QuickBooks Karma? Financing Your Estimates

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

Hector Garcia: 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. In.

Alicia Katz Pollock: This episode of the unofficial QuickBooks accountants podcast, we're going [00:00:30] to take a look at a post that Dina Martin made in Hector's Facebook forum that has our wheels spinning that we're really interested in exploring. So, Hector, we are going to be talking about Credit Karma inside Qbo today.

Hector Garcia: Hmm. It's very interesting. So I wanted to point out that there's going to be a whole bunch of conjecture stemming from a screenshot that came from a real user, a real person that we know, a [00:01:00] respectful person, a part of the community that observed some some things in QuickBooks that seemed kind of new. And she took screenshots of the QuickBooks side. She took screenshots of the customer side. And then we're going to sort of describe to you this will be like an immersive audiobook experience of the post that you could have seen in the Facebook group. But quick background, if you're not part of the Facebook groups where accounting professionals are posting these sort of things every [00:01:30] day, I'm going to strongly recommend that you check them out. Okay. Alicia has a Facebook group. I think it's called, uh, Alicia, what's the name of it?

Alicia Katz Pollock: Mine is training for QuickBooks users.

Hector Garcia: So training for QuickBooks users and the Facebook group that I run together with Michelle Long and Dan DeLong is a QB power users. And essentially anytime something looks strange, looks looks new, something's not working. A user will go in there and say, here's a screenshot. I've never seen that before. Have you seen it before? Does this work? Is this real? Give me some insight. [00:02:00] And the cool thing about this is Alicia and I went to do some research in the QuickBooks website and into a website, and we can't find like an article or a product landing page that specifically explains what this offer is. So we have to go by 100% the screenshots that real accountants and real customers are seeing on the field. And we can suspect that maybe there's some sort of beta testing or a B testing where there [00:02:30] could be a limited amount of users that have access to this thing. We're going to call this customer financing. And we have we're going to give it we're going to make up a name for this okay. Customer financing. And this is different than factoring. So I wanted to give you just a quick uh, differentiation. So if you are a business owner and you send a customer an invoice and you need that money ASAP, but your customer is going to pay you in 30 days, 60 days, 90 days. This happens a lot when you sell to big boxes like Walmart [00:03:00] and that sort of thing where, you know, they give you, uh, terms that are very good for them. They have 90 days to pay you, but you have to go out there and procure the items or the inventory or whatever, sort of immediately.

Hector Garcia: So one of the financing choices that you have is called factoring, where you have a financing company or a bank give you a loan on maybe 90% of that invoice. And then when the customer pays you, they grab that payment like it doesn't even hit [00:03:30] your bank. They grab the payment, and then they calculate how long the customer took to pay you. And based on that, you pay an interest. That's called factoring. That's vendor side invoice financing. You are getting an advance on an invoice that you issued to a reputable customer. The bank thinks, or based on the reputation of that customer, that they will pay you back. So they'll give you a loan for 30 days, 60 days, 90 days. That's called factoring. This is a different thing. What this is, is [00:04:00] you as the QuickBooks user, you send your customer and what it seems like this derived from an estimate, which is really interesting. Not from an invoice, from an estimate. And the customer didn't just receive an estimate, they also received a payment plan, a potential payment plan for that estimate. And in the bottom it says powered by Intuit Credit Karma. So this QuickBooks user sent an estimate to a customer for, let's say, $10,000. And then under it it says. Or [00:04:30] you could pay this at 311 per month, or $312 per month for 36 months. And then there's a whole bunch of other details. Alicia, maybe you want to go through all the details for us.

Alicia Katz Pollock: Sure. So if you are interested in actually seeing the post that we're looking at, it was posted on August 1st in Hector's group. She did give us the group name again.

Hector Garcia: Qb power users.

Alicia Katz Pollock: Qb power users and the post was from Dena Martin. Hi Dena, thank you for posting this. So basically the story is [00:05:00] that her customer was sending it in estimate as normal. And from the their side it looked like it would be, you know, the normal form that you receive. But when the customer received it it says total estimate 9868 50 or starting at $311 a month with 36 month financing. And at the bottom, it's there's an option to either review and accept or explore financing options powered by Intuit Credit Karma. So [00:05:30] this is the first time that we have seen two different branches of Intuit come together inside the product. Actually, now I take it back. It's not the first time because I have also seen offers for consumer loans happening through qbo or not consumer loans, sorry, business loans happening through Qbo in the financing sections. And so you might have seen those as well. And in some ways this makes sense because Intuit [00:06:00] can see your credit worthiness right from inside your data. You know, if they're ever doing anything with the data, that's always an anonymized I always get this word wrong. Anonymized and anonymized. It's anonymous, but they can see to the individual what's actually happening in the company. So Credit Karma apparently has found the customer credit worthy and is offering them a loan. So what it says here is that the amount [00:06:30] of the loan is the amount of the estimate. Then they give a payment estimate ranging from 312 a month to $452 a month over three years, and the Apr with autopay ranges, and get this from 8.49%, which is, you know, I think a slightly high but not so bad to 35.99%. So 36% interest on this. Worse than that.

Hector Garcia: Worse than a credit card?

Alicia Katz Pollock: Yeah. [00:07:00] No way worse than my credit card. My credit card has high interest, so I'm going to run down into the fine print down at the bottom. Now, I don't know how well it's going to translate if I read the whole thing, but the company is upgrade is the financing company. The Apr varies and I'm sure that varies according to. Once you actually say yes, I want this loan. And then when they [00:07:30] look at your credit worthiness and decide what your terms are going to be. So it could be anywhere in that range. Uh, there's an origination fee of 1.85% to 9.99%, so they could take somewhere between, you know, a little under 2%, up to 10% of the loan and add it on top, which is then says deducted from the loan proceeds so they won't give you that part. The lowest rates require autopay and paying [00:08:00] off a portion of existing debt directly. Do you think that means a down payment? Hector?

Hector Garcia: Um, I yeah, I would say that it wouldn't be, like 100% financed, maybe like 80% of it or something like that. That's. I'm gonna make the assumption that one the origination fee you have to pay cash. Um, and two, there would be some sort of, um, uh, some sort of, uh, down payment that you have to make on that invoice.

Alicia Katz Pollock: I think that sounds right, too. Okay. Loans feature repayment [00:08:30] terms of 24 to 84 months. So it might not even be three months. It could be longer. For example, if you receive a $10,000 loan with a 36 month term and a 17.59% Apr, which includes a 13.94% yearly interest rate and a 5% one time origination fee. So they added the okay, never mind, you would receive 9500 in your account and would have a required monthly payment of 341 [00:09:00] over the life of the loan. Your payments would total 12,293 46. So they're telling you what the full amount of the loan with interest would be, which is nice.

Hector Garcia: Now this is in the for example, this is not specifically just just to be clear, Alicia is reading the fine print at the bottom that kind of states illustrates what this could look like at this interest rate, at this amount with this would be the total payments. This is this is an open offer. [00:09:30] You still have to I assume you have to go apply for credit, get a credit check. And then based on that they'll they'll figure out what terms to give you. What she's reading is a little fine print at the bottom that says, for example, it might look like this. So let's just be very clear about that.

Alicia Katz Pollock: Yes, yes. So it does have to go through underwriting. So your results are going to vary. But at least I like that. They're outlining all the terms and they're even telling you what the whole grand total is going to be. All right. So it continues. The Apr on your loan may be higher [00:10:00] or lower. And your loan offers may not have multiple term lengths available. Actual rate depends on your credit score, credit usage history, loan term, and other factors. Late payments or subsequent charges and fees may increase the cost of your fixed rate loan. There is no fee or penalty for repaying a loan early, so that was the first part. The next codicil says approval not guaranteed. Your loan terms will be determined based on your credit income and certain other information [00:10:30] provided in your loan application. Not all applicants will qualify for the full amount, so you might apply and they might say, yeah, we'll give you 5000. Okay. Then uh, loan services are offered through Credit Karma Offers incorporated Credit Karma, and then it gives their license, um, California loans arranged pursuant to a California financing Law license. Okay. So then it talks a little bit about upgrade, which is the financing company upgrade is a financial technology [00:11:00] company, not a bank. Personal loans are issued by upgrades bank partners. Information on upgrades. Bank partners can be found at. And then they give a link there. That's just you know that's fintech. That's kind of common at this point. Every fintech bank actually has a big bank behind it. Um, and then it says if you receive an email that seems fraudulent, please check with the business owner before paying. So all of that was the fine print on the estimate that was received by the customer.

Hector Garcia: Now there's a big button [00:11:30] that says review and accept, and that's the same button that you get when you just get an estimate and you're just accepting the estimate. Um, so it's not very clear if you are reviewing and accepting a credit application like I'm reviewing and accepting the fact that I want to pay this invoice or this estimate in parts, or if I'm just reviewing and accepting the estimate by itself. So it's not clear to me if that's a completely separate page, or if it's all built into the same review and accept page that [00:12:00] you get from an estimate.

Alicia Katz Pollock: So the way that I'm looking at it, the pay monthly with a low fixed rate where they lay out the financing options, has a green bar above the review and accept button. So that's, you know, marketing placement because they want to encourage you to take out the loan. But it is not clear that the review and accept button really is the estimate itself, not the financing. So you know, normally it should have been switched like here let me review and accept the estimate. [00:12:30] But then of course Intuit knows that nobody's going to read all the financing stuff down below as their option, so that's why they placed it there to make it like blatantly obvious. But hopefully it's not confusing. That review and accept is the estimate, not the you.

Hector Garcia: Know, I would give into it the benefit of the doubt if they didn't have a history of strategic button placement and strategic opt in and opt out. Um, a couple of months ago, but maybe a year ago, there was a huge debacle, [00:13:00] in my opinion, which is a lot of people applying for QuickBooks payments, you know, to accept credit card payments, uh, in their invoices, the way that they they designed the page and the buttons, they were also accepting QuickBooks checking and a lot of people were automatically being opted in into a QuickBooks checking account. The payments that were coming in through invoice payments, through QuickBooks, payments that were going into the QuickBooks payments business owners didn't know that they had accepted this, and they were freaking [00:13:30] out that their money was gone. And you go into Reddit, you go into social media and people are saying, QuickBooks stole my money. But really they didn't steal it. It's sitting in a QuickBooks checking account. But why weren't people clearly knowing and understanding that there was a QuickBooks checking account is because the way they place these review and accept and forward and next buttons. And so if Intuit didn't have a history of this, I would say, oh yeah, you know what? You know, they are going to make it very clear to the user that they're simply just accepting the estimate and not accepting [00:14:00] or going to the next step to apply for a loan.

Hector Garcia: It's not going to be like automatically people are going to get a loan. Loan applications are complex, like you have to input your Social Security number like it won't. It would be a lot more obvious to the user that they are doing a credit application versus the QuickBooks checking thing that I was mentioning, but then again, you know, like Intuit needs to be very, very careful not to be seen as a company that's through the design of the acceptance process and the workflow of the screens that they're trying to lead people into getting [00:14:30] a product that they didn't want in the first place. So again, like, like no one's going to be caught by surprise with a random loan. But because of that history, I my suggestion to Intuit is just just be very, very clear so the user understands, you know, what they're doing. Yeah.

Alicia Katz Pollock: Now that was really unfortunate that when they did that with QuickBooks checking and QuickBooks payments, because they instantly gave QuickBooks checking a bad rap because people didn't realize they were signing up for an actual checking account, and then their funds got diverted [00:15:00] there. I love QuickBooks checking. I love having a bank account right inside my QuickBooks, but very few of my clients use it and everybody's like, I don't want to have an extra checking account. And you know, Intuit did this thing and signed me up for that. I didn't want it in the first place. And I think it's really unfortunate that they automated the process behind the scenes. You know, they should have just made it more clear, hey, you're going to sign up for QuickBooks payments. Would you also like to receive your all your [00:15:30] deposits instantaneously and get 5% interest? People would have said, sure, instead of opening up a bank account they didn't know about.

Hector Garcia: It could have been as simple as giving people a .01 percent discount on their on their merchant, you know, processing fees if it was processed through QuickBooks checking or give people access to the money quicker or whatever. Like if you post a value proposition and people have a choice to go. Choice one traditional banking. I'll get the money in 2 to 3 days. [00:16:00] It'll hit my Chase account or whatever. Choice two QuickBooks checking. You get the money next day and you'll get a point 0.1% discount on your merchant. If it was very clear like that choice architecture was very clear, there would be a lot more delight towards that. People made the conscious choice to get a deal and then when whatever other, you know, bad things that QuickBooks checking could have, like, you know, access to the money or whatever, people know, okay, I made that choice and it wasn't a good choice. But like when you just being pushed into something you didn't know you were getting. So that's my that's [00:16:30] my worry that into focus into it. Spend $7 billion in credit card. Let's just be clear about this. Intuit spend $7 billion in credit card was a cash was a stock. It doesn't matter. It's a $7 billion acquisition. Credit Karma, if you go to the Credit Karma website, I don't even know what you can buy from Credit Karma. Okay, maybe there's a premium, uh, credit monitoring that you can do, but for the most part, from what I remember, Credit Karma was free.

Hector Garcia: Free free free free free free. Check your credit report for free. [00:17:00] And so they bought this $7 billion asset that that has no revenue, direct revenue from like a subscription product the way a QuickBooks is or the way a TurboTax is. And in exchange, they got I think it's like information about 100 million Americans, you know, like, you know, credit information, about 100 million Americans. However, total number of customers were in credit card monitoring their their, their credit report. So I think Intuit's play here is we have [00:17:30] this incredible asset that has knowledge and understanding of how Americans consume, you know, how they buy, how they how they finance things. And Credit Karma has become, from a revenue perspective, a affiliate or a commission based system that that gets people into credit cards, gets people into loans out of loans, mortgage loans, whatever, like because they have the core audience of people checking their credit. And then, you know, they can as simple as create a rule in the back [00:18:00] end that says, hey, when you see this person go from 600 to 700, triggered this ad for a mortgage to say, hey, it looks like you can afford a mortgage at 6%. Now check out our mortgage options. So if they have a captive audience of people checking their finances or credit and they can offer or cross-sell lending products. So we're talking about credit cards. We're talking about auto loans. We're talking about, um, business loans, potentially home loans, that sort of thing.

Hector Garcia: So how does QuickBooks integrate to their 6 million business [00:18:30] owners? How do they integrate this asset? And I guess the the vertex bit of the sort of the where these two assets align is, hey, our QuickBooks customers are invoicing individual people and also businesses 10,000, 15,000. And we also see that sometimes it takes them 30 days to pay, 60 days to pay. And business owners are telling us, I'm talking about QuickBooks. They're telling us that they they need cash flow and they need more financing. Well, here's a very easy [00:19:00] and obvious opportunity for us. Let's try to sell loans or let's let's try to cross sell. Obviously with banking partners loans to the end users of QuickBooks, uh, online users, let's try to sell them and loans and try to get return on investment on this credit card asset. So this is where we are. This is this is this is what I see. This is finally the the light at the end of the tunnel as to why the QuickBooks purchased Credit Karma in the first place, or why the Intuit [00:19:30] do this, is because they see an opportunity to integrate both of those both of these worlds, the QuickBooks world and the personal financing world. And this is, I think, the first iteration of that. And again, because we can't see any landing page that particularly explains how credit financing works for QuickBooks users invoicing their customers. We can only go by the screenshots, the screenshots that we're describing to you right now.

Alicia Katz Pollock: Also, I think mint kind of played into this. Although [00:20:00] mint has been deprecated, they cancel mint. Mint was a free personal finance software that, you know, QuickBooks was too big for you, and it was just personal that you could use mint for free. But then what they did was they looked at your data and your credit worthiness, and they would offer you credit cards with different terms, and they would offer you loans, and they don't support mint anymore, which is a shame, because I actually liked it and it pointed people to it, but they did kind of wrap the backbone of mint [00:20:30] into Credit Karma. And so now we're seeing that same data mining here inside Qbo.

Hector Garcia: So the next screen is after you click on review and accept accept and review. And this this next screenshot actually, um, uh, fixes a little bit of the speculation we had earlier, which is the next screen now shows two separate. It sort of split into two is what looks like the estimate acceptance process. And the bottom is the loan. The loan offer.

Alicia Katz Pollock: So [00:21:00] the what the customer sees after hitting review and accept is they see the normal estimate up at the top, and then down below that it has a suggestion to use upgrade and click a button to see if you qualify. Apr. Starting at 849. Break your 9800 $658. Estimate payment into lower monthly payments with a loan through upgrade, and then below that, it actually has an about upgrade section with ratings and the [00:21:30] screenshot is cut off. So I can't see all of it. But it says about upgrade. They have a 4.8 rating out of five, with 9575 reviews from Intuit Credit Karma customers. So upgrade apparently has been the backbone behind a lot of the loans behind Intuit. Um, Credit Karma and people apparently are satisfied now. I can't imagine being satisfied with a 36% interest rate, [00:22:00] but maybe that's only for people who have really bad interest and the loan is very small. Something like that. Now, once upon a time, I did click when I was looking for some business financing to do some of the the projects that we're doing right now. I did click on one of the loan offers inside QuickBooks online, and went through the process of the underwriting to see what it would come to, and it was a $20,000 loan, and the terms that they gave me were like 29% with [00:22:30] a six month period. Meaning that I had to pay it back all 20% or $20,000 with an extra. What do the math on that $7,000? Um, within six months. And it's like, well, if I had the money, I wouldn't need the loan. So, you know, I just kind of laughed and moved forward. So I don't know if these loans are usurious or if the terms are actually viable terms that, you know, people can meet.

Hector Garcia: And [00:23:00] to be clear, that was a that was business financing. That was that's much different than this. This is you, the business asking for a business loan for your cash flow, not the customer receiving an estimate or an invoice financing the the invoice that they need to pay you. So it's I want to make a very clear that, like some of you might be, Hector. Alicia, this is not new. Quickbooks has been offering loans forever. True, but always to the QuickBooks user, not [00:23:30] to the customer of the QuickBooks user. And this is a huge deviation of like honestly, one of the things I'm worried about is sort of the privacy concerns is like, I know there was some postings and we probably dedicate a different episode to that once we study this deeper, but there were some postings in the same type of groups where people were were showing the the sort of updated user agreements for QuickBooks, and there was a part in there somewhere that said that you, [00:24:00] the QuickBooks user, are responsible for letting your customers know that when you enter your customer's information inside QuickBooks, because it's your customer database, Intuit has access to that and they could market to them. This seems to be a manifestation of that like they are marketing to my QuickBooks. Okay, I have a construction company and I am remodeling a house and I'm using QuickBooks and I love QuickBooks online and I invoice my [00:24:30] customer to remodel, you know, their playroom or whatever.

Hector Garcia: Now Intuit can offer a loan to my customer just because I entered my customer information inside into it. That is something that, number one, I wish I could opt out of that number because I because I don't do not want to now be responsible for having to tell my customers. Oh, by the way, when you get an invoice through me, there might be other things being sold to you inside of that invoice. Okay? [00:25:00] Even though it's related and connected and you and Intuit can argue till Tuesday, we're helping you because we're going to get you the cash. We're helping you because you told us you struggle with cash flow. Therefore we're going to get your cash flow like they could make that argument all day long, but they cannot win the argument that they, without my permission, market it to my customer. So what's going to happen? Am I going to be encouraged to put real customer information in in qbo? What's going to happen [00:25:30] with medical practices that already are so hesitant with HIPAA compliance to go into QuickBooks online? So Intuit is getting farther away from where they want to be in the world of being trusted, you know, or being trusted to have for the information to be secure. And this is going to be a big challenge to me, in my opinion. Okay. Go ahead. Alicia. Sorry about that.

Alicia Katz Pollock: Yeah. So let's actually take it a step further and look at where that permission is [00:26:00] actually happening. After doing some some digging around, Dina did find the origin of these offers and where they came from in the new invoice in the sidebar of the new invoice experience under the Discounts and Fees section, which is where you work with your merchant services. And normally that's where you go to like, do I want to turn on discounts? Do I want to turn on shipping fees? Do I want to turn on tips in there? There also is [00:26:30] this new option. So this is what they're beta testing and it's called customer financing. And it has a slide toggle for on and off. And what the information box text says is this option will allow your consumer customer to easily view personal loan options for certain estimates, to finance the purchase of your products and services. This may help you convert more estimates to paid work. You can turn this off for all estimates for your company by visiting [00:27:00] Account and Settings, so it is optional. It apparently is business to consumer, not business to business, although I don't know if how they can make that determination necessarily. And their little marketing thing in here is this may help you convert more estimates to paid work.

Alicia Katz Pollock: So if you are somebody who gives high estimates and you know you struggle to have your all of your bids accepted, this may be a way of actually getting them paid [00:27:30] where you're getting paid in full right up front. So it's no, no, no great shakes to you. But then your customer has the option of getting a loan and maybe they're like, oh well hey, that'll help. Sure. I'll pay this at 300 bucks a month instead of $10,000 out the door right now. So in some instances, it, you know, maybe it's maybe it's a viable option, but now you have to see yourself as somebody who is making this option available to your customers. So at least [00:28:00] you get the conscious choice. It's not like this is being foisted on everybody. And I want to really, really, really emphasize that and make that clear. Because if Intuit was just now, we're going to offer all your clients financing options, that would be kind of appalling. What they're really are doing is leveraging their other integrated part of their business, the company, to that benefit, like you were talking about, if the customer can't actually afford the job now, maybe they can afford the job.

Hector Garcia: Okay. [00:28:30] All right. So I take back my mini rant or part of it. Okay. So if if there's a toggle and I get to choose, um, which customers get this or just turn it off 100% in my company, then I'm okay. I'm 100% okay with that. Like, I, I can swing, I could, I could go all the way to the other side and tell you, um, as much as I don't like this, I'm okay with it always being a choice. That's just always going to be my point of view. Like, I, you know, I don't like 30s. I don't do not [00:29:00] want my customers to take on 36% loans. But also I've if I have a choice to turn this off and on, that's really part of the experience that I want to have as a business owner, as an accountant, I want to be able to choose these things. The one thing I'm not sure if I can back out on is, do we have a choice for into actually having access to our customer information and potentially being able to market to them? Because I do not see a setting anywhere where I can say nope into it, you cannot like I don't I don't [00:29:30] care who you are and the fact that you have this information you cannot look at, you cannot, uh, you cannot mine my customer database in QuickBooks online. I do not see a checkbox for that. So that would be the part of the rant that I'm still going to support. So Alicia, am I am I looking at this wrong?

Alicia Katz Pollock: Well, what I'm wondering is we already have a toggle for the business network, and that's the business network is the one that automates the entry that if you enter in a new vendor, it will look and see if they have that database [00:30:00] information and then auto fill it for you. And I know that their stated goal with that, which, you know, I heard two years ago and it hasn't happened yet, so I don't know when and if it will. But originally their idea is that if you make a bill in QuickBooks, your QuickBooks, it will show up as an invoice in your, uh, in your vendors QuickBooks. And if you and vice versa, if you make an invoice in your QuickBooks, it will show up as a bill in your [00:30:30] customer's QuickBooks. So I know that automation was a goal of theirs. I haven't seen a single sign of it, other than the fact that if your business network is turned on and you type in a company name, it will suggest possible matches to help you autofill. That's the only actual sign of it that I've seen. But I wonder if that toggle is related to this.

Hector Garcia: Yeah, I think I think the spirit of the toggle is related to it, but not directly. So the the the business network is [00:31:00] QuickBooks online has 6 million businesses using QuickBooks online. There's a big chance that these businesses might do business with each other. And there's some redundancy on the fact that QuickBooks has the full information of a business name, address, that sort of thing. And they could potentially also have bank account information. So what Alicia is talking about is the promise that eventually when businesses do business with businesses, do business with each other, and they both use QuickBooks, that [00:31:30] not only their information would be quickly added in there, but maybe possibly you create an invoice and then it gets created as a bill on the other side. So obviously that's the that's the end goal, which is actually a really nice end goal. But that's only B to B, right. This this personal loans thing that we're talking about is personal. It says personal loans. So if you turn on customer financing and you send an invoice to a business, and QuickBooks is not smart enough to know [00:32:00] that you send the invoice to a business, and that's maybe where the credit card database comes into play. You can have a business by mistake. Get this offer that this is a person alone. And then when they go through the process, it's a person alone, not a business loan. So it could get a little bit confusing, right. Because it says it's only to allow your consumer customers to get a person alone. But sometimes we invoice other companies.

Alicia Katz Pollock: I actually wonder this is pure speculation, but I wonder if they're looking at the customer [00:32:30] and they are matching it to a customer who is already in Credit Karma, and if they're already in Credit Karma, then this might show up. So that's pure speculation, but I wonder if that is something that might. No, actually that wouldn't work because this is a toggle to send. Okay. I want to actually go on to the next the next piece of it.

Hector Garcia: So actually before you go to the next piece of it because you touched on an interesting point, because that's not something you just like, just like quickly mentioned is [00:33:00] if if your QuickBooks customer is cross-referenced with a Credit Karma customer into a would have their credit information, so would they only maybe offer this to people that have good credit already and not the ones that have bad credit sort of thing. Or maybe the opposite, right? Only the ones that have bad credit that you can charge higher interest on. So obviously that's a speculation piece that we don't know. But since you brought it up, that could be interesting.

Alicia Katz Pollock: Sure. But but the problem [00:33:30] though is that this is controlled by the toggle in your company. So it's not going to you have to turn on the toggle yourself. So maybe they are able to to underwrite easier because they have that information, but that is not going to control whether or not the offer appears. Which was my original statement was all right, okay. Good point. So now I want to go into account and settings. And where where we see it for the permanent option is in accountant settings which is [00:34:00] up under your gear. And then down in the sales section, there's a section that appears here called financing and it says enable financing offers on or off. So you do have full control. You can turn the whole feature off completely, or you can turn it on and then add it selectively to different invoices that you're or different estimates that you're sending. So you do have control the way that they have [00:34:30] it set up. It's not just a blind hey we're going to offer all your clients financing it. This allows it really, truly allows it to be a value added. Like, hey, if this is a lot for you, um, I can turn on the option so that you can explore getting a loan through into it.

Hector Garcia: The question of the year is when they roll this out, will it be on by default or off by default? That would be the question of the year.

Alicia Katz Pollock: I'm assuming that it's going to be on by default, but let's [00:35:00] actually talk about that, that potential rollout of this as well, because the fact that this has only shown up in one file so far in the wild means that they're toying with it. But what they're going to do is look at adoption rates and see how many people actually click through and look at the financing. Then they'll look through they'll they'll see how many people are accepting the terms of the loan that they're getting, and they'll wait and see. [00:35:30] Are they getting good loans? Are they getting is Intuit getting viable loans and viable financing opportunities before they even roll it out to more people? So I'm sure this is going just going to be a micro test at first. And then once they figure out what kind of terms work or what kind of numbers work, they'll roll it out to another bigger segment and then another bigger segment and then another bigger segment. So this could just disappear completely. [00:36:00] We may never actually see this in all of our files. This could really just be the initial toe dip into the water.

Hector Garcia: Huh? That's good. Really good point. Actually, you know, I didn't think of it that way. I was I got I got all ranty thinking that my that my that my accounting software company that I be loved for a very long time is making a fundamental shift to personal loans. But, um, but yeah, it's possible, but it's also important to point out that whether the loans [00:36:30] are good or bad, it would be irrelevant to Intuit because Intuit is not the one lending the money. They're using a banking partner, and the way into it makes money with this, I assume, because the way it would just work, it's they get a commission for every approved loan. That's right. Whatever, whatever, whatever the interest rate is, you know, which is the revenue to the bank. They get a cut on that and that's it. So it's just as long as they could, they could they could push loans out the quality of the loans, whether this is good or bad for customers, that would be irrelevant. Of course, you know, if customers [00:37:00] are starting to complain about upgrade or the banking partners, they'll just switch out the banking partner. But, you know, Credit Karma would still be the main fintech company. That's sort of like selling or reselling these these loan options. Mhm.

Alicia Katz Pollock: And that's how the the whole Credit Karma operates is it's just into it either getting money off of the float or through their partnership agreements. But you know, you said it was a, you know, $1 billion company or multi billion dollar company. And the Credit Karma website [00:37:30] does also talk about improving your credit scores and your credit profiles and using these financing packages in order to build your own credit. And so that's part of the idea behind Karma credit is to help people with bad credit get good credit or consolidate their credit, or get access to financing so that they can improve their lives. And as long as the terms are completely up front and not, um, [00:38:00] not usury, then, um, you know, I, I'm actually okay about this. So when I first saw Dina's post, I was absolutely, completely in shock. But even just this process of talking it through in public made me realize that, hey, it's a toggle. It's an option. It might help you land some more business. And hopefully these terms are not 36%. Mostly. Hopefully people are getting terms closer to the 10% range, which is, [00:38:30] you know, I don't want to pay 10% myself, but it's not unreasonable loan terms. So my my conclusion is interesting. And stand by and let's see if it ever rolls out into general general access or not.

Hector Garcia: Yeah. And we'll probably end the episode by doing a disclaimer we should have done at the beginning, which is this is the unofficial QuickBooks accountants podcast. We do not have any other information [00:39:00] other than the screenshots that we looked at. We have not spoken to anybody at Intuit. Uh, we have not been told to, to to speak about this. And one of the risks of speaking about this in public is that we don't have any more information than you. So we either try to and it's not really like breaking news, but we either try to think through our thoughts. Alicia and I both thinking through our thoughts about we opine about this and each of us start with an opinion. And then as we [00:39:30] as we talk through it, you know, our opinion could change. And as this thing gets rolled out and it gets changed and fixed, etc., the opinion or opinion could also change. And the reality is that we're just we are just two practitioners, trainer practitioners that are navigating the world of QuickBooks and attached services just like you are. So we we also reserve the right to have been wrong. We also reserve the right to to to accept that we speculated a little bit, but into it, if [00:40:00] you don't give us clear information about what this is, you are going to get speculation.

Hector Garcia: There's nothing there's nothing else we can do about it, right? Like, well, anything that you don't say is going to be left out for speculation. And we're not trying to, you know, be be this is a yellow journalism. We're not trying to, you know, sound the alarms. We want every listener to this podcast to be more prepared for everything, right, for all the changes. And, you know, the changes are like this year and last year, I would say post-pandemic, [00:40:30] the changes have just the rate of change has just been so fast that sometimes it's impossible to keep up with this. And the worst thing, the worst thing for me as a practitioner, that that was sort of a representative of Intuit, as a ProAdvisor, as a YouTube personality or whatever, is when people come to me and say, hey, this happened, and me saying, oh, I haven't seen this before. Like a lot of us take pride on being in the know, you know, even if we're outsiders being in the know. So I wanted to make [00:41:00] sure that we add this disclaimer that we're pretty sure to add it at the beginning, that this is into it. This is what you get when you don't explain these things up front.

Alicia Katz Pollock: Okay. And so what I want to leave you with is that if you have clients who send estimates or you send out estimates, check the settings. If you're using the new invoicing, look over on the right hand side and look for that toggle and see if what you expect your client to see is really going to be what they're going to see and make the choice. Maybe on a couple, [00:41:30] have a conversation with your client and say, hey, I want to turn this on. Can we look together and see what this is and if it's right for you, or turn it off because you just don't want to go there altogether. But I want to give you the control to know that you have an option with this, and if it's right for you, then play with it and give into it the data that they need to find out if this is really a good idea or not.

Hector Garcia: Awesome. Well, with that being said, Alicia, what's going on in your world?

Alicia Katz Pollock: Um, [00:42:00] I just put out that, um, second book. So now I have two books on Amazon for QuickBooks online, from setup to Tax Time, which is a beginning guide to using QuickBooks. So it's great for your clients or great for beginning bookkeepers. And then my Kindle version of my comprehensive guide to converting from QuickBooks desktop to QuickBooks online just came out, so it is now officially. Both books are now available on Kindle as well as in paperback. And [00:42:30] last month I sold over 100 copies each, so I am really happy and stoked about that. Awesome. Yeah. And so to find those books, you can go to Amazon.com and just search for Alicia Cats Pollock cookbooks and you will find those books. How about you, Hector? What's going on in your world?

Hector Garcia: Well, we're recording this in August, and there's only two months left for my big conference reframe. So all of my efforts is going to market the conference. We have over [00:43:00] 100 people that have already secured their ticket and their hotel and all that stuff. Uh, we've contracted with the hotel, the potential to 200 attendees. We're probably going to project closer to 150. Um, but we're very excited. We have, uh, tons of friends of the podcast that are sponsoring the the, the the conference and the speakers are fabulous. The content that Carlos and I put it together are great. And Alicia, I know you're coming. So [00:43:30] looking forward to seeing you there. So reframe 2020 4.com if you want to check it out. Reframe 2020 4.com.

Alicia Katz Pollock: And Hector had just given me a copy of a book about how to talk to your clients so that you can close deals and have happy clients. And I've flipped through it and it was just fantastic. And I know that that's the backbone for some of the content in the Reframe conference. So I am even more excited about the conference than I was, because that book is gold, and I'm passing it around to everybody in my [00:44:00] company who works with clients.

Hector Garcia: Yes, that that book, really, it's called Exactly What to Say. It really changed my point of view on how to talk to people, how to be more influential with your conversations. They explore the concept of magic words. Maybe we can do a an episode just on that.

Alicia Katz Pollock: That would be fun. All right. Yeah. All right. So thank.

Hector Garcia: You everybody. Thank you Alicia. And thank you Intuit for giving us more stuff to talk about. See you in the next one.

Alicia Katz Pollock: See you in the next one.