QuickBooks Online vs Desktop: How They Compare
The biggest difference between QuickBooks Online vs Desktop is that Online requires no installation on a computer and Desktop does. Product-based businesses with inventory needs typically work better with QuickBooks Desktop, whereas service-based businesses or businesses that use multiple devices typically choose QuickBooks Online.
Psst… If you want to get straight to the meat, my friend Woody Adams at Intuit has created an amazing comparison chart for us to see all the features in QuickBooks Online vs QuickBooks Desktop at once. Check it out here.
Although I have most of my clients on QuickBooks Online (seriously, all but one), I think it’s always important to revisit the conversation of the main differences of QuickBooks Online vs. QuickBooks Desktop.
For me, one of the biggest differences is that the one client I still have on QuickBooks Desktop is the one client I’m sure to visit every month. But hey, it forces me to put on pants and go out into the world and interact with other humans.
Today, there are more units of QuickBooks Desktop used by small businesses than QuickBooks Online. However, small businesses are flocking to the online version of accounting platform. Did you know that 80% of new QuickBooks users are choosing QuickBooks Online vs. QuickBooks Desktop?
You need to know the differences between QuickBooks Online vs. Desktop—whether you’re starting to use QuickBooks for the very first time or you’re a loyal Desktop user considering the change.
QuickBooks Online vs. Desktop: The Facts
While I think it’s important to recognize how Intuit’s emphasis on QuickBooks Online will mean that product will get better faster, leaving QuickBooks Desktop behind, you still have to ask yourself whether or not QuickBooks Online is the right product for you now.
To do this, let’s look at the facts. Where do the products differ? Where do they excel? Let’s find out:
QuickBooks Desktop Advantages
If I were to generalize where I think QuickBooks Desktop still holds a major advantage, I’d say managing large amounts of inventory and job costing. But I think it’s important to list out the differing features specifically.
QuickBooks Desktop still offers the following feature sets that QuickBooks Online does not. If you can’t live without any of the below, than QuickBooks Desktop is most likely best for you. Keep in mind that some of the features below are only supported in QuickBooks Premier and Enterprise, and notQuickBooks Pro.
- Price Levels
- Create Invoices in Batch
- Billing Rate Levels
- Batch Enter Transactions
- Batch Enter Timesheets
- Pay Vendors Online (ACH)
- Progress Invoicing/Billing
- Job Costing Module and Reports (Estimate vs. Actual reporting)
- Mileage Tracking
- Payroll job Costing/Labor Burden Costing
- Change Orders on Estimates
- Markup Column on Estimates
- Multiple Vendor Ship to Addresses
- Industry Specific Reporting
- Business Planner, Forecasting, Balance Sheet by Class
- Better Report Header and Footer Customization
- Average Cost Inventory Valuation Method
- Set and Maintain Inventory Reorder Points
- Receiving Partially Against Purchase Order
- Sales Orders
- Availability to Promise
- Build Assembles or Manufacturing Features
- Unit of Measure
- Backup and Restore Feature
- Condense File
- Period Copy
- Client Data Review tools
- Fix Unapplied Payments and Credits
- Clean-up Un-deposited Funds
- Fix Sales Tax
- QuickBooks Statement Writer
- No 1099 Feature for Simple Start and Essentials Client
- Cannot Post to Additional AR/AP Accounts
QuickBooks Online Advantages
Below are the features supported by QuickBooks Online that you can’t find in any version of QuickBooks Desktop:
- Automatically schedule and send transactions
- Attach documents, images, signatures & more to transactions using mobile device, or upload on your computer
- Use Audit Log to review actions and track changes over time
- Track by Location in addition to (or instead of!) by Class and choose from multiple location labels
- Relabel your customers if you call them something else! (7 options to choose from)
- Bank Transactions download automatically each night. You can also “Undo” (and in batch) an added, matched, or excluded transaction within the banking tool
- Custom Banking Rules can be made to split by $ or % and you can assign class/location within a rule
- Bank rules can be set to Auto-add to register
- Unlimited time tracking and reports only users
- Delayed Charges and Delayed Credits to create non-posting transactions that you can bill for or apply later
- Journal Entries can have multiple AR/AP lines
- Set up multiple budgets per fiscal year
- Use Management Reports to build a presentation ready package of reports from cover page to end-note
- Seamless integration with 3rd party apps
Now, on that last point…
There are obviously some gaps between QuickBooks Online vs. QuickBooks Desktop. As QuickBooks Desktop has been around longer, it’s more powerful. But there are many, many 3rd party apps that can help you fill those gaps. I strongly believe there’s an app answer to any small business owner who thinks QuickBooks Desktop works for them when QuickBooks Online doesn’t.
Of course, you may not want to pay for 3rd party apps, and that’s something you have to evaluate when comparing the two.
QuickBooks Online vs. Desktop: How Do You Decide?
I think the easiest way to make the decision between QuickBooks Online vs. QuickBooks Desktop is to first look at the features that QuickBooks Desktop has that QuickBooks Online doesn’t, and ask yourself:
Is there anything I can’t live without?
If you find something that you absolutely need in QuickBooks Desktop, see if there’s a 3rd party app that can do that for you with QuickBooks Online. But if there is no app, or you feel you’d pay too much to add apps and fill the gaps in QuickBooks Online, then QuickBooks Desktop might be for you.
Just remember: Intuit is notably investing more in their online products than their desktop products. Their online products will only get better and better. Not to mention, an online software is better in so many ways, whether for your own communication with your bookkeeper or accountant, your internal communication, or even saving money on file transfers or hosting.
Again, I know this isn’t always an easy question to answer (even if for me, it is!). Always consult with your bookkeeper or accountant before deciding, and if you’re not ready to make the change to QuickBooks Online now, prepare yourself that you’ll most likely have to make that change at some point in your business’s future.