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QuickBooks Desktop VS. QuickBooks Online. 10 Main Differences

Blog Posting:

QuickBooks desktop used to be way ahead of QuickBooks Online in terms of features and usability. As we’re learning in my QuickBooks courses, that’s no longer true. A few years ago, it was easy to decide between the desktop and online versions of QuickBooks. That is quickly changing. I emphasize in my QuickBooks training courses in the QuickBooks Desktop (Pro/Premier/Enterprise) version, but I also mention that the online version has evolved into a serious competitor.

But the desktop versions – especially Premier and Enterprise — can still hold their own. Here are some areas where they differ:

  1. Online Only features

Being web-based gives QuickBooks Online an edge. It’s faster. It’s automatically upgraded. And it integrates with other applications more easily.

In my QuickBooks courses, I explain that the two versions share many similarities in terms of their bookkeeping abilities, but QuickBooks Online was designed to take advantage of the web’s strengths. Here’s one of the best examples of its innovation: the Income List

Some of my  QuickBooks training class attendees have commended on liking this easily-understood view.  This is not available on the Desktop version!

  1. Transaction tracking (Classes and Location Tracking)

QuickBooks Online goes beyond classes with its location tracking. You can assign a department, division, store, etc. to each transaction. This helps you correctly calculate profitability and work with related groups of transactions.  I really wish that the desktop versions had this second dimension of tracking other than Classes.  Additional Transaction tracking provides greater depth of reporting and data filtering.

  1. Online Banking

As I’ve explained in my QuickBooks training courses, the ability to download bank and credit card transactions in QuickBooks Online and match them to existing ones requires much less typing and minimizes errors. Both versions can do this, but web-based users are far more likely to use online banking, according to Intuit.

 Transaction downloading is much more popular in QuickBooks Online.

  1. The App Center (3rd Party Applications)

Because the desktop versions are much older, they’re supported by hundreds of integrated apps that go beyond the software’s abilities in areas like inventory-tracking, job costing and billing. QuickBooks Online has fewer than 50.

  1. Reports

Here again, QuickBooks desktop is superior, offering around 40 more reports than its online counterpart.  Reports more popular in the Desktop versions are typically with Job/Project costing and Inventory.

Desktop QuickBooks has the edge when it comes to reports.

  1. Inventory Management

QuickBooks Online was the first to introduce FIFO inventory costing, and even in the Desktop version to get this feature requires you to jump to the more costly Enterprise with Advanced Inventory.  But, although the Online version had the edge in this particular area, other Inventory management features such as detail inventory reports, fast inventory adjustments, and sales orders with the ability to backorder is the more powerful of the two for heavier inventory users

  1. Fast and Easy Multiuser / 100% Cloud Based

Where QuickBooks Online can be easily upgraded to handle 25 users on the fly all seamlessly and 100% cloud based… QuickBooks Pro is limited to 3 users, QuickBooks Premier Limited to 5 users, and QuickBooks Enterprise to 30 users.   QuickBooks Desktop will generally be a larger upfront investment for different licenses plus additionally it will require more complex setup and infrastructure to allow users to work remotely.

  1. Automated Backups

QuickBooks Desktop requires you to create periodic backups and there is an optional subscription to make it online or cloud based.  QuickBooks Online is always backing up in real-time and behind the scenes.

  1. Costs

QuickBooks Online is going to have virtually no upfront costs and is based on monthly averaging between $12.95 to $79.95 monthly based on features and number of users.  QuickBooks Pro retails at $249.99 through QuickBooks Enterprise 30-User $8,000, plus Advanced Inventory feature that is $1,000 annual fee.  The average QuickBooks Desktop user upgrades (purchases new version) every 3 years.  QuickBooks online is a much smaller commitment and the preferred method for people getting started.  Updates to QuickBooks Online are always enabled to all users vs. upgrading QuickBooks Desktop typically will have a cost component.10.10.   

10. Popularity & Support

The amount of people using the software will have an impact on available support by consultants and accountants.  Additionally the more users actively working on the program, the more available help you will see online.  The are a bit over 300,000 QuickBooks Online users vs. over 5 million QuickBooks desktop users… you do the math

Either version of QuickBooks could serve you well. Because they’re becoming more alike than different, your choice depends on costs and partly on whether you prefer to work “in the cloud” or access QuickBooks from your hard drive.   However, I do have to disclaim that I have had many clients that were not a fit for the Online version because of Inventory Management and Reporting Capabilities.  I will also disclaim that I personally use the Desktop version for my business and I am very unlikely to switch to the online version any time soon.  I am still “old school” from this perspective and feel more confortable with the Desktop version; I do not want to persuade you to choose one or the other, just want to illustrate some differences to make your decision easier.

Hector Garcia, RTRP
QuickBooks ProAdvisor & Registered Tax Return Preparer
QuickBooks Training Courses, South Florida

Hector Garcia CPA and QuickBooks/Excel Trainer

Hector Garcia CPA and QuickBooks/Excel Trainer

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