The head of accounting for global accounting software giant Intuit has thrown down the gauntlet to local leaders MYOB and Xero, saying it will win market share from the major players and emerge to be the dominant force in the region.
"We have internal projections where we think we'll be at the same level of market share as Xero in the next few years," Intuit global head of accounting Richard Preece told The Australian Financial Review.
"Those companies had a significant head start in terms of time in the market... so we have to have the best product to drive market share. We believe the biggest opportunity is that the majority of SMBs still haven't made a cloud-based decision and have been using excel. They're our primary objective."
Mr Preece is in the country for Intuit's first QuickBooks Connect event in Sydney on Thursday.
Intuit is also considering launching its QuickBooks Financing small business loans service to Australian SMBs in the next 12 to 24 months, following its successful growth in the US in the past three years. In the past 12 months Intuit has also started providing business loans through the platform, as well as connecting customers to financial institutions and scoring them lower interest rates using a 30 data point risk calculating algorithm.
Since launching in Australia in 2013, the company had grown to more than 53,000 customers by October 2016. It has also boosted its on-the-ground presence to more than 100 staff and its local headcount is set to increase more this year.
Fastest growing region
Australia is the fastest growing region worldwide for QuickBooks, but it still has a long way to go to chase down Xero, which has 446,000 paying subscribers in Australia, and MYOB, which has 585,000 paying small and medium sized business customers, although only 249,000 of these are using MYOB's cloud product, according to its 2016 full-year results. MYOB's total customer number is even greater when factoring in its smaller Enterprise Solutions division.
Intuit is also in competition with Xero in the US, but Mr Preece said the New Zealand headquartered business had struggled to take off in the North American market.
"We are fortunate that we are the incumbent in the US, so we have the head start and we see that as a benefit, but we also have to have a great product," Mr Preece said.
"We watch Xero's numbers in the US as much as everyone else does. I've been a bit surprised that the growth hasn't quite been there... They don't report purely on the US either, they report on North America which includes Canada, which is probably because the numbers are a bit disappointing."
In Xero's recent full-year results to March 31 it revealed its US subscriber numbers had jumped to 92,000.
Like Xero and MYOB, Intuit is also investing in machine learning as more and more compliance processes in accounting firms are set to be automated.
Changing industry
Mr Preece said he predicted a third of accountants would struggle to make a living within the next five to six years, unless they properly embraced the changing nature of the industry.
"Bookkeepers will become more like cloud [business] advisors," he said. "But I've heard some accountants say 'if it's not broke, don't fix it', so there are still some that don't believe they have to change with the world."
Mr Preece believed the big four accounting firms were leading the pack when it came to adoption of new technologies and had strong tech teams developing new products. But he said their big challenge would come from needing to provide lower cost services, as small businesses would refuse to keep paying thousands of dollars a year.
In addition to expanding its QuickBooks Financing service in the next year or two, the company is also investing in new products around payments technology, payroll and tax.
"We're looking at what a global payroll platform would look like," he said. "Then with tax, it's an essential part of the ecosystem for accountants... so we're looking at how to have best-in-class online tax offerings embedded into QuickBooks Online, like it is with QuickBooks Online Accountant."
