QuickBooks Desktop vs. Online: Which Should You Use?

What is QuickBooks?

QuickBooks is one of the best accounting software platforms on the market. It’s widely used because it can handle income and expenses, invoicing and payments, tax deductions and more for businesses of all sizes, including self-employed professionals. It also includes useful tools many competitors lack, such as integrated advanced time tracking.

There are two main versions of QuickBooks: QuickBooks Desktop and QuickBooks Online. These platforms differ significantly. QuickBooks Desktop, which can be installed locally or hosted remotely, offers unique features suited to specific business needs. In contrast, QuickBooks Online operates entirely in the cloud, providing remote accessibility and distinct integrations and tools.

Currently, new customers can choose only one QuickBooks Desktop package: QuickBooks Desktop Enterprise. QuickBooks Online has five versions: Solopreneur, Simple Start, Essentials, Plus and Advanced.

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QuickBooks Desktop vs. Online: The similarities

Despite their differences, QuickBooks Desktop and QuickBooks Online also have plenty of overlap in their essential core functions. All versions include the following functionality: 

• Import and organize transactions from bank and credit card accounts (PayPal and Square integrations are available only in QuickBooks Online)
• Invoice creation
• Estimate and quote creation
• Invoice payment acceptance (In QuickBooks Online, invoices can include an embedded payment link through the QuickBooks Business Network for direct, seamless payments.) 
• Real-time invoice tracking
• Categorize business expenses for tax purposes
• Create reports
• Capture receipts via optical character recognition with expense category matching
• Charge and track sales tax (sync with Amazon, eBay and Shopify via third-party apps for Online and via an add-on for Desktop Enterprise)
• 1099 contractor management 
• Inventory management (Desktop Enterprise has more advanced inventory options, while Online editions rely on third-party add-ons for marketplace syncs and Excel imports)
• Time tracking 

Both QuickBooks Desktop and QuickBooks Online are especially well regarded for the following capabilities:

• Tax compliance
• Cash flow and expense tracking
• Business budgeting
• Ability to accept online payments
• General reporting features

QuickBooks Desktop vs. Online: The differences

Here are some of the key differences between QuickBooks Desktop and QuickBooks Online.

Features

The primary differences between QuickBooks Desktop and QuickBooks Online lie in the accounting software features offered. The online version has several helpful components that aren’t available in QuickBooks Desktop. 

Here are some of the features exclusive to QuickBooks Online:

• Attach documents, images and signatures to individual transactions from mobile and desktop devices
• Audit logging to track actions and changes over time
• Automatic nightly synchronization of bank transactions
• Auto-add banking rules for streamlined categorization
• Customize banking rules based on dollar value, percentage, class and location
• Journal entries with multiple accounts receivable and accounts payable (AR/AP) lines
• Transform management reports into presentations
• Schedule and send future transactions with delayed credits and charges
• Support for multiple budgets during a fiscal year
• Transaction scheduling and dispatch automation
• Unlimited time tracking and reports-only users

Conversely, many classic QuickBooks Desktop tools are not available in the online version. These Desktop-only tools fit neatly into five categories.

1. Accounting:
   • Back up, restore and condense data and company files
   • Correct unapplied credits and payments
   • QuickBooks Statement Writer (add-on package for Generally Accepted Accounting Principle compliance)
   • Client data review tools
   • Post to multiple AR/AP accounts
   • Manage undeposited funds 
   • Correct sales tax amounts
   • Create period-specific accounts
2. Reporting:
   • Industry-specific reporting options
   • Customize headers and footers on reports
   • Support multiple vendor ship-to addresses
   • Business planners, balance sheets and class-based forecasting
3. Data entry:
   • Batch invoicing, transactions and timesheets
   • Rate-level billing
   • Automated clearing house payments to vendors
4. Inventory:
   • Manufacturing features and assembliesInventory reorderingPartial receipt against purchase ordersAverage cost inventory valuationManage sales orders, unit measures and availability-to-promise
   • Charge orders and markup estimate columns
   • Calculate payroll and labor costs
   • Job costing reports comparing estimates and actuals

If you’re a QuickBooks Online user who wants these Desktop features, many third-party apps offer them for an extra charge. 

Hosting

• QuickBooks Desktop: QuickBooks Desktop is hosted locally. Users are limited to one hosting provider — the computer on which the software is installed — or a handful of licensed computers. You may not be able to access the software if you can’t use a device where it’s installed.
• QuickBooks Online: QuickBooks Online is hosted in the cloud. After you enter a valid username and password, you can access it from any internet-connected device, including a mobile device with the QuickBooks Online app installed. Because QuickBooks Online is cloud-based, it’s an excellent option for those who need QuickBooks access from outside the office.

Payment model

• QuickBooks Desktop: In the past, desktop QuickBooks products were available for a one-time payment and packaged as a CD. Now, QuickBooks Desktop packages are available only on an annual subscription basis and can be downloaded from the internet.
• QuickBooks Online: QuickBooks Online operates on a monthly subscription model. The price varies based on the service tier you choose.

QuickBooks Desktop vs. Online: Service tiers and pricing

QuickBooks currently offers one active service tier for new Desktop users (Enterprise) and five for QuickBooks Online.

QuickBooks Desktop service tiers and pricing

As of 2024, Intuit discontinued sales of most QuickBooks Desktop products for new customers, except for the Enterprise version. Existing Desktop users will retain support access and can renew their subscriptions through 2025. However, some third-party resellers may still have older versions of QuickBooks Desktop available for purchase.

Here are details about QuickBooks Desktop Premier Plus (discontinued for new users) and QuickBooks Enterprise:

Several factors will influence your final cost for QuickBooks Desktop Enterprise, including the number of users, optional add-ons and whether you install the software locally or choose a cloud-hosted solution. The software is billed annually, but some cloud hosting providers may offer monthly billing for hosting services.

QuickBooks Online service tiers and pricing

Here’s a look at the current QuickBooks Online offerings:

Should you use QuickBooks Desktop or QuickBooks Online?

For those still trying to decide, here’s the bottom line: 

You should use QuickBooks Desktop if…

• Your business prefers working offline and doesn’t require constant internet access.
• You want to purchase the software with a one-time annual fee rather than a monthly subscription.

You should use QuickBooks Online if…

• You prefer cloud-based accounting for easy access from anywhere on multiple devices.
• You need automated features like bank feeds, mobile invoicing and real-time collaboration.
• You prioritize monthly payments and more affordable options. 

Mike Berman and Max Freedman contributed to this article.