QuickBooks (QB) has been a well-known name in the accounting software space for decades. More recently, the company has been heavily promoting QuickBooks Online (QBO) as more cost-effective, efficient, and flexible compared to other versions such as QuickBooks Desktop. However, is QBO really the best fit for your small business? Let’s address the QuickBooks Online vs Desktop debate by assessing features in greater detail so you can determine if it might work for you.
QuickBooks Online vs Desktop: 4 Comparisons
The QuickBooks Desktop version can be purchased in a physical store and users can access all its features offline.
QBO is a cloud-based online offering from QuickBooks, and it can only be accessed via an internet connection.
QuickBooks Desktop is a much more robust product, offering more reporting capabilities, analytical functionality, and forecasting options. It also offers users the ability to calculate and rebill payroll costs and determine discounts for specific customers or clients.
Although QBO is marketed as an “easy-to-use” product, it is limited in its capabilities. In addition, users must possess knowledge on how to code different categories to adequately navigate the system.
#3. Filtering Data
QuickBooks Desktop has hundreds of reports already loaded in the system. Users can filter any item in the report or drill down for greater detail.
Unfortunately, QBO does not offer this level of functionality. To filter and reconcile, users must export the data to Microsoft Excel and then filter manually.
Using QuickBooks Desktop for payroll reporting takes about 30 seconds. However, QBO does not offer this capability. Just like with filtering, users would need to manually export the data and search for each item.
Furthermore, QuickBooks Desktop also allows users to customize Profit and Loss statements, while QBO does not. In addition, QBO does not feature a general ledger, which is a basic requirement for keeping a record of a business’ financial transactions.
QuickBooks Online: Benefits & Challenges
Benefit: QBO Could Be A Good Fit for Micro-Businesses.
QBO is likely a good solution for a micro-business because it has also been lauded for permitting more than one user and offers remote access to the books. This feature could be useful for a small organization which may not have a physical office location. It might also help micro-businesses that generate about $50,000 in annual revenue.
However, if your business is bringing in over $100,000, you should employ a professional bookkeeper who has the technical expertise to assist you with the full version of QuickBooks Desktop.
Benefit: QBO Offers the Benefit of Automation.
Businesses can connect their bank accounts and credit cards to QBO so that transactions are automatically updated in the system. This feature allows for seamlessness and increased efficiency.
The QuickBooks mobile app also allows users to attach photos of receipts to transactions and stay on top of their finances. The online features also allow users to “sync their PayPal transactions, link business cards with American Express, import sales data from Square and more.” As these methods of online payment gain momentum, this feature is increasingly important.
Alternatively, with QuickBooks Desktop, users must manually download all bank and card transactions and upload them to the system.
Challenge: Navigating QBO Might Be Difficult for Beginners.
The online version is not easy to navigate and accessing multiple screens simultaneously is challenging at best. Users can open multiple tabs but sometimes you may lose the content you had on the first tab, when you update the second one.
Not having multiple windows available in QBO makes it hard to compare numbers and data side-by-side. With QuickBooks Desktop, users can have multiple windows open simultaneously and the changes you make update to the other windows automatically.
Unfortunately, with QBO you would have to close each window, then rerun the entire report and redo filters just to get back to where you were in the process. This limitation could result in wasted time and potential accounting errors.
Is QBO a Smart Financial Move?
When assessing the cost of both systems and software packages, QuickBooks Desktop (aka QB Premier) costs $379 as a one-time payment (users purchase the product and install it on their computers). They may require training or technical assistance, but oftentimes, users tend to skip a few versions before upgrading.
Alternatively, the heavily pushed QBO system costs anywhere from $120 – $288 per year (paid and sold as a monthly subscription). By driving everyone to a monthly fee for a web-based system, QuickBooks can collect a fee every month, for as long as a business is in operation.
If you are newer to the world of bookkeeping and accounting, QBO may not be the best fit for your small business, and it would be worth pursuing alternative products and services. If you are not experienced in maintaining your books, the manual process might result in a bookkeeping error.
This could potentially result in costly fines or penalties from filing incorrectly, or at the very least, you won’t know how much money you have or owe and would need to conduct a thorough audit, halting other productivity.
MyRQB Offers Peace of Mind
What happens if complications arise when using QBO? It’s likely you will incur more costs and lose valuable company time. At that point, it becomes critical to hire a professional such as your team here at Remote Quality Bookkeeping™ to unscramble the issues.
Both QBO and QuickBooks Desktop each have their own advantages. However, in our experience, QBO is a downsized, simplified version of QuickBooks Desktop.
QBO offers the benefit of automation, while QuickBooks Desktop provides a much more robust platform that is a more appropriate solution for businesses with annual revenue over $50,000.
Both systems require technical know-how and doing the books on your own may have serious long-term implications on your business. The more accurate and timelier your books are, the better tuned you can be with your business. When this happens, you will be able to make real‐time business decisions based off your financial health.
At Remote Quality Bookkeeping, we are determined to make life easier for business owners with simplified bookkeeping solutions. Our goal is to save your time, allowing you to dedicate your energy to running a business – while we do all the paperwork. We are also fully trained and certified Intuit QuickBooks Pro Advisor bookkeepers.
Interested in learning more about what we do? Give us a call at 888-638-1615 or submit our online contact form. We look forward to getting in touch.