Businesses that use QuickBooks often ask about the differences between QuickBooks Desktop and QuickBooks Online (QBO), which was introduced in 2000. My response to that inquiry is that they are different products and fit different situations. Identifying which features are needed from the software will determine which option is best.
It is important, primarily, to understand that, although QuickBooks Desktop and QBO share the name “QuickBooks,” they are not related. QBO is not a web-enabled copy of the Desktop version. The two products vary in database structure and problem-solving approach. If the programs’ developers had named them “ABC Desktop Accounting” and “123 Online Accounting,” users would avoid the understandable confusion.
Intuit, the software developer, has made significant improvements to QBO since rebuilding it in 2013, which has renewed the discussion about QuickBooks Desktop versus QBO. Understanding the differences between Desktop and QBO will help businesses choose the best software for their needs.
Key Differences Between QuickBooks Desktop vs QuickBooks Online
1. Remote Access
Because QBO is cloud-based, users can access their files from anywhere an internet connection is available, including a PC or MAC laptop, smartphone, or tablet.
Users can only access Desktop from a computer with the installed software, regardless of internet access. However, purchasing a subscription to third-party software, such as LogMeIn, grants access to a desktop computer remotely from another location.
QBO offers a free 30-day trial so there is no initial fee to try it. There is a monthly subscription for the software, and Intuit offers a discounted subscription for the first three months. However, Intuit does not offer these rates upon the acceptance of the 30-day trial. For users who oversee the books and records of multiple businesses, each entity requires a separate subscription.
Desktop requires the purchase of the software upfront but offers a 60-day money back guarantee if you are not satisfied (also available with QBO). After purchasing the software, you can create a multitude of company files at no additional cost. Intuit supports the Desktop software for three years. After this period, users need to purchase an upgrade to continue using QuickBooks support, Intuit Payroll, and Intuit Merchant Services.
3. User Access
Included with the QBO subscription is access for three users in QBO Essentials and five users in QBO Plus. For an additional cost, up to 25 users can be in QBO Plus simultaneously. Every subscription includes two accountant users, which grant an outside accountant access to the company file, eliminating the need to send backup files to the CPA. Limited access users may access to the QBO file for time tracking and reporting only without counting against a company’s total number of users.
For the Desktop software, Intuit requires the purchase of a license for each user. Only three users can simultaneously access a company data file in the Pro version, and up to five users can be in a Premier data file at a time. Similar to QBO, user profiles can be created allowing limited or full access to areas within QuickBooks.
4. Reporting Options
In my opinion, the reporting features found in QBO are not as advanced or user-friendly as the Desktop software. In QBO, it is difficult to filter and customize reports that pull specific information. Although both software packages allow the customization of filters for future application, Desktop offers the following reports that QBO is lacking: job reports, industry-specific reports, and the voided/deleted transaction report, which is tremendously helpful.
5. Feature Comparisons
The Desktop software has several features that are not available in QBO, such as the ability to prepare sales orders, track mileage, and undo previous bank reconciliations. In general, Desktop allows greater freedom to customize forms and reports. Woody Adams, A QuickBooks Product Specialist with Intuit, has compiled and maintained a detailed listing of comparisons, which is found here.
Intuit is notably allocating more resources to the improvement of their online products than their desktop products. With the last release of the Desktop software, the new features introduced were quite basic. Intuit’s emphasis on QBO indicates that the product will receive improvements with greater frequency, potentially leaving QuickBooks Desktop behind, yet migrating to QBO still has to make sense for businesses in order to make the switch.
Data files can easily be converted between Desktop and QBO; therefore, those currently using Desktop can transfer data to QBO when it becomes the better fit for the business. Likewise, a transfer of data from QBO to Desktop can be performed seamlessly.
By Andrea Reynolds, QuickBooks ProAdvisor