Here’s why QuickBooks is so expensive:
QuickBooks is professional software that is regularly updated, upgraded, and professionally maintained.
Producing and maintaining the software requires a lot of time and money from the developers, and they pass those costs on to consumers.
Additionally, there are a lot of different versions at different price points.
So if you want to learn all about QuickBooks and why it costs so much, then this article is for you.
Let’s jump right into it!
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What Is QuickBooks?
Let’s take a moment to make sure everyone is on the same page.
QuickBooks is accounting software.
It’s designed to help small and medium businesses manage their books and finances.
It helps automate these jobs, and without any expertise in accounting or bookkeeping, many small business managers can get along just fine by using QuickBooks or comparable software.
I’ll cover a lot more points, but this is a good place to cover the primary answer to the original question.
QuickBooks is expensive because it is professionally developed and maintained software that is licensed for a profit.
The company has to charge users money for their business model, so that’s why the prices are the way they are.
Still, there are a ton of factors that go into QuickBooks and pricing strategies, so let’s keep digging.
What Are the Different Types of Quickbooks? (2 Versions)
If we’re going to talk about why QuickBooks is expensive, the conversation has to cover the many different types of QuickBooks.
It’s a major part of the equation.
There are two versions of QuickBooks:
- QuickBooks Desktop
- QuickBooks Online
Among those two categories, there are a number of different price points, each offering its own list of features and benefits.
I’m going to take you through all of it.
You’ll see the pricing for every possibility, and when you compare prices to features, it will give you an idea as to how QuickBooks values features and chooses pricing.
#1 Quickbooks Desktop
Quickbooks Desktop is about providing software that you can download onto a computer and use offline.
It has online features too, but the idea is that you don’t have to work exclusively with a cloud account.
There are three versions available:
- Pro Plus 2022: $349.99/year
- Premier Plus 2022: $549.99/year
- Enterprise 22.0: $1,072/year
Each subsequent version of Quickbooks Desktop has more features and available users packed into it, which is primarily why the price goes up.
There are tons of features that include end-to-end sales order fulfillment, reports and highlights, customer tracking (up to 1 million customers with the enterprise version), and so much more.
#2 QuickBooks Online
Quickbooks Online takes a different approach.
With this version, you do not download or install the software.
Instead, you access it through an internet connection with your account.
One of the main features that improve with different pay tiers is that you get more users on your account.
Here are the online tiers:
- Simple Start: $25/month
- Essentials: $50/month
- Plus: $80/month
- Advanced: $180/month
- Self-Employed: $15/month
The simplest plan only has one user on the account.
The most robust allows for 25 unique users.
The features also vary by subscription, meaning you get more features and tools if you pay more.
So, Why Is QuickBooks So Expensive? (3 Things)
Now, we can dig deeper into why QuickBooks costs as much as it does.
You can already see that with so many different pricing tiers, there isn’t a simple, solitary answer.
In fact, some would argue that different options aren’t even expensive.
It’s all pretty relative.
But, for the sake of discussion, let’s assume that every single option is expensive.
What’s going on?
There are three things that go into the pricing of QuickBooks.
Those are overhead, development costs, and market conditions.
Let’s start with overhead.
It’s pretty easy to summarize.
QuickBooks is a big organization.
More specifically, QuickBooks is a product created and managed by Intuit Inc.
Intuit is publicly traded, and it has a market cap of $101.7 Billion.
This is not a small business, and QuickBooks is not a small product.
So, as you can imagine, Intuit is spending very large sums of money just to keep the lights on and QuickBooks running.
There are labor costs, property costs, utility costs, and more.
On top of that, in order to run such a massive online service, Intuit has to maintain powerful server farms.
Those are not cheap either.
In all, millions and millions of dollars are spent every year to keep QuickBooks running.
So, Intuit gauges how many people purchase a license, and they base the pricing on that.
QuickBooks has to earn enough money to cover the overhead, which definitely drives up the price.
#2 Development Costs
The problem with the outlook above is that it only covers maintaining the software.
The software also has to be developed, and that requires even more money from Intuit.
So, Intuit also pays attention to how much they pay the software engineers and developers to make and test QuickBooks.
That price is added to the overhead cost, and it pushes up the price of an individual license yet again.
Remember, if QuickBooks doesn’t cost enough money, Intuit spends more than they make off of it, and the company goes away.
There has to be a non-zero profit margin just to stay in business.
#3 Market Conditions
Things are complicated enough, but we still haven’t reached the end of the story.
The overhead and development costs tell Intuit how much it has to charge to turn a profit.
That’s not the same thing as how much the company should charge for the software.
The answer to that question is found in market analysis.
Let’s skip the graduate course in economics and instead stick with a simple answer.
As a for-profit company, Intuit is going to charge as much for QuickBooks as it thinks people are willing to pay.
It’s a pretty standard business model, and Intuit clearly follows it.
One of the reasons there are so many different pricing tiers and options is that it allows Intuit to gather market data on what people want and how much they will spend.
If one of the priciest tiers is the most popular, then they can probably raise prices across the board.
If the budget options are the most popular, then they might need to cut prices.
Intuit, like any company, will constantly review data to subtly adjust prices in an attempt to maximize profits.
The culmination of these three ideas is why QuickBooks is so expensive.