How To Convert QuickBooks Desktop to Online in 5 Steps
This article is part of a larger series on Accounting Software.
If you’d like to access your QuickBooks software from anywhere, it’s time to switch to QuickBooks Online. Converting from QuickBooks Desktop to Online is quick and easy most of the time, and if you get stuck, you can contact QuickBooks support for free. This guide will help you convert from QuickBooks Desktop Pro or Premier to any version of QuickBooks Online, except Self-Employed.
If you don’t have a QuickBooks Online account, you can choose between 50% off for three months or a 30-day free trial when you sign up.
Tip:
You have 60 days from the beginning of your QuickBooks Online subscription to make a conversion from QuickBooks Desktop. If 60 days have passed, you can cancel your current subscription and set up a new QuickBooks Online company. Multiple companies can be set up under the same email address.
Switching from QuickBooks Desktop to Online means that you’ll be giving up QBD’s inventory management features. As our overall best small business accounting software, QuickBooks Online offers good inventory features. However, it’s not as powerful as its desktop counterpart. If you’re a manufacturer that needs inventory management features in QBO, we recommend integrating it with Katana Manufacturing ERP.
Katana integrates seamlessly with QBO. Whenever you create manufacturing and purchase orders, Katana will feed this information to QBO to create accounting records. At the end of the time, you don’t need to manually sync them because all changes happen automatically.
Get Katana now to improve your experience with QBO. Katana offers a software bundle discount for QBO Plus at 50% off for the first year plus Katana Advanced. Get this bundle now to save more on your first year. Visit Katana to learn more about its features.
The steps discussed in this article are for converting a QuickBooks Desktop file to QuickBooks Online from QuickBooks Desktop Pro, Premier, and Accountant. For QuickBooks Mac, you can follow Intuit’s conversion instructions for that platform. If you use QuickBooks Enterprise, Intuit has conversion instructions for QuickBooks Enterprise.
Open your QuickBooks Desktop file, and press F2 to determine the total target count. If your file exceeds the maximum 350,000 targets, you can try to reduce the targets by condensing your QuickBooks file. If condensing doesn’t work, you’ll have to export specific data, such as lists and account balances.
Product information screen in QuickBooks Desktop
It’s best to update your QuickBooks file as much as possible prior to your conversion so that your bookkeeping is not behind as you’re trying to learn the new processes of QuickBooks Online. Make sure to reconcile all bank accounts, process payroll, and adjust inventory before getting started.
It’s also a good idea to back up your company file in case anything goes wrong. You can make a backup of the data file by going to File, then Back Up Company, and then clicking on Create Local Backup, as shown below:
Creating a backup company file in QuickBooks Desktop
Tip:
QuickBooks recommends your company file be located on a local drive before converting to QuickBooks Online. If you normally access the company file from a network drive, restore the backup file you just created onto your local drive and use that file for your QuickBooks Online conversion.
If you don’t have a QuickBooks Online account, then you need to create one. Visit QuickBooks Online and subscribe to your preferred version of QuickBooks Online prior to starting the conversion process. If you’re unsure which version is best for your business, read our QuickBooks Online version comparison. You can either sign up for a 30-day free trial or get a 50% discount for the first three months.
When setting up your QuickBooks Online account, you will be required to input your company’s information, such as business name, description, and type.
Setting up your QuickBooks Online account
Go back to your QuickBooks Desktop program and sign in to the company you are converting to QuickBooks Online. Within your QuickBooks Desktop company, click on Company in the top menu bar and select Export Company File to QuickBooks Online, as shown below:
Export your QuickBooks Desktop file to QuickBooks Online
When preparing your QuickBooks Desktop data for migration, QuickBooks will ask whether you want to export all your company information or you only need to export specific data, such as lists and balances. You may need to export specific data if you have more than 350,000 targets or your desktop file is corrupt.
Export all company files or only specific data
Since Our Last Update:
The previous QuickBooks Desktop version (2022 and earlier) has no option to export specific data unless you download each data individually from QuickBooks Desktop. For instance, if you wish to export your customers only, you must navigate to the Customer Center to export your customer list.
If you wish to export specific data, then you can choose to export all lists and account balances or export all lists only or selected lists like customers, vendors, and employees.
Export specific data, such as lists and/or account balances
After selecting the data to export to QuickBooks Online, your QuickBooks Desktop program will ask you whether to proceed to migrate your file or try it first. Since you’ve already created your QuickBooks Online company, click Move Now.
Preparing to move your data to QuickBooks Online
Indicate Whether You Want to Import Inventory Into QuickBooks Online
If you currently track inventory, QuickBooks will ask whether you want to import inventory into QuickBooks Online. If you say yes to this, your inventory will be recalculated in QuickBooks Online using the first in first out (FIFO) inventory method from the start date provided. If you’re unsure of whether you want to import your inventory, click “no.” You can import your inventory later from an Excel spreadsheet.
Identify whether or not to import inventory to QuickBooks Online
Tip:
If you change your inventory method from average cost to FIFO, it must be reported to the IRS on Form 3115. For that reason, we recommend consulting a tax professional before bringing over your inventory to QuickBooks Online.
If you want to avoid filing Form 3115 and keep using the average cost method for tracking your inventory costs, we recommend selecting “no” and then integrating your QuickBooks Online with Katana. Visit Katana to learn more about its integration with QuickBooks Online. If you’re worried about the implementation of Katana and QuickBooks Online, you can always ask for guidance during the implementation phase. Katana Advanced comes with a one-time implementation package for $600. You can ask the Katana team to help you integrate Katana with QuickBooks Online.
After identifying whether you want to import inventory to QuickBooks Online, QuickBooks will then ask you if you have a QuickBooks Online account. Since you already set up a QuickBooks Online account, select Yes, sign me in (not shown in a screenshot). Then, a login screen for your QuickBooks Online account will appear on your QuickBooks Desktop account.
After logging in to your QuickBooks Account successfully, select the QuickBooks Online company that you want the data to import to from the drop-down list. If you have multiple companies, be careful to select the correct one as the conversion will replace any existing data. If you don’t want to save it to an existing company, you can create a new company.
After you select your company, click Export, and QuickBooks will work for a few minutes and then give you a confirmation screen similar to this:
QuickBooks data file transfer confirmation
QuickBooks emails you when your QuickBooks Online company is ready, but this could take several hours for a large file. Once you receive an email indicating that the migration is successful, click on the Complete your setup button (not shown) to log in to QuickBooks Online and review your data.
What’s Not Imported When You Move From QuickBooks Desktop To QuickBooks Online?
While most of your data will import when switching from QuickBooks Desktop to Online, there are a few items that won’t convert, including:
- Bank and credit card account reconciliation reports: Once you convert to QuickBooks Online, you’ll need to start your reconciliations from where you last ended them. If you need access to prior reconciliation reports, you can still get them from your desktop version as long as you don’t delete the files.
- Recurring credit card charges: You’ll need to cancel your existing recurring credit card transactions in the Merchant Center. Once that’s done, rebuild them in QuickBooks Online by creating recurring sales receipts.
- Audit trail: There’s nothing you can do about your past audit trail other than retain a copy of your desktop version and the information contained in it. You will, however, get an improved audit trail with QuickBooks Online going forward.
- Inventory from QuickBooks for Mac: While you can’t transfer your inventory from a Mac computer, if you have access to a computer running Windows, you can make the transfer there.
- Reports: QuickBooks Online contains a variety of reports that can replace many of those you’ve been using in the desktop version. The best solution is to find a new QuickBooks Online report and begin using it.
Get Up To Speed With QuickBooks Online
Fit Small Business has created a free QuickBooks Online course that includes video tutorials and written step-by-step instructions. The good news is that you’ll be able to skip a few of the lessons because you’ve already imported much of your company’s data from QuickBooks Desktop.
Frequently Asked Questions (FAQs)
Can you use both QuickBooks Desktop and QuickBooks Online?
You cannot use QuickBooks Desktop and QuickBooks Online for the same company. QuickBooks Desktop and QuickBooks Online are two separate platforms that aren’t compatible with each other.
Why are companies switching from QuickBooks Desktop to QuickBooks Online?
Companies move to QuickBooks Online primarily because it’s more affordable than QuickBooks Desktop when there are multiple users. Also, they want the ability to access their company files remotely, collaborate with their team members easily, and integrate their accounting software with other third-party applications.
Is transferring from QuickBooks Desktop to QuickBooks Online worth it?
Yes, especially if you value affordability, cloud access, and integration with other applications. However, it does have some limitations, so make sure that you know the differences between QuickBooks Desktop and Online before migrating your data.
Wrap Up
Congratulations on successfully converting from QuickBooks Desktop to QuickBooks Online. Be sure to check out a few of our video tutorials to learn the basics of using QuickBooks Online.
