If you need to access your data away from the office or want to give users outside of your company access, it’s time to convert to a small business accounting software like QuickBooks Online. The good news is converting from QuickBooks desktop to online is so easy, you can do it yourself; if you get stuck, you can contact QuickBooks support for free!
Before we get started, the process included in this article is for small businesses that currently use the Windows Pro/Premier version of QuickBooks Desktop. Click here to get started for free with QuickBooks Online so you can follow along with the step-by-step instructions below.
Here are the nine steps to convert QuickBooks Desktop to Online:
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 the total target count in QuickBooks Desktop. To do this, open your QuickBooks Desktop file and press F2. Total targets cannot exceed 350,000 for the import to work. In the example below, the total number of targets is 25,642. Note: If your file exceeds 350,00 targets, you will get an option to import lists for customers, vendors and products and services along with account balances only.
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. To create a backup copy in QuickBooks Desktop, go to: File>Back Up Company>Create Local Backup, as indicated in the screenshot below:
3. Create a QuickBooks Online Account
In the next screen, you will enter basic contact information like email address, name and mobile number and password to get your QuickBooks Online account set up. As mentioned previously, if you have an existing QBO account, it has to be less than 60 days old in order for you to convert your data. If your account is more than 60 days old, you will need to create a new one.
Provide Basic Company Information
Log Out of Your QBO Account
Click on the Gear icon (upper right corner) and select Sign Out, as indicated in the screenshot below.
4. Open QuickBooks Desktop
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.
6. Sign Back into Your QBO Account
Enter your user ID and password, as indicated in the screenshot below.
7. Indicate Whether You Want to Bring Over Inventory
If you are managing your inventory in QuickBooks Desktop, it is currently valued using the average cost method. However, if you decide to bring the existing inventory into QuickBooks Online, it will be valued using the FIFO method, which may have a significant effect on the value of your inventory. Be sure to consult with your accountant before you bring over your inventory, because you will need to report a change in inventory method on your tax return.
If you say “yes” to the above question, 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. As noted above: 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.
If you don’t have an accountant and you are in a hurry to convert to QuickBooks Online, say NO to the above question. You can always import your inventory from an Excel spreadsheet once you have a chance to consult with an accountant.
8. Select Your QBO Company
Select the QBO company that you want the data to import to from the drop-down list. If you forgot to set up your account, click on the “create new QuickBooks Online company” link and follow the on-screen instructions.
9. Data File Copy
You should see a notification similar to the one below once the process has begun. The length of time this process takes is dependent on how large your file is. If you don’t have a lot of data, this could take just a few minutes but if you do have a large file, it could take several hours.
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 log out of QuickBooks Desktop or keep working.
Once your data is ready, you will receive an email saying your data is ready to review in QBO, similar to the one below. Click on the “Complete your setup” button to log into QBO and review your data.
At this time, there are some features that are not available in QuickBooks Online. If you still need any of the following features, we do not recommend that you convert to QuickBooks Online:
- Sales Orders
- Fixed Asset Tracking with Fixed Asset Manager
- Price Levels
- Estimate to Actual Reporting
- Price Levels
- Estimate to Actual Reporting
Benefits of Converting Your Data from QuickBooks Desktop to QuickBooks Online
There are several benefits of converting your data from QuickBooks Desktop to QuickBooks Online. If you’ve been in business for at least a year, you want to be able to access the existing financial data of your business so that you can run comparison reports in QuickBooks. Second, the Intuit support team will do the heavy lifting for you.
All you have to do is complete a few steps to prepare your file for conversion. The third reason is if your QuickBooks data has become unreliable because it was set up improperly or not maintained, you can start with a clean slate.
Listed below are three benefits of importing data to QuickBooks Online:
1. Gain the 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.
It’s important to be able to run comparison reports so that you can compare the current year to the previous to see trends in income and expenses. Having access to this information will help you to make decisions that could impact the future of your business.
2. Make the Conversion to QuickBooks Online Free of Charge
3. Start with a Clean Slate
Let’s say that your existing QuickBooks file has seen more than its share of bookkeepers who didn’t do such a great job with managing your books. You can export your customer, vendor, and products and 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.
To import data to QuickBooks Online, check out the following three video tutorials:
- How to Setup Customers – Convert QuickBooks Desktop to QuickBooks Online
Instead of manually entering customers, you can import all the email addresses, telephone numbers, addresses and other contact details into QuickBooks.
- How to Setup Vendors – Convert QuickBooks Desktop to QuickBooks Online
Similar to customers, you can import vendor contact details like email address, telephone number and mailing address into QuickBooks.
- How to Setup Products and Services – Convert QuickBooks Desktop to QuickBooks Online
Importing your existing list of products and services is a piece of cake. We’ll show you how to import the cost, quantity and detailed description of each product/service that you sell.
Before we go into the steps of how to convert QuickBooks Desktop to Online, why not sign up for QuickBooks Online here so you can follow along with the step-by-step instructions below.
What to Do After You Import Data to QuickBooks Online
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 (Note: 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 the Intuit support team at 1-800-638-8615 and they will troubleshoot the issue at no 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 Set Up Multiple Users
In addition to setting up QuickBooks Online, we also have video tutorials to help you run your business, including topics like managing banking transactions and credit card sales. You can download the entire QuickBooks Course for free.
Frequently Asked Questions (FAQs) About Switching from QuickBooks Desktop to Online
Below we have included answers to the most frequently asked questions about switching from QuickBooks desktop to online. If your question is not listed here, please head over to our Fit Small Business forum and post your question there. Many small business owners like yourself, along with attorneys and CPAs, post questions and answers every day.
Some of the most frequently asked questions about switching from QuickBooks Desktop to Online are:
Can You Use Both QuickBooks Desktop and QuickBooks Online?
Unfortunately, you cannot use QuickBooks Desktop and QuickBooks Online for the same company. QuickBooks Desktop is software that must be installed on your computer, and the company files that you create will be stored locally on your hard drive or network.
QBO is a cloud accounting software that does not require software installation. Instead of your QuickBooks data being stored on your computer or network, the data is stored in the cloud. This means that there is no way to connect QuickBooks Desktop to QuickBooks Online, which is why you cannot manage your books using both products at the same time.
Can I Import QuickBooks Desktop to QuickBooks Online?
Yes, you can import data to QuickBooks online. In this article, we have provided you with the nine steps to import your QuickBooks desktop data to QBO. In addition, Intuit has created a short. 2.5-minute video on how to import QuickBooks desktop to QBO.
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 will not convert to QuickBooks Online.
The items that will not import from QuickBooks Desktop to QuickBooks Online and what you can do about them are:
- Bank/Credit Card Account Reconciliation Reports:
Once you convert to QBO, you will 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 it.
- Recurring Credit Card Charges:
You’ll need to cancel your existing recurring credit card transactions in the Merchant Center. Once that’s done, you’ll need to rebuild them in QBO. This is done by building them as a recurring sales receipt.
- Audit Trail:
There is nothing you can do about your audit trail from the past other than to retain a copy of your desktop version and the information contained in it. You will, however, get an improved audit trail with QBO on a go-forward basis.
- 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.
QBO 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 QBO report and begin using it.
How Do I Upload a Company File to QuickBooks Online?
The steps outlined in this article essentially allow you to upload your company file to QBO. However, the QBO support team must take the data and put it in a readable format before you can use it, which is why it is not immediately available once you complete the final step.
Bottom Line on Switching from QuickBooks Desktop to Online
Congratulations on successfully converting from QuickBooks Desktop to QuickBooks Online! Once you’ve 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.