By Ilene Eisen, CPA.CITP
I have been working with QuickBooks clients for over 20 years and I have seen many changes in both the online and the desktop versions. I am a fan of both versions but when it comes to choosing which is best, it’s important to consider your company’s needs and the way you work. To help you compare QuickBooks Online vs QuickBooks Desktop, I’ve summarized the significant differences in access, functionality, and costs.
QuickBooks Online Versions
- Access – QuickBooks Online is designed for a business that needs 24/7 access anywhere, anytime, on multiple devices (smart phone, tablet, computer).
- Accountant Access – You can invite up to two accountants to have access to your file to review data and enter adjustments. Many clients will give access to both their bookkeeper and their Tax Accountant.
- Functionality – QuickBooks Online includes the core accounting functionality and relies on “Apps” to customize to the needs of the user. Inventory and job costing has limited features. Most of my QuickBooks Online clients are service-based or do not have inventory.
- Costs – With QuickBooks Online, like most online software, you will pay a monthly or annual subscription per user. Additional costs may be incurred to use apps. If you cancel the subscription(s) you will no longer have access to the applications and your data.
- Cost for Multiple Companies – If you have more than one company, you will need to pay an annual or monthly subscription per user for each company; there are no cost savings for multiple companies.
QuickBooks Desktop Versions
- Access – The desktop versions are designed to work on Windows computers/networks. Users open the company file on a computer that has QuickBooks Desktop installed. The company file is usually stored on a company server, individual computer, or hosted online. Access to the company file requires access to your computer, company network, or hosting account.
- Accountant Access – The desktop software has a feature called the Accountant’s Copy that allows a client to send a copy of their company file to their accountant. The accountant can enter adjustments and send the file back to the client to import changes. Another option for accountants is to get a backup file of the company, create journal entries, and send the journal entries to the clients to be imported to the company file.
- Functionality – The desktop software is designed to be the “core” of your accounting. Job costing is very easy to use and reporting is quite good. The inventory functionality works well for small and medium-sized businesses. Additional inventory features are included in Advanced Inventory, available in the QuickBooks Desktop Enterprise version.
- Costs – QuickBooks Desktop versions are released each year, usually in September, and are priced by the number of users. Annual versions are supported for three years with updates. Services such as Payroll and Credit Card Processing require that you are within the three-year support period. QuickBooks Desktop Pro and Premier are sold as either software or subscription (Plus version). QuickBooks Enterprise is only sold on a subscription basis.
- Cost for Multiple Companies – There is no additional fee for creating and using multiple company files.
So, QuickBooks Online vs QuickBooks Desktop: Which is Better for You?
QuickBooks Online and QuickBooks Desktop are both designed for small and medium-size businesses; however there are significant differences in access options, functionality, and costs. Use the information above and consider the needs of your company to determine which product is a better fit for you!
For additional information on QuickBooks Online and Desktop, please join one of my upcoming live webinars, which explore specific features and provide overviews of both the QuickBooks Online and QuickBooks Desktop versions. If you’re just considering QuickBooks for the first time, don’t miss my previous article: The 4-Step Solution to Bringing Quickbooks to Your CPA Practice
Ilene Eisen, CPA.CITP, is an Accounting Expert and Software Consultant/Trainer with more than 30 years of industry experience. For more than 20 years, she has provided accounting and bookkeeping consulting services and training through her Monterey, CA-based firm, ie Solutions.