Most people who have experienced moving from an old software system to a new one have the scars to prove it (myself included). If you’ve been a bit apprehensive about moving your data from QuickBooks Desktop to QuickBooks Online, this article was written with you in mind!
Before we get started, the process included in this article is for small businesses who currently use the Windows Pro/Premier version of QuickBooks Desktop. If you use QuickBooks Mac, follow these instructions and if you use the Enterprise version, you can find step by step instructions here.
Benefits of Converting Your Data from QuickBooks Desktop to QuickBooks Online
Here are just a few of the benefits if you import data to QuickBooks Online as opposed to starting from scratch:
1. Ability to Run Comparison Reports
Whether you’ve been in business for 12 months or a few years, one of the advantages to having access to historical data is that you can run reports to compare the current year to previous years.
2. Free of Charge
3. Start with a Clean Slate
Let’s say that your existing QuickBooks file has seen more than it’s share of bookkeepers who didn’t do such a great job with managing your books. You can export your customer, vendor and products & services lists from QuickBooks Desktop, provided the information is still reliable, and import these lists into QuickBooks Online. Once you have all of your lists imported, you can skip ahead to the Quickly Get up to Speed with QuickBooks Online section of this article.
To export a list from QuickBooks Desktop, display the list and click on the Excel icon located in the toolbar as indicated in the screenshot below:
Select “Export Customer List” as indicated below:
Note: In the above example we have used the customer list; you can follow these steps to export the vendor and products and services lists.
How to Convert from QuickBooks Desktop to Online: The 7 Steps
Here are the steps to convert Quickbooks Desktop to Online:
Step 1 – Check The File Requirements
- You can only import your data to QuickBooks Online within the first 60 days of the subscription start date. If you have had your QBO subscription for more than 60 days, then you have two options:
- Find a QuickBooks ProAdvisor who can convert files within the first 180 days of their subscription start date; OR
- Set up a new QuickBooks Online subscription and use a different email address.
- Verify total target count in QuickBooks Desktop. To do this, open your QuickBooks Desktop file and press F2. Total targets cannot exceed 350K for the import to work. In the example below, total targets is 25,642. Note: If your file exceeds 350K targets, you will get an option to import lists for customers, vendors and products and services along with account balances only.
Step 2 – Prepare Your Quickbooks Desktop Data For Export
Follow the steps below as a checklist to ensure your data is ready for export:
- Update your data – This is your opportunity to clean up your data. For example, if you have customers or vendors whose contact information needs to be added or changed, this is the time to take care of that.
- Complete outstanding tasks – Ideally, you should convert your data at the end of a month, quarter or year. With that said, make sure that all bank accounts have been reconciled, payroll has been processed and all inventory adjustments have been made prior to conversion.
- Backup your data – Before you take the steps to import your data into QuickBooks Online, make a backup of the data file. In QuickBooks Desktop, you will go to: File>Back Up Company>Create Local Backup as indicated in the screenshot below:
Step 3 – Create a QuickBooks Online Account
Provide Basic Company Info
Log out of your QBO Account
Click on the Gear icon (upper right hand corner), select Sign Out as indicated in the screenshot below.
Step 4 – Open QuickBooks Desktop
Step 5 – From the Company menu, select ‘Export Company File to QuickBooks Online’
Note: If you don’t see the “export company file to QuickBooks Online” option, you need to download the most recent update. From the Help menu, select Update QuickBooks as indicated in the screenshot below. Once the update has completed, close out of QuickBooks altogether and then log back in. Return to Step 2 above.
Step 6 – Sign Back Into Your QBO Account
Enter your user ID and password as indicated in the screenshot below.
Step 7 – Indicate Whether You Want to Bring Over Inventory
If you decide to bring over your existing inventory, there are a couple of things you should be aware of:
- QBO values inventory using the first in, first out (FIFO) method instead of the average cost method that QuickBooks Desktop uses.
- If you say “yes”, the value of each inventory item will be recalculated using the FIFO method as of the start date that you select in the above screen. Note: Be sure to consult with your accountant before you do this because they will have to report a change in inventory methods on your tax return.
Step 8 – Select your QBO Company
Select from the dropdown the QBO company that you want the data to import to. If you forgot to set up your account, click on the Create new QuickBooks Online company link and follow the on-screen instructions.
Step 9 – Data File Copy
You should see a notification similar to the one below once the process has began. The length of time this process takes is dependent on how large your file is.
Once your data file has been copied, you will see a notification similar to the one below. Click on the “Ok, got it” button and you can logout of QuickBooks Desktop or keep working. You will receive an email once your data is ready to review in QBO.
Once your data is ready, you will receive an email notification similar to the one below. Click on the “Complete your setup” button to log into QBO and review your data.
What to Do After Your Data Has Been Imported
Before you begin working in QuickBooks Online, you need to verify that your data was successfully imported. The best way to do this is to run a Profit & Loss statement and a Balance Sheet report in both QuickBooks Desktop and QuickBooks Online and compare the totals. For both reports, use the following parameters:
- All Dates
- Accrual method (even if you are a cash basis business, use the accrual method for these reports)
If you find a discrepancy when comparing your reports, contact Intuit at 1-800-638-8615 and they will troubleshoot the issue at not cost to you!
Quickly Get Up to Speed with QuickBooks Online
Now that you’ve verified your data imported correctly, it’s time for a crash course in QuickBooks Online! Fit Small Business has created a free QuickBooks Online course that includes a total of 39 video tutorials and written step by step instructions.
The good news is that you won’t have to complete all 39 videos since you converted your data as opposed to starting from scratch. With that said, I recommend that you complete the following lessons first:
- How to Setup Company Information
- How to Import Banking Transactions
- How to Manage downloaded Banking Transactions
- How to Import Credit Card Transactions
- How to Manage downloaded Credit Card Transactions
- How to Setup Multiple Users
In addition to setting up QuickBooks Online, we’ve also got video tutorials to help you run your business, on topics like managing banking transactions and credit card sales. You can access all the courses here for absolutely free.
Bottom Line on Converting from QB Desktop to QBO
Congratulations on successfully converting from QuickBooks Desktop to QuickBooks Online! Once you have had a chance to check out a few of our video tutorials, please let us know what you think! We would love to hear from you.