Visa has announced that they are acquiring Plaid, a FinTech Unicorn who provides the backend data-transfer piping a lot of automated financial systems use - including some cutting edge bookkeepers.
So what does this $5.3 billion acquisition mean to startup bookkeepers, particularly the ones who use technology to automate their process?
Kruze Consulting’s take on Visa’s acquisition of Plaid
At Kruze, we’ve been using Plaid for a while and we love it. One of the best things about it is it gives us really clean data from the banks. Sometimes the bank feeds that roll into our favorite accounting software (Quickbooks) are a little messy. And traditional accountants might actually not even use the QBO integration, and instead may manually pull bank statements for their clients. (Side note: Banks statements are a source of truth in many cases - the cash in the bank shouldn’t lie! So it’s very important to getting the books done right.)
Plaid, if integrated correctly, automates the bank feeds and bank data, and helps us get it neatly into Quickbooks. If you are a bookkeeper with a good software engineering team, you probably already love what you can build into the QBO APIs. This is just like that, with another awesome piece of “API’able” technology, Plaid. Now, we still use the bank feed and Quickbooks because it’s super important that all the transactions and Quickbooks are matched to bank transactions. That’s called a true reconciliation. Everything has to match the cash in the bank at the end of the month.
Auto-generating the statements is a huge efficiency boost for Kruze. Automation even lets us pull partial statements in the middle of the month, vs. having to wait to do it until the first day of every month. That allows us to do a cash reconciliation mid-month and limit the work towards the end of the month. If you can imagine, as an accountant with well over 200 clients, who all expect their books to be done promptly the following month, we can get into some time crunches in the first week of a new month! But with automation and the ability to grab partial data from the banks, we can get ahead of the game and do some of the heavy liftings in the month instead of waiting to the next. This helps us load balance our team.
And it also means that clients get their historical financial results faster. This is huge for the startup clients that are monitoring burn, need to give their VC’s the report on what the burn rate and the revenue were for the month before.
So Plaid has been important for Kruze Consulting. With the acquisition by Visa, we think it will get better. As an acquirer, they have a history of devoting technology and distribution resources to the companies that they buy. Visa seems to have stepped up the acquisition frequency, having purchased at least five FinTech companies since the middle of 2019.
We expect that Visa will dedicate a lot of resources to Plaid. For instance, right now we can’t get check images from Plaid. That’s the kind of thing that Visa will be able to spend money on and give bookkeepers the actual check images, making it easier to see who the checks are to. So we can account for it properly instead of having to log into the pesky bank account.
The Visa acquisition of Plaid is huge. it’s a great acquisition by Visa and it’s really going to help all the startup bookkeepers out there who are using technology to make their process more efficient.