In this article, we are going to explain QuickBooks Online vs Desktop, including the following:
- Why are there Both Desktop and Online versions of QuickBooks?
- How to Choose Which is Right for You
- The Primary Differences: QuickBooks Online vs Desktop
- Ease of Setup
- Ease of Use
- Customer Support
- How to Get Started
Why Are There So Many Different Versions of QuickBooks?
QuickBooks supports both a desktop version and an online version. The desktop version has been around since the 1990s, long before providing software over the Internet was common. Millions of small businesses have been using QuickBooks Desktop for years and continue to use it. Currently, QuickBooks Desktop has more features and functionality than the Online version. To use the desktop version, however, you need to install software onto your computer.
The Online version is more recent. In terms of functionality, QuickBooks Online is more stripped down. However, QuickBooks is always adding more features to the online version. For a lot of small businesses, the online option is more convenient and allows you to get more done in less time. To use the online version, all you need is an Internet connection.
QuickBooks Online vs. Desktop How to Choose Which is Right For You
When to Consider QuickBooks Desktop
QuickBooks Desktop is generally best solution if you are a product-based business that requires one or more of the following features:
- Multiple inventory tracking options – QuickBooks Desktop offers two options for tracking inventory: the average cost method or the FIFO method (FIFO method available when you purchase the Advanced Inventory add-on module.). QuickBooks Online only allows inventory tracking using the FIFO (First In First Out) method.
- Batch invoicing: QuickBooks Desktop has batch invoicing capability. When the amount and type of service you are billing multiple clients is the same, this feature allows you to invoice them all at the same time.
- Industry-specific versions: QuickBooks Desktop offers industry-specific features for businesses that fall into one of the following industries: General Business, Contractor, Manufacturing & Wholesale, Professional Services, Retail & Nonprofit. QuickBooks Online does not offer industry-specific features.
When to Consider QuickBooks Online
QuickBooks Online is your ideal solution if you are a service-based business that does not need inventory tracking options, has simple invoicing requirements, and could benefit from the following:
- Ability to give your accountant or other users access from any location: QuickBooks Online allows you to set up a user id and password for each person who needs to access your data from wherever they are located.
- Ability to enter transactions using a mobile device, PC or a Mac: QuickBooks Online does not require software installation. Therefore, you can just open up a web browser from your mobile device, PC or Mac and log right into your account to quickly access your data.
- Automatic, real-time updates: As you make changes to your data, QuickBooks Online updates automatically. Whether there is one person in the QuickBooks file or multiple users, changes made are are updated in real-time.
QuickBooks Online vs. Desktop Summary Table
|Features/Benefits||QuickBooks Online||Quickbooks Desktop|
|Retail Cost||$15/month & up||$299 & up|
|Software Installation Required||No||Yes|
|Automatic online backup and protection of your data||Yes||No|
|Access data from multiple platforms (Mac & PC)||Yes||No|
|Access data from anywhere at anytime||Yes||Available with the purchase of hosting services|
|Unlimited free technical support||Yes||No|
|Automatic access to the latest version of QuickBooks||Yes||No|
|60-Day money back guarantee||Yes||Yes|
|30-Day risk-free trial available||Yes||No|
|Sample company file test drive available||Yes||No|
|Multiple inventory tracking options||No||Yes|
QuickBooks Online vs. Desktop Primary Feature Differences
Software Installation: QuickBooks Desktop requires you to download software onto your computer which also means that you are not able to access the program when you are not at your desk. QuickBooks Online does not require installation and can therefore be accessed anywhere with an internet connection (including your mobile phone).
Automatic online backup and protection: QuickBooks Online data is automatically backed up and secured by Intuit’s servers. QuickBooks Desktop data is not automatically backed up. You will need to create a backup plan and set it up on your own.
Access data from multiple platforms: QuickBooks Online data can be accessed from a PC and Mac. QuickBooks Desktop data is only accessible from a PC or Mac, depending on which version of QuickBooks you are using.
Access data from anywhere at anytime: QuickBooks Online data can be accessed by users in different locations at the same time – no reason to transfer files back and forth. QuickBooks Desktop data can be accessed by multiple users in different locations only with the purchase of hosting services.
Unlimited Free Technical Support: With QuickBooks Online, you can contact technical support as much as you like at no additional charge. QuickBooks Desktop support is free for the first 30 days after you install the software. After 30 days, you will have to purchase one of the support plan packages.
Automatic access to the latest version of QuickBooks: With QuickBooks Online, you have immediate access to the latest version of the software. QuickBooks Desktop requires that you purchase the latest version of the software to gain access to new product features.
30-Day Risk Free Trial: QuickBooks Online is available to try free for 30 days. You do not have to provide a credit card until the trial has expired and you decide to convert to a paid subscription. QuickBooks Desktop does not offer a free trial version of the software.
Sample company file Test Drive: This will give you access to a sample QuickBooks Online company file that already has QuickBooks data in it. You are able to navigate around the program and practice entering transactions. QuickBooks Desktop does not offer a test drive.
Multiple inventory tracking options: QuickBooks Online allows inventory tracking using the FIFO (First In First Out) method only. QuickBooks Desktop offers two options for tracking inventory: the average cost method or the FIFO method (FIFO method available when you purchase the Advanced Inventory add-on module.)
Batch invoicing: QuickBooks Desktop has batch invoicing capability. This feature allows you to invoice multiple customers at the same time. QuickBooks Online does not offer this feature.
Industry-specific versions available: QuickBooks Desktop offers industry-specific features for businesses that fall into one of the following industries: General Business, Contractor, Manufacturing & Wholesale, Professional Services, Retail & Nonprofit. QuickBooks Online does not offer industry-specific features.
Both QuickBooks Online and QuickBooks Desktop come with a 60-day money back guarantee.
Quickbooks Online vs. Desktop Pricing
The QuickBooks Desktop product line has four subscription options:
QuickBooks Desktop Product Comparison Chart
|Maximum # of users||5||3||5||30|
|One-click reports||100+||100+||150+ |
|Create a Business Plan using your QB data||X||X||✔||✔|
|Available in Industry-specific versions||X||X||✔||✔|
QuickBooks Premier and Enterprise offers industry-specific versions of QuickBooks. Enterprise allows you to include up to 30 users, which makes it suitable for medium-sized or fast-growing small businesses. If your business falls into one of the following industries, you should consider purchasing one of these QuickBooks Desktop product in order to take advantage of the industry-specific features that are not available in QuickBooks Pro or Mac:
- General business
- Manufacturing & Wholesale
- Professional Services
QuickBooks Mac and Pro offer similar features. The primary differences between them are the maximum # of users and the platform that they operate on (Pro operates on PC; Mac operates on Mac). I recommend these two products to most small businesses because when compared to similar products you can’t beat the features these products offer for the price.
QuickBooks Online offers the following three subscription levels:
- Simple Start
QuickBooks Online Product Comparison Chart
|Monthly Retail Cost||$15||$30||$40|
QuickBooks Online is offered in three monthly subscription plans. It is not like QuickBooks Desktop where you make a one time payment in full for the product. As you can see from the chart, the 3 plans differ not only in retail cost and # of users but also in the following two key areas:
- Accounts Payable: the ability to enter and pay bills is only available with the Essentials and the Plus subscriptions. It is not available with Simple Start.
- Inventory: tracking and managing inventory is only available in the Plus subscription. It is not available in Simple Start or Essentials.
Intuit does a great job of running promotions throughout the year that may cut your cost by as much as 50 %. Be sure to check their website often for special promotions.
Ease of Setup: QuickBook Online vs. Desktop
One of the great things about QuickBooks (both Desktop and Online) is that you don’t have to be an accountant in order to set up or use the program. Whether you are using QuickBooks Online or QuickBooks Desktop, this process should take no more than 20 minutes to complete.
Getting Your Bank Account Transactions into QuickBooks
Once you have completed the initial setup, both QuickBooks Online and QuickBooks Desktop allow you to download your banking transactions from your bank’s website directly into your QuickBooks account. In my experience, this process is a lot quicker to do in the Online product than it is in the Desktop version.
Setting up Your Company
The company file set-up process is basically the same for both QuickBooks Online and QuickBooks Desktop. The express setup takes about 5-10 minutes and requires just some basic company information. The more in-depth set-up should take about 20 minutes. In addition to providing basic company information, you will need to answer a few questions about how you will manage your business. I recommend you spend the few extra minutes upfront and complete the in-depth set-up process. The more in-depth set-up process will provide you with a more customized company file setup that will meet your specific business needs.
Ease of Use: QuickBooks Online vs. QuickBooks Desktop
Both QuickBooks Online and QuickBooks Desktop are very user friendly. Prior to 2013, I would not have said that about QuickBooks Desktop. However, in 2013 there were some major changes to the QuickBooks Desktop interface which made it much more user friendly than it had been in previous versions. This was partly due to the fact that the Online version was a much cleaner, easier program to navigate, and Intuit decided to apply some of those same features to their legacy desktop product.
Both QuickBooks Online and QuickBooks Desktop products include the following user friendly features:
- Organized menus that allow you to quickly find what you are looking for:
- Keyboard shortcuts commonly used in Microsoft products (Ctrl C, Ctrl V)
If you are currently using QuickBooks Desktop, the same QuickBooks terminology will translate to QuickBooks Online. However, you will have a bit of a learning curve when it comes to navigating within the program since it is very different from QuickBooks Desktop. If you have never used QuickBooks, you will most likely get up-to-speed pretty quickly on either product that you choose.
Customer Support: QuickBooks Desktop vs. Online
1. In-Product Help options are resources available within both QuickBooks Online and QuickBooks Desktop under the Help menu:
Knowledgebase (Help menu) – This is one of my favorite resources because it the quickest way to get answers to questions like, How do I enter a check? or How do I create an invoice?
Video Tutorials – a library of videos that you can access from the Help menu. These videos provide a quick way to visualize step by step how to do something in QuickBooks. They typically run between 1-10 minutes long.
2. Phone/Chat support is available for both QuickBooks Online and QuickBooks Desktop. Unfortunately, the quality of support that you receive may not always be good. I have had better results with chat support than I have with telephone support. In addition, support for Online is always free. Desktop support is only free for the first 30 days. After 30 days, you will have to purchase one of the support plan packages.
Here are a couple of situations where I would opt for chat support over telephone support:
- If you’ve encountered an error message that is preventing you from using your QuickBooks file then I would call the support line for assistance.
- If you’ve got a billing question then I would use chat support.
3. Certified QuickBooks ProAdvisors are accounting professionals who have certified in one or more QuickBooks products. There are a number of ProAdvisors who do not like the QuickBooks Online product and therefore do not support it. You will find more ProAdvisors that are certified in the QuickBooks Desktop product line than QuickBooks Online.
ProAdvisors are not Intuit employees. They are independent contractors and depending on experience, will generally charge $25/hr & up for their services. The more education and experience they have, the more they will charge.
With that in mind, I recommend hiring a ProAdvisor for the following types of services:
- To review your company file setup prior to entering transactions.
- To provide face to face training on how to properly use QuickBooks
- To perform a periodic review of your financial statements. I recommend you set this up on a monthly or quarterly basis.
Intuit has a Find-a-ProAdvisor website where you can go and review the profile of ProAdvisors in your local area.
How Do I Get Started?
If you’d like to try QuickBooks Online before you buy it, you’ve got a couple of options:
Option 1: You can go for a test drive. This will give you access to a sample company file that already has QuickBooks data in it. You are able to navigate around the program and practice entering transactions like invoices and checks. Once you close out of the file, it does not save your work. To access the test drive, click here and follow the on-screen instructions.
Option 2: Sign up for a 30-day risk free trial of QuickBooks Online. This will allow you to:
- Create your company file using your own data
- Access all of the features available
- After 30 days, you can subscribe by simply providing your billing information
- If you decide not to subscribe you will have read-only access to your data for 90 days.
Since QuickBooks Online is a cloud-based product, there is no software to install. If you don’t need to try a trial and are ready to get started with QuickBooks Online, just click here.
QuickBooks Desktop does not offer a free trial option. However, if you do purchase QuickBooks Desktop or QuickBooks Online and later decide that it is not the right solution for you, there is a 60-day money back guarantee.
To get started with QuickBooks Desktop, click here.
Whether you decide to purchase QuickBooks Desktop for its extensive inventory tracking capabilities or QuickBooks Online for its ease of use, you won’t regret it. QuickBooks Desktop and QuickBooks Online are both great products that millions of small business owners rely on everyday to keep track of their day to day finances.