intuit stock. I don't work for Intuit. I'm not being paid to say this because I still think that as a business, the future is bright. Yes, I wish that the price increases weren't as aggressive. Yes, I feel for some of my clients that are going from desktop, you know, to 50% price increase being forced to move online, possibly. [00:52:00] You know, they feel like that. I do feel for them. But the reality is, you know, Intuit is a business like like all of us. And we need to learn from that as well. Like we it when we need to change the price, we got to change the price and we got to figure out how to communicate it and move on. Yeah, nobody's putting a gun to anybody's head if you want to go to zero or whatever, go like stop complaining about it. Just go like, do it. Like speak with your wallet, okay? Like just ranting off about pricing and [00:52:30] not doing something about it is being part of the problem if you perceive it to be a problem, if you if you accept it and then communicate with your client and figure out how to make it part of your business and part of your annual conversation. Just like we remind people that April 15th is a deadline, remind people that there will be a price increase. Like it just needs to be part of the conversation. I that's I'll leave it at that.

Alicia Katz Pollock: I think that's really great because if to to frame it that way, because if you're proactive, if you know [00:53:00] that it's going to go up every year, I mean, nobody should be taken by surprise by, by those increases.

Hector Garcia: Yeah. So with that being said, so what's going on in your world?

Alicia Katz Pollock: Well, it's completely timely with what the The Wheel of Rants gave us. I have been working on a new book called The Comprehensive Guide to Converting from QuickBooks desktop to QuickBooks online, and it's based on that five page outline that you and I went over and made four episodes out of. It was [00:53:30] supposed to be one episode, but we kept going and kept going. Well, the same thing happened to me this weekend. I was framing out a new course that's supposed to be a one hour course, and I just started writing all of it, and it turned into a 60 page document, and I was like, okay, let's publish it. So I am all of a sudden working on another unexpected book that will be out on Amazon, hopefully in the first days of July. So we will as soon as the book exists. And I have a link for it. We will add it to the show notes for this. [00:54:00] And so if you are one of those people who is severely impacted by all of these price changes on desktop and you're like, okay, you know, they've been telling me we need to switch, it's time. I'm going to have a book that's going to really explain all the ins and outs and opportunities available, from switching from desktop to online.

Hector Garcia: It makes total sense. Extremely timely. Alicia. I love it. Uh, 2024 and 2025 will be the years where we would see probably the most [00:54:30] amount of QuickBooks desktop to QuickBooks online conversions. And, you know, we really appreciate having a great resource out there. We'll put links to all that stuff in the show notes.

Alicia Katz Pollock: Yeah. And so, you know, in that context, I want all of you to know that if you are moving from desktop to online, one of the best things you can do to be proactive about having your clients have a great experience during the conversion is training. And so Hector's got the the number one YouTube channel for QuickBooks online training [00:55:00] at Royal Wise. Com I have a comprehensive QuickBooks online training program that is designed for people moving from desktop to online, whether they're the business owners or the bookkeepers. And so Hector and I are here to support you in this time of migration, because this year is going to be the big year for it.

Hector Garcia: I agree. So thank you very much, everybody, for listening to the unofficial QuickBooks accountants podcast. Thank you, Alicia, for all the resources, and we'll see you [00:55:30] in the next one.

Alicia Katz Pollock: See you in the next one.