Microsoft And Plaid Should Target Small Businesses (Not Consumers) With Money In Excel

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Forbes | Ron Shevlin | April 6, 2020

Microsoft CEO - Microsoft And Plaid Should Target Small Businesses (Not Consumers) With Money In ExcelMicrosoft and data aggregator Plaid announced a partnership to offer a service they’re calling Money in Excel. According to Plaid:

“Money in Excel essentially turns the spreadsheet into a fintech app. It allows users to securely connect their financial accounts, import the data within them, sync balances and transactions over time, and, ultimately, gain greater insights into their financial health.”

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Here’s how it’ll work: Plaid will provide a permissioned connection to financial accounts from within Excel. After linking their account(s), users will have access to their balance and transaction history. The tool will provide charts and graphs analyzing users’ spending in a “Monthly Snapshot” tab.

According to Microsoft, the tool will also feature proactive alerts about price changes for recurring payments, bank fees, and overdraft warnings.

Although there was no mention of fees by either Microsoft or Plaid, American Banker reported that Money in Excel will will cost $7 a month for individuals and $10 a month for families.

  • The Good News: Competition in the PFM Space is Weak (For Now)

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Microsoft and Plaid Should Focus on the Small Business Market

There’s a better market for Microsoft and Plaid to go after with Money in Excel: Small businesses.

That sentiment is shared by Bryan Clagett, Director, Strategic Initiatives at StrategyCorps, who knows a thing or two about this: He’s a former banker, was the Chief Marketing Officer of PFM provider Geezeo, and is a small business owner.

According to Clagett, “An Excel ‘add-in’ makes more sense for small businesses than for consumers. Consumers don’t care about tracking their spending behaviors—small businesses do. In addition, small businesses are already closely tied into the Microsoft ecosystem.”

A survey of small businesses from Cornerstone Advisors confirms this. Roughly three in ten small businesses use spreadsheets to do their accounting, about a quarter use them for invoicing and bill payment, and a little more than a fifth rely on spreadsheets to do payment acceptance.

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And that doesn’t include the number that throw data into spreadsheets to analyze their cash flow and spending trends. A study from Aite Group estimated that about 70% of small businesses are more dependent on spreadsheets than they need to be.

Microsoft and Plaid Missed a Big Opportunity

By not focusing on the small business market, Microsoft and Plaid missed an opportunity to jump start their new service.

According to Derik Sutton, VP of Marketing for Autobooks, a fintech that integrates small business financial management tools into digital banking channels:

“Small businesses owners spend too much time cobbling together data from multiple platforms, or offline record keeping, in order to apply for a loan from a bank. We are seeing this play out with the recent PPP and SBA programs.”

Sutton adds, “Microsoft and Plaid would have been inundated with Money in Excel customers had they recognized the small business need. If they had templates for historical and projected cash flows, income statements, and balance sheets, every bank in the country would be telling small businesses to sign up for the service and add their accounts before applying for loans.”

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