Deciding which version of QuickBooks is right for you can be confusing. If you’re a product based business with complicated inventory needs, you should go with QuickBooks Desktop. However, if you’re a service-based business or one that needs access from multiple computers, then QuickBooks Online is your best choice.
While desktop has more features, QuickBooks Online is always adding new features and frequently running promotions where you can save up to 50%.
QuickBooks Online vs QuickBooks Desktop
| QuickBooks Desktop | QuickBooks Online |
|---|---|
| Installs on Computer | No Installation |
| No need for Internet Connection | Requires Internet |
| Can only use from 1 device | Access from any device |
| One-Time Fee | Monthly fee |
| Get started with QuickBooks Desktop | Get started with QuickBooks Online |
Now let’s explore these differences to help you determine which product will work best for your small business.
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 or does not have complicated invoicing requirements. QuickBooks Online is best for companies that want access from multiple devices, have more than one person who needs access, as well as those that desire automatic updates from the cloud.
You should ultimately consider QuickBooks Online if you want 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 updated in real-time.
When to Consider QuickBooks Desktop
QuickBooks Desktop is generally the best solution if you are a product-based business that needs inventory tracking options and batch invoicing. There are also industry-specific desktop versions that are great for contractors, manufacturers, wholesalers, retailers, and more. However, the desktop version can only be accessed from one device.
You should ultimately consider QuickBooks Desktop if you want the following:
- 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 are 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.
QuickBooks Online vs Desktop Summary Table
| Features/Benefits | ||
|---|---|---|
| Retail Cost | ||
| Software Install Required | ||
| Software Updates | ||
| Automatic online backup and protection of your data | ||
| Access data from multiple platforms (Mac & PC) | ||
| Access data from anywhere at anytime | ||
| Unlimited free technical support | ||
| Automatic access to the latest version of QuickBooks | ||
| 60-Day money back guarantee | ||
| 30-Day risk-free trial available | ||
| Sample company file test drive available | ||
| Multiple inventory tracking options | ||
| Industry-specific versions |
QuickBooks Online vs Desktop Primary Differences
The primary differences between QuickBooks Online and QuickBooks Desktop are:
1. 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).
2. 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.
3. 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.
4. 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.
5. 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.
6. 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.
7. Sample Company File Test Drive
With QuickBooks Online, you’ll get access to a sample QuickBooks Online company file that already has QuickBooks data in it. You are able to navigate through the program and practice entering transactions.
Desktop is a little different. Once you download your free trial of QuickBooks Desktop; you will have access to several sample company files for multiple industries. You can practice entering transactions without using your own company file.
8. 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.)
9. 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.
10. 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
QuickBooks Online (QBO) is a monthly subscription that runs between $15-$50, whereas Desktop is a one-time cost between $299-$1100. At first glance, you might think QBO costs more than desktop; but remember that you always have access to the latest features of QBO without upgrading; to access new desktop features you must pay to upgrade your software.
QuickBooks Online Product Comparison Chart
| Feature | |||
|---|---|---|---|
| Monthly Retail Cost | |||
| Number of Users | |||
| Accounts Payable | |||
| Inventory |
QuickBooks Online 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 number of users but also in the following 2 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 for Simple Start or Essentials.
QuickBooks Desktop Product Comparison Chart
| Feature | ||||
|---|---|---|---|---|
| Retail Cost* | ||||
| Number of Users | ||||
| One-click reports | ||||
| Create business plan using your QB data | ||||
| Industry-specific versions |
*Note: Although Quickbooks Desktop is a one-time purchase, you will need to purchase an upgrade at least every 3 years to continue using Quickbooks support, Intuit Payroll, and Intuit Merchant Services.
QuickBooks Premier and Enterprise offer 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 products in order to take advantage of the industry-specific features that are not available in QuickBooks Pro or QuickBooks Mac:
- General business
- Contractor
- Manufacturing & Wholesale
- Professional Services
- Retail
- Nonprofit
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. Unfortunately, Intuit has decided to discontinue QuickBooks Mac which we will discuss next.
Discontinuation of QuickBooks Mac Desktop
Intuit has recently decided to discontinue QuickBooks Mac but will continue to support the 2016 version through May 31, 2019. If you are currently using QuickBooks Mac, we recommend you consider switching to QuickBooks Online. If you need inventory and 1099 tracking, go with QuickBooks Online Plus; otherwise, go with QuickBooks Online Essentials. Check out QuickBooks Online Comparison to learn more about the features included in each subscription.
Ease Of Setup: QuickBooks 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; provided you don’t have any historical information to bring over.
Importing Your Bank Account Transactions to 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 setup 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 setup may take about 1-2 hours, depending on whether or not you are bringing data over from another accounting system.
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 up front and complete the in-depth setup process. The more in-depth setup 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:
- Left icon bar that you can customize with your favorite shortcuts:
- 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 Online vs Desktop
If you need help with QuickBooks Online or Desktop, there are several options to choose from:
In-Product Help
In-product help options are resources available within both QuickBooks Online and QuickBooks Desktop under the Help menu:
- Knowledge Base (Help menu) – This is one of my favorite resources because it’s 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.
Be sure to check out 39 Free QuickBooks Online Tutorials by Fit Small Business. This is a free course that includes both video & written step by step instructions. Best of all, it’s free!
Phone & Chat Support
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 to help you determine whether to use chat support or 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.
Certified Advisers
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.
Check out how to find a QuickBooks Proadvisor for tips on what to look for when hiring a QuickBooks Pro.
How To Get Started with QuickBooks Online
If you’d like to try QuickBooks Online before you buy it, you’ve got a couple of options:
1. 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.
2. Sign Up For a 30-Day Risk-Free Trial
A free trial (sign up here) 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 after the trial period has ended.
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. To get your business up and running quickly, check out our free QuickBooks Course. It includes step by step instructions to help you get your business set up in no time.
How to Get Started with QuickBooks Desktop
QuickBooks Desktop does offer a free trial option. You can sign up here to access a full version of QuickBooks Enterprise for 30 days. Remember, 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.
QuickBooks Online vs Desktop: Which Is Better?
There has been (and continues to be) a debate as to whether or not the cloud version of QuickBooks is better than the desktop version. The desktop version has been around since the 1990s, long before software over the Internet was common. Currently, QuickBooks Desktop has a few more features and functionality when you compare it to the online version.
However, new features are constantly being added to the online version and there are features available in online that are not available in desktop, like giving access to multiple users so they can access your data from anywhere in the world.
Unfortunately, many bookkeepers and CPAs have chosen not to embrace the online version. In my opinion, this is a mistake. As a result, many small businesses who recognize the fact that the cloud is the future not only for QuickBooks but for most software used in business like Microsoft Office are having to replace their accountant/bookkeeper.
The most important thing that you can do is to select the software that will work best for your business. Based on your list of nice to have vs. need to have features, which product is going to work best for your business? Whether you go with the online version or the desktop version, it’s important to find a QuickBooks Pro who is certified in QuickBooks so that you can be confident your books are in the hands of an expert.
Bottom Line: QuickBooks Online vs Desktop
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 every day to keep track of their day to day finances.
If you decide to go with QuickBooks Online, be sure to check out our free QuickBooks Course to learn how to set things up. You can also sign up for a free 30 day trial of QuickBooks Online.
Susan
We are beginning operations for an LLC that maintains solar fields. We have 3 principals in the company and will initially have 10 fields that we operate. We’ll need to invoice our client, receive payments, pay vendors for equipment rentals, fuel, etc. and pay our 1099 contractors. All expenses will need to be allocated by field. Need the ability to issue Form 1099’s at the end of the year. There’s a possibility we’ll set up another LLC for other operations later on down the road. Considering the above and the comments below, which would be best for us – online or desktop?
1. From the comments above, only Desktop allows for multiple companies under the same license?
2. Does only the Plus online version ($50/month) have the ability to print 1099’s at the end of the year? Can you print 1099’s with the Desktop version?
3. Which payroll function (Desktop or Online) allows you to allocate to locations (our fields)?
4. How much does the Desktop upgrade cost recommended every 3 years cost?
Thanks!
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Hi Susan, congratulations on your new business! I have re-posted your questions below along with my responses to each one:
Question:From the comments above, only Desktop allows for multiple companies under the same license?
Answer: Yes, this is correct. You can set up several companies in Desktop with one license. At this time, it is not possible to set up more than one company under the same account with QuickBooks Online.
Question: Does only the Plus online version ($50/month) have the ability to print 1099’s at the end of the year? Can you print 1099’s with the Desktop version?
Answer: Both QuickBooks Online Plus and QuickBooks Desktop Pro, Premier and Enterprise have the ability to track, report and print 1099 forms.
Question: Which payroll function (Desktop or Online) allows you to allocate to locations (our fields)?
Answer: Both products will allow you to set up multiple locations (fields). In Desktop, you would have to use a function called class tracking and in QuickBooks Online they have class tracking and also location tracking available.
Question: How much does the Desktop upgrade cost recommended every 3 years cost?
Answer: The cost to upgrade every 3 years really depends on which version of QuickBooks Desktop you are using. In general, the upgrade cost is usually in the ballpark of the amount you paid when you first purchase the software. If you decide to purchase QuickBooks Online or Desktop you can save a few bucks by clicking on any of the QuickBooks Online or Desktop links in our articles.
I recommend that you check out this article that compares/contrasts all of the QuickBooks Desktop versions. I think it might be helpful in making your decision.
Link to QuickBooks Desktop article:https://fitsmallbusiness.com/quickbooks-pro-vs-premier-vs-enterprise-vs-accountant/
Once you’ve made your decision, it would be great to hear which product you decided to go with and why.
All the Best
Crystalynn Shelton
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Dean
I’m in the process of starting my own bookkeeping service and am trying to decide between QuickBooks Online or QuickBooks desktop. It sounds like if I go with the online version I will have to pay the $15 -$50 monthly fee per company that I provide my services to. Is this correct?
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Hey Dean!
Congratulations on your new bookkeeping business. So the most economical approach is to sign up for a free QuickBooks Online Accountant. It is 100% free for accountants and bookkeepers. You can use the software to manage your clients work as well as keep track of your bookkeeping for your practice. You can also sign up new clients through QuickBooks Online Accountant and you can choose to have Intuit bill you and then you can bill your client or you can have them bill your client directly for their QBO accounts.
I would also recommend that you consider adding on the Desktop membership. There is one for $349 per year (which you can pay monthly) and you get access to free software as well as discounts that you can pass onto your desktop clients. I’ve been a QuickBooks ProAdvisor for over 10 years now and it has been worth every penny!
I wrote an article on this entire process so check back with us next month to see if it has been published or follow me on Twitter (@CrystalynnPens) because I always post my articles within a few days of when they publish. In the meantime, reach out again if you have any questions about the ProAdvisor program. You can sign up for the free QBOA and learn more about the program by clicking the link below: https://quickbooks.intuit.com/accountants/?sc=Intuit.com&s_ev1=Intuit.com_Footer_QBAccountants
Best of luck,
Crystalynn Shelton, CPA
@CrystalynnPens
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Alejandro
Hi. I’m a long-time Quickbooks Desktop user, and just wanted to point out a couple of things some people may find important. First, you say the Desktop version only runs on one device, which isn’t completely accurate. I use the Pro version, which supports up to three users (as you show in one of your tables above). The multi-user support is indeed true multi-user, supporting access to the same data file from multiple computers at the same time. There are a few restrictions on this – some payroll and admin functions require temporarily switching to single-user mode – but most features work in multi-user mode. Worth noting, however, they do charge more for the 2- or 3-user licenses. Even if you only have the basic license for one user, you can still set up the software to allow access from multiple computers, as long as only one is accessing it at a time. On a technical note, the shared data file cannot be stored on a simple network storage device. You have to have it on a computer set up as a Quickbooks server running Windows. I don’t know whether this supports access from a Mac, but it definitely works in an all-Windows environment. Of course, the Online version also supports multiple users, as long as you buy multi-user licenses. I’m simply pointing out that you CAN access the Desktop version from multiple computers on the same network.
Second, if you run multiple businesses, you’ll find that the Desktop version is much more cost-effective. Desktop supports unlimited number of companies (one company per data file), while the online version only supports one company per license. So, if you own/operate multiple companies, you can use one Desktop license for all of them, but you’d need separate licenses of Online for each company. That’s huge for some of us! Please note that this only applies to the core Quickbooks program, not the payroll module. Payroll is tied to the employer’s tax IT (EIN), so you’ll need separate licenses of payroll, whether you use desktop or online. That said, the core product isn’t cheap, so you still save money with the desktop version.
Hope this helps!
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Alejandro
Oops, typo! I meant Tax ID, not tax IT. Perhaps a kind moderator could update that for me? Thanks!
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Bridgette
you are obviously pushing QBO – your comment about the lack of QBO features is evasive and misleading stating they are adding all of the time rather than addressing substantial lack of features. Also the availability issue is simply solved by hosting. While QBO has some redeeming features it simply does not come close to desktop on features or navigation. I think you are misleading the public as it is inappropriate for many businesses.
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Hi Bridgette,
Thank you for your feedback. I’m going to respectfully disagree with you. I am not biased towards QuickBooks Online or Desktop. I believe that you should use the accounting software that will best serve your small business. This is the reason why I have written articles that compare QuickBooks Desktop to the Online product. In addition, we also have an article that is solely dedicated to comparing all of the desktop version of QuickBooks.
I teach a QuickBooks Desktop course to students every quarter and I agree that it is a much more robust product than Online. However, that is not to say that QuickBooks Online is not a good product because it is. Millions of small businesses use QBO and they love it. I have also recommended QuickBooks desktop to many of our readers in this very forum. As I always tell any prospective client, go with the software that meets the needs of your business.
If you have the opportunity, check out our most recent article on QuickBooks desktop products:
https://fitsmallbusiness.com/quickbooks-pro-vs-premier-vs-enterprise-vs-accountant/
Thank you for reading our articles and for your feedback.
Have a great weekend!
Crystalynn Shelton
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Han
Hi Crystallyn,
We are a retail store, we have inventory need to be tracked. We usually make PO/SO/Invoice/Sales Invoice which is related to inventory management. And also, we need QB to calculate COGS based on FIFO. Can QBO do all of these? When Sales invoice is created, QBO will do the Revenue and AR and at the same time, it also does COGS accordingly, is that right? QBO will do COGS automatically or I have to do it manually?
Thanks.
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Hi Han,
You can definitely create purchase orders and invoices. It will also automatically calculate COGS using the FIFO method. However, I don’t think they have added sales orders. There might be a workaround for this but you would need to contact Intuit support to double check that. When any transaction is created QuickBooks will take care of all the debits and credits behind the scenes so you won’t have to manually calculate anything.
We have designed a free QuickBooks Course that will walk you through how to set up an account and learn how to do all of the transactions like create invoices and set up inventory in QuickBooks. I have included a link to the course below along with an article that I wrote on how to convert from QuickBooks Desktop to QuickBooks Online. You can also sign up for a discount on your QuickBooks online account, just go to this link: https://fitsmallbusiness.com/goto/quickbooks-online/
QuickBooks Course:https://fitsmallbusiness.com/how-to-set-up-quickbooks-online/
How to Convert from Desktop to QuickBooks Online:https://fitsmallbusiness.com/convert-quickbooks-desktop-to-online/
Let me know how it goes.
All the Best-
Crystalynn Shelton
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