If you’re currently using QuickBooks Desktop and you’d like to access your files from anywhere, it’s time to convert QuickBooks Desktop to Online. When converting from QuickBooks Desktop to Online, you have to check the file size of your QuickBooks Desktop company file to ensure it meets the requirements for the conversion. Also, you have to review your data and decide what information you want to move to QuickBooks Online.
In this guide, we’ll show you how to convert from QuickBooks Desktop Pro, Premier, and Accountant to any version of QuickBooks Online, except Self-Employed. For QuickBooks Mac and QuickBooks Enterprise users, you can check out Intuit’s website for conversion instructions.
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.
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.
Step 1: Check the File Size Requirements
Open your QuickBooks Desktop file, and press F2 to determine the total target count. If your file exceeds the maximum 750,000 targets, you can try to reduce the targets by condensing your QuickBooks file. To do so, click File, select Utilities, and then Condense Data. You can condense data while keeping all transactions or removing selected items. If condensing doesn’t work, you’ll have to export specific data, such as lists and account balances.
Note that condensing your file isn’t reversible, so we strongly recommend reconciling all accounts, printing all necessary reports, and backing up your company file before condensing.
Step 2: Prepare Your QuickBooks Desktop Data for Export to QuickBooks Online
Before you convert QuickBooks Desktop to Online, we recommend updating your QuickBooks files so that your bookkeeping is not behind while you’re learning the new processes in 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.
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.
Step 3: Prepare to Export Your Company File to QuickBooks Online
Click on Company in the top menu bar and select Export Company File to QuickBooks Online, as shown below:
QuickBooks Desktop will display a prompt where you can get started with the migration process. If you’re ready to move your desktop files to an existing QuickBooks Online account, click Get Started.
If you don’t have one yet, you may click See your data in a 30-day free trial, and QuickBooks will provide you with a 30-day free trial period so you can see how the platform works with your existing information. You can use this trial period to explore how your files appear in QuickBooks Online and whether you are comfortable with the platform.
QuickBooks will then ask whether you want to export all your company information or you only need to export specific data, such as lists and balances. Generally, we recommend exporting all company information, but you may need to export only specific data if you have more than 750,000 targets or your desktop file is corrupt.
Additionally, you need to indicate 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 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 Manufacturing ERP. 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. To help you decide if it’s right for you, read our detailed review of Katana Manufacturing ERP.
Step 4: Sign In to Your QuickBooks Online Account or Create a New One
After selecting which data to move to QuickBooks Online, you’ll be prompted to sign in to your QuickBooks Online account where you want to migrate your files. If you have an existing account, click Sign me in and then select Continue to proceed. Click No, I need to create one if you need to set up a new company file.
When you click No, I need to create one, QuickBooks Online will take you to the QuickBooks Online product page. You can select from four different versions, all of which allow for conversion. If you’re unsure which version is best for your business, read our QuickBooks Online plans 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.
If you already have an account, click Yes, sign me in, and you will be asked to log in to your account. QuickBooks will show a list of your QuickBooks Online companies, and from here, select the specific QuickBooks Online company to which you intend to move your desktop file. Click the Export button (not shown) to continue.
Step 5: Export Your Data to QuickBooks Online
After clicking Export, QuickBooks will work for a few minutes and then display a screen like this:
Step 6: Check Email for 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 to log in to QuickBooks Online and review your data.
If you want to keep using the same interface that you’re used to in QuickBooks Desktop, then you can install the QuickBooks Online desktop app. It has all the features of QuickBooks Online but with additional benefits, such as the option to switch to an interface similar to QuickBooks Desktop and stay logged in for six months. QuickBooks will provide a link to download the app after completing the migration process. Learn more by reading our article about what the QuickBooks Online desktop app is.
When To Move from QuickBooks Desktop to QuickBooks Online
If you are an existing QuickBooks Desktop user, you might want to switch to QuickBooks Online, our overall best small business accounting software, when:
- You manage your own books or you’re working with remote accountants: QuickBooks Online is more convenient and easier to use than QuickBooks Desktop, making it ideal for do-it-yourself (DIY) accounting. Also, since it’s cloud-based, you can easily share files with your accountants, whereas with Desktop, you have to create and send an Accountant’s Copy to your bookkeeper, which is also acceptable but not as straightforward as file sharing in QuickBooks Online.
- You need to track expenses and send invoices on the go: QuickBooks Online has a mobile app that allows you to perform various accounting tasks from your mobile devices, including tracking income and expenses and sending invoices. This makes it suitable for business owners who frequently work out of their offices. QuickBooks Desktop also has a mobile app, but it’s only for capturing receipts and tracking mileage.
- You anticipate business growth and you need a scalable solution: QuickBooks Online provides four scalable subscription options. You can select a plan based on the features and users you need—meaning as your business grows and needs additional features, you can easily upgrade to a more suitable plan. QuickBooks Online Plus, the most popular plan, supports up to five users, while the highest plan, Advanced, allows up to 25. Meanwhile, Enterprise supports up to 40 users, but each seat requires an additional fee, so it’s essentially more expensive than QuickBooks Online.
- You require ample integration with third-party business apps: QuickBooks Online integrates with more than 750 apps while QuickBooks Desktop has only around 200. This means QuickBooks Online is better for those who tend to use various third-party tools to handle various aspects of their business, like CRM, e-commerce, and industry-specific applications.
To learn more about the differences between the two solutions, see our QuickBooks Online vs QuickBooks Desktop comparison guide.
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)
You cannot use QuickBooks Desktop and QuickBooks Online for the same company. QuickBooks Desktop and QuickBooks Online are two separate platforms that are incompatible with each other.
Companies transfer from QuickBooks Desktop to 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.
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.
Congratulations on successfully converting from QuickBooks Desktop to QuickBooks Online. Be sure to check out our free QuickBooks tutorials to learn the basics of using QuickBooks Online.