What is the Intuit Small Business Revenue Index?
The Intuit Small Business Revenue Index is the first and only index providing current information on monthly small business revenue. The Index is based on a set of approximately 100,000 small businesses that use QuickBooks Online, of which approximately 15 percent are sole proprietorships with no employees. This is not survey data, but instead data generated from Intuit's QuickBooks Online records in near real-time.
What is the purpose of the Index and why is it unique?
We created the Intuit Small Business Revenue Index to provide real-time information on small business activity. We believe that it's important to understand what's happening with month-to-month revenue among small businesses. This insight gives us a more complete picture of the health of our overall economy and is often critical for understanding specific trends. Because the Index is created with online QuickBooks data, the Index is available with a lag of only a few weeks. There are no other indexes that publicly track small business revenue.
How is your Index different than the numbers put out by other organizations?
The Revenue Index is the first to provide current information on monthly small business revenue. Moreover, the information is provided in near real-time. The only other similar information on small business revenue comes from the Statistics of Income (SOI) from the Internal Revenue Service. This data is provided on an annual basis only and available about two years after the close of a tax year. The National Income and Product Accounts also provides data monthly at an aggregate level past dates for available SOI data, but it is revised once the SOI data is complete. We expect that the Intuit Small Business Revenue Index will be of interest because so little current information about current small business activity.
When will your Index be available?
The 2014 calendar is shown below. Each release represents a full calendar month of transaction data. The data is pulled on the 21st of each month for the prior month.
Why do you release the Revenue Index for the prior month and not the current month?
The data for the Revenue Index is pulled on the 3rd Sunday of each month for the previous full calendar month. A few extra weeks are needed to make sure that the Index has the most up-to-date data as many businesses backfill their accounting files for the previous month.
How many firms are represented in your index?
The Intuit Small Business Revenue Index is based on approximately 100,000 small businesses that use QuickBooks Online, a subset of the total QuickBooks Online user base.
How many customers does Intuit QuickBooks have and are all of these used in the index?
Intuit QuickBooks serves more than 4 million small businesses with both desktop and online financial management services. The Index is based on approximately 100,000 small businesses that use Intuit QuickBooks Online. This is a subset and not the total number of Intuit QuickBooks users.
See the description of our methodology
What steps has Intuit taken to ensure the privacy and security of its customers' account details used in the Index?
The data is pulled in aggregate from approximately 100,000 Intuit QuickBooks Online small business users. The data are then used to separate cohort and age effects on average company revenue and to isolate the influence of the business cycle on company revenue. Since the data is provided in aggregate form only, it is not possible to use the Index to determine a specific small business' revenue or profit. See our White Paper for details.
Does the Index reflect Intuit's base of QuickBooks customers or Intuit's business results for any period?
No. The reason we make an effort to statistically separate the cohort and age effects in the revenue data is to isolate the impact of the economy on small business revenue. Thus, the figures do not reflect the changing size or age of companies that are QuickBooks Online users. The percentage changes in revenue reflect the conditions of the economy on the QuickBooks Online users, but do not represent changes in Intuit's base of QuickBooks Online users or Intuit's business results for any period. The Small Business Revenue Index data is constructed to reflect revenue activity in small businesses, after controlling for the changes in the composition of the QuickBooks Online users. We cannot say that this is representative of all small business because we make no effort to calibrate the figures to any other small business data. If we did try, we could not say much because we have only annual data for 2005-2009 from the IRS by industry.
How does the Revenue Index complement Intuit's Employment Index to tell a more complete story about small business growth and the economy?
Intuit's Revenue and Employment Indexes enrich our understanding of small business by providing current, monthly data on small business revenue, hiring and compensation trends in the U.S.
Why do you revise the data each month? Is this standard practice with other indices?
On the 3rd Sunday of each month, the transactions for the previous month are tabulated and appended to the data for historical months. This raw data is not revised; however, the statistical procedure used to construct the index is such that adding a new month of data will affect previously reported values for prior months. This is also true of the figures reported by the Bureau of Labor Statistics (BLS) each month. When BLS re-runs its seasonal adjustments to employment, there are usually revisions to the figures for several prior months. In addition, we use the IRS Sole Proprietorship Statistics for re-weighting by industry, and incorporating new data from that source (released annually) will result in revisions to our index.