QuickBooks Online is an accounting software designed to help small businesses manage assets, liabilities, equity, income, and expenses while Excel is a spreadsheet program intended for data organization, analysis, and visualization. You can use QuickBooks Online for accounting right out of the box while in Excel, you have to have the expertise and time to set up the spreadsheet to mimic accounting software capabilities.
In our expert opinion, QuickBooks Online is a useful tool for daily accounting without the hassles of spreadsheet formulas and syntax. However, Excel is more valuable if you want to do a deep dive into data analysis, use advanced formulas and statistical methods, and create charts and graphs for data visualization.
 |  | |
|---|---|---|
Main Purpose | General accounting and financial reporting | Data organization, analysis, and visualization |
Best For | Invoicing, reconciling bank accounts, tracking unpaid bills, and financial reporting | Creating graphs and charts, generating amortization schedules, and budgeting |
Accessibility | Cloud | Cloud or Desktop |
Maximum Users | 1 to 25 | 1 to 6 |
Cloud Version Pricing | $35 to $235 monthly | $6 to $22 monthly |
Desktop Version Pricing | N/A | $159.99 for one PC or Mac |
When To Use
QuickBooks Online vs Excel: Pricing
QuickBooks Online vs Excel: Accounting Functions
Accounting Function | Which Is Better | Why It’s Better |
|---|---|---|
Reconciling Bank Accounts | QuickBooks Online | You can import bank statements, match transactions, and spot missing items in the reconciliation easily. |
Issuing Invoices | QuickBooks Online | It offers great customization options that are easy to use. Users can send invoices directly from within QuickBooks Online and track outstanding invoices with a few clicks. |
Tracking Unpaid Bills | QuickBooks Online | Since billing shares the same concept as invoicing, QuickBooks Online is better for bill tracking. Users can create purchase orders and service items for recording purchases of goods and services. |
Tracking Cost of Goods Sold (COGS) | Depends | Excel offers more flexibility in computing COGS, ending inventory, and cost per unit of inventory in exchange for more manual work. In QuickBooks Online, COGS tracking is automatic, but you can’t generate inventory schedules using various inventory costing methods. |
Creating Amortization Schedules | Excel | It can compute loan amortizations easily; QuickBooks Online doesn’t have this feature. |
Managing Projects | Depends | Both can be used for managing projects; they have features that enable you to manage project tasks, income, expenses, and billings. |
Computing Taxes | Excel | It can compute taxes as long as you know how taxes are computed. However, you still have to assemble the computations from scratch since Excel has no built-in tax functions. QuickBooks Online will track income and expenses for your tax return but doesn’t compute taxes. |
Generating Financial Reports | Depends | QuickBooks Online offers an easier solution since you can generate reports from its predefined report titles. But with Excel, you can customize reports further by using its formatting features. Another option is to export a QuickBooks report to Excel for further customization. |
Creating Charts & Graphs | Excel | It is known for its charts and graphs. You can use it to create graphs and export source data from QuickBooks Online. |
Creating Budgets & Forecasts | Depends | If you’re using QuickBooks Online Advanced, you can use Spreadsheet Sync to connect QuickBooks and Excel. However, if you want to use advanced forecasting models in budgeting, Excel is the better pick. |
It may seem odd to compare QuickBooks vs Excel features, given that QuickBooks Online is designed for small business bookkeeping while Excel is a programmable spreadsheet program. While QuickBooks Online’s A/R and A/P capabilities are outstanding, Excel’s customizability and capacity for forecasting make it ideal for creating different business scenarios.
Performing bank reconciliations in QuickBooks Online is easier than in Excel. In QuickBooks Online, you can easily import bank statements, match reconciling items, and generate bank reconciliation reports with a few clicks. It will also show you if bank and book balances still don’t agree after all adjustments. If that’s the case, you can save reconciliation for now and go to other modules in QuickBooks Online to record missing transactions that affect the reconciliation.
In Excel, it is possible to perform bank reconciliation—but everything will be manual. You’ll first need to input bank statement data manually or copy and paste it from a comma-separated values (CSV) file. Afterward, you’ll have to create a worksheet where you’ll reconcile transactions.
Note that it’s important that you have a solid grasp of bank reconciliation procedures and concepts if you’re using Excel. However, if you’re planning to perform a four-column bank reconciliation or proof of cash, Excel is the only choice because QuickBooks Online can’t perform that kind of bank reconciliation. Check out our bank reconciliation Excel template that you can use for simple reconciliations.
Our expert opinion: For monthly bank reconciliation, we recommend that you do it with QuickBooks Online. It’s far more convenient than doing it manually in Excel. But if you want to take bank reconciliation to the next level, you can perform a proof of cash in Excel, which is helpful in detecting fraud and cash flow problems.
Invoice tracking in QuickBooks Online is as convenient and simple as filling out a form. As seen in the image below, you just need to supply the needed information and you’re good to go. QuickBooks Online will record this information in all accounts and records affected by this invoice entry.
Tracking Invoices in QuickBooks Online
In Excel, it’s possible to collect and track invoice information—but it will be hard. First, Excel will be your invoice database that will house all invoice information. Second, you need to code a special form that will collect invoice information. Part of coding would be designing the form. And lastly, you’ll need to create pivot tables to get meaningful information from invoice data.
However, we have designed an Excel invoice tracking template that you can use to track unpaid invoices. This template has no special code or forms but it has pivot tables that you can use to filter invoice data.
Our expert opinion: It’s easier to do invoicing with QuickBooks Online since it can capture and process a lot of information with a few clicks. If you’re a small business, invoicing tracking via Excel would be unproductive and inefficient.
Just like invoicing, recording and tracking unpaid bills is also a breeze in QuickBooks Online, especially when compared to Excel. Recording Bills in QuickBooks Online shares a similar concept with invoicing, so we’re not going to be digging into details here. Overall, you just need to fill out the bill form and QuickBooks Online will do the rest once you click “Save.” The image below shows the bill form of QuickBooks Online.
Paying Bills in QuickBooks Online
In Excel, more work and a little bit of coding are needed to create a data collection form and database. But if you want to skip that part, our Excel bill tracking template can help you track unpaid bills using pivot tables.
Our expert opinion: Similar to invoicing, it’s easier to handle billing in QuickBooks Online. But for simple and minimal tracking, Excel can be a temporary solution.
QuickBooks Online doesn’t have a comprehensive inventory management module that gives you full control over inventory and cost of goods sold (COGS). It can compute COGS for every sale and track inventory units for purchases and sales. QuickBooks Online’s Plus plan uses the first-in, first-out (FIFO) method in inventory costing, and you must upgrade to QuickBooks Online Advanced if you want to use average cost.
Tracking COGS in Excel requires many manual entries but it can provide more tracking options than in QuickBooks Online. With Excel, you need to create a separate sheet per inventory item that will track purchases, COGS, and ending inventory balance. Our Excel COGS template does this using the average cost method.
However, if you prefer to use other methods like FIFO or last-in, first-out (LIFO), significant modifications in cell formulas are needed. A person with intermediate to advanced Excel skills—along with an understanding of the various cost-flow assumptions—should handle this task.
Our expert opinion: Due to QuickBooks Online’s limited functions, Excel offers more flexibility in how you track purchases, COGS, ending inventory, and inventory cost per unit. The trade-off with Excel would be extensive data entry and spreadsheet management. However, if you have intermediate Excel skills, COGS tracking won’t be difficult as long as you know how the spreadsheet formulas work.
Loan amortization is something that QuickBooks Online can’t do. Excel is your only option here in computing amortization because it has functions for ordinary annuity or annuity due for present value computation. Our Excel loan amortization template computes your monthly payments, principal amortization, and interest payments throughout the period of your loan.
Our expert opinion: Excel takes the reins here since QuickBooks Online can’t compute amortization. However, creating an amortization in the schedule requires an understanding of the time value of money and mastery of time value of money functions in Excel.
QuickBooks Online has built-in project accounting features that let users create project estimates, track income and expenses per project, and manage labor costs in projects. By turning on projects on QuickBooks Online, you can create projects, add customers to projects, and enter project-specific transactions. With timesheets, you may also track time spent on project tasks and report accurate labor hours.
Excel has a different take on project accounting. It may not be similar to how QuickBooks Online handles project accounting, but Excel is a good option for creating detailed spreadsheets that track project tasks, budgets, and costs. Some teams use Excel as a project management tool, though it can be tedious to maintain and inefficient for larger teams. If you’re also in the market for project management tools, see our list of the best project management software for our recommendations.
Our expert opinion: We recommend using both QuickBooks Online and Excel for project accounting and management. QuickBooks Online will handle client billing while Excel will handle budgeting and task tracking. You can create detailed trackers in Excel and maximize its conditional and data validation functions to effectively track project finances and progress.
In terms of taxation, QuickBooks Online has no built-in feature that will help you compute federal and state taxes, except for entering sales taxes on invoices. The least help that QuickBooks Online can do is to give you reports that’ll help you fill out tax returns. Excel can handle tax computations given that you know how taxes are calculated in the first place because it doesn’t have built-in tax functions.
Our expert opinion: Neither QuickBooks Online nor Excel can provide a quick and easy solution for computing taxes.
QuickBooks Online has a built-in reporting module that allows you to create reports from a set of predefined report titles. QuickBooks Online lets you modify how reports are presented such as the report title, subtitle, period covered by the report, and the number formatting.
However, you can’t change the design, formatting, and overall presentation of financial reports. The image below shows a Profit and Loss sample report.
Example of Income Statement in QuickBooks Online
Excel, being a spreadsheet program, is very flexible in creating reports. It is one of Excel’s bread and butter. You can manipulate report designs, presentations, and formatting easily. However, the main hurdle with Excel would be getting the data for the reports. You can either export CSV files from accounting software or copy-paste these data into your Excel spreadsheet.
Our expert opinion: Excel is better at financial reporting but requires a lot of manual work, especially in assembling the data and designing the report. Though tedious, you will get your desired report designs and presentations that QuickBooks Online can’t do because of its limited report customization capabilities. Our recommendation is to use QuickBooks Online only for simple, internal reports and shift to Excel for creating detailed and comprehensive financial reports and schedules.
Charts are something that’s outside the scope of QuickBooks Online. It does have graphs—but they’re part of the software itself and users can’t change it. Excel is still the best choice for creating custom charts and graphs, depending on how you would like to visualize data.
Our expert opinion: We recommend that you use QuickBooks Online as a data source and Excel as the tool that you use to create custom charts and graphs.
QuickBooks Online’s budgeting features are simple. It doesn’t have incremental functions or trend analysis that’ll help you create budgets based on multiple variables that may indicate future performance. With Excel, it’s possible to create complex budgets, but it would require expertise and a lot of manual work.
Our expert opinion: For small businesses, simple budgeting in QuickBooks Online would suffice. But if you want to have complex budgets that involve growth rates, time value of money, and trends, Excel is capable of performing those calculations.
QuickBooks Online vs Excel: Ease of Use & Customer Support
QuickBooks Online | Excel via Microsoft 365 | |
|---|---|---|
Difficulty | Medium | Medium to High |
Accounting Skills Needed | Basic to Intermediate | Expert |
Unlimited Support | ✓ | |
Community Support | ✓ | |
Email Support | ✓ | |
Live Chat Support | ✓ | ✕ |
Phone Support | ✓ | |
Searchable Knowledge Base | ✓ | ✓ |
Online Help Resources | ✓ | ✓ |
There’s no comparison when it comes to customer support options, as QuickBooks Online is by far superior in this category. You can speak with someone over the phone or connect via live chat or a chatbot. There’s also a vast database of resources for further reading, such as accounting blogs, setup guides, community forums, and troubleshooting tips. If you have critical bookkeeping needs, you might consider finding a QuickBooks ProAdvisor.
Getting support for Excel depends on whether you’re subscribed to Microsoft 365 for Business; support may be limited for personal or family plans. However, there are tons of Excel tutorials available on YouTube and Microsoft 365’s support page in case you need quick help.
Frequently Asked Questions (FAQs)
For bookkeeping, yes, QuickBooks Online is much easier to set up and use than Excel. Excel requires a thorough knowledge of both bookkeeping and formulas to create the necessary journals, ledgers, trial balances, and financial statements that are key to a bookkeeping system.
Yes, you can export reports within QuickBooks Online as an Excel spreadsheet or a PDF.
You can purchase one Excel license for a PC or Mac for $159.99 or sign up for Microsoft 365, which includes Excel, for a starting price of $6 per user, per month.
Bottom Line
QuickBooks Online and Excel are vastly different, but with a little customization and maintenance, Excel can be an adequate accounting system—as long as you have the time to devote to it. However, our recommendation is that you use QuickBooks for your core bookkeeping processes and Excel for creating supplemental schedules, reports, and graphs.
