It’s a grim statistic: about half of small businesses fail within five years. The main reason is the challenge with cash flows.
But technologies like AI (Artificial Intelligence) can be a big help. They may even transform the business.
Yet there are enormous hurdles as small businesses do not have the resources–in terms of access to Big Data and technical expertise–to leverage AI. Instead, the technology has been mostly for larger businesses.
But Intuit wants to change this. Consider that the company has been investing heavily in AI and infusing the technology in its QuickBooks platform. In 2019, there has been a 60% increase in the number of employees working on AI, with 104 machine learning models in production and 447 patents filed in the field. Another critical advantage for Intuit is its massive trove of data, which is based on over seven million business users. This means that Intuit can analyze 68 million paychecks sent through payroll, 400 million invoices and $55 billion in online payments (there are over 26 billion touch points).
Here are some of the ways that AI is powering QuickBooks:
- Cash Flow Planner: With AI, this system can predict daily cash flow needs for the next 90 days. This can be crucial as a business owner will be in a better position to take actions to avoid major problems. The Cash Flow Planner also provides recommendations, such as for sending out invoice reminders and getting a loan.
- QuickBooks Capital: Unless your company has a couple years of history, a bank will likely not extend a loan. This is due to an inherent conservatism but also a backward-looking approach to scoring risk. But with AI, you can use forward-looking approaches. And yes, this is what QuickBooks Capital does. The result is that there is a much higher loan approval rate and lower costs.
- Mileage Tracking: This is now standard with QuickBooks. The app leverages a smartphone’s GPS to determine the extent of business travel (the average tax savings are over $7,000 per year). The AI system also helps better separate what is a business expense and recognizes common trips.
- Receipt Capture: The app uses AI to streamline the scanning of receipts, which can then extract and categorize important information that is input into QuickBooks. About 43% of the scans are processed within four seconds. Oh, and then there is the Expense Finder that uses AI to find those expenses that are tax deductible.
- Compliance: The flood of rules and regulations is tough to keep up with. Yet just one violation can wreak havoc on a small business. This is why QuickBooks is starting to use AI to detect potential issues, say with HR and taxes.
All this is not to imply that AI will solve all problems. The fact is that the technology is far from perfect. In other words, customers still want to talk to experts–which is especially the case with financial matters. This is why Intuit has launched QuickBooks Live Bookkeeping, which connects business owners with qualified bookkeepers (there is a monthly subscription fee). Note that about 40% of users of QuickBooks do not have an accountant.
But this new service is more than just about making a connection. An accountant can use video and chat to work with clients, providing a much more engaging experience.
“The vision for QuickBooks is to build an expert-driven, AI platform to make better decisions and improve outcomes,” said Alex Chriss, who is the Executive Vice President and General Manager of the Small Business Self-Employed Group at Intuit. “It’s all about leveling the playing field for small businesses.”