QuickBooks Desktop vs. Online: Which Should You Use?
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Many business owners are familiar with Intuit QuickBooks. That’s because it’s one of the leading accounting software programs for managing payroll, operations, accounts receivable and numerous other financial functions.
Despite the platform’s ubiquity, however, many business owners remain uncertain about the differences between QuickBooks Desktop and QuickBooks Online. Here, we’ll detail everything you should know about the two versions, including their core functions, pricing tiers, hosting location, extra features and latest updates.
What is QuickBooks?
QuickBooks is one of the most widely used and top-rated accounting software programs on the market, in part due to its vast capacity for handling income and expenses, invoicing and payments, tax deductions, and more for businesses of all sizes — even self-employed people. Its prominence also stems from its inclusion of tools its competitors lack, such as integrated advanced time tracking.
There are two main versions of QuickBooks — QuickBooks Desktop and QuickBooks Online — and there are many differences between them. In particular, the QuickBooks Desktop platform, which is either installed locally or hosted remotely, offers different functions than the QuickBooks Online cloud computing version, which is fully remote.
>> Learn More: Accounting Mistakes Your Small Business Should Avoid
QuickBooks Desktop vs. Online: The similarities
Despite their differences, QuickBooks Desktop and QuickBooks Online also have plenty of overlap. Here’s a look at how these two QuickBooks accounting software options stack up.
Essential core functions
There are two versions of QuickBooks Desktop (Premier Plus and Enterprise) and four versions of QuickBooks Online (Simple Start, Essentials, Plus and Advanced).
QuickBooks Desktop Pro, Pro Plus and Premier are no longer sold, although unsold copies may still be available at authorized vendors for a limited time. QuickBooks is encouraging all existing Desktop clients to migrate to QuickBooks Online as soon as possible.
All versions of QuickBooks offer similar essential functions, including the following:
- Import and organize transactions from bank and credit card accounts (PayPal and Square integration on Online only)
- Invoice creation
- Estimate and quote creation
- Accept payment from an embedded invoice link (through QuickBooks Business Network on Online only)
- See the status of invoices in real time
- Categorize business expenses for tax purposes
- Create reports (more reports on Desktop Enterprise and most Online versions)
- Capture receipts via OCR with expense category matching
- Charge and track sales tax (sync with Amazon, eBay and Shopify on Online only via third party apps or via add-on for Desktop Enterprise)
- 1099 contractor management
- Inventory management (more inventory features for Desktop Enterprise and Excel imports/marketplace syncs via third-party add for Online editions)
- Time tracking (sync with QuickBooks Time Elite via add-on for desktop versions)
Learn more about the time tracking capabilities in our full review of QuickBooks Time.
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
Multiple tiers
Both QuickBooks Desktop and QuickBooks Online offer multiple service tiers that cater to different business needs, such as the number of employees who need to access the software. We’ll go into more detail on this later.
QuickBooks Desktop vs. Online: The differences
Here are some of the key differences between QuickBooks Desktop and QuickBooks Online.
Features
The main areas of difference between QuickBooks Desktop and QuickBooks Online lie in the accounting software features offered. The online version has several useful components that QuickBooks Desktop doesn’t. Here are some of the features exclusive to QuickBooks Online:
- Attach documents, images, signatures and more to individual transactions from both mobile and desktop devices
- Audit logging for tracking actions and changes over time
- Automatic nightly synchronization of bank transactions
- Auto-add banking rules
- Customize banking rules based on dollar value, percentage, class and location
- Journal entries with multiple accounts receivable and accounts payable (AR/AP) lines
- Turn management reports into presentations
- Scheduling and sending of 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 can’t be found in the online version. These Desktop-only tools fit neatly into five categories.
- Accounting:
- Ability to back up, restore and condense data and company files
- Correct unapplied credits and payments
- QuickBooks Statement Writer (add-on package for GAAP compliance)
- Client data reviewing
- Ability to post to extra AR/AP accounts
- Undeposited fund management
- Correction of sales taxes
- Create accounts for a specific time period
- Reporting:
- Industry-specific reporting options
- Header and footer customization on reports
- Support for multiple vendor ship-to addresses
- Business planners, balance sheets and forecasting by class
- Data entry:
- Batch invoices, transactions and timesheets
- Rate-level billing
- Automated Clearing House payments to vendors
- Inventory:
- Ability to build manufacturing features and assemblies
- Inventory reordering
- Partial receipt against purchase orders
- Value inventory using the average cost
- Management of sales orders and invoice tracking, unit measures and availability to promise
- Job costing:
- Ability to charge orders and change/markup estimate columns
- Payroll and labor cost calculation
- Reports for job costing estimates and actual amounts
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 is hosted locally, while QuickBooks Online is hosted in the cloud.
This means that QuickBooks Desktop users are limited to one hosting provider — the computer on which the software is installed — or a handful of licensed computers. QuickBooks Online can be accessed from any internet-connected device, including a mobile device with the QuickBooks app installed, after you enter a valid username and password.
Because QuickBooks Online is cloud-based, it is a great option for those who need QuickBooks access while not in the office. QuickBooks Desktop is often limited to the number of installations included in your chosen service tier, so you may not be able to access the service if you can’t access the specific device with the software installed.
One-time vs. monthly purchases
Before the launch of QuickBooks Desktop 2022, the QuickBook products were available as a one-time purchase. Now, Premier Plus and Enterprise packages are available on a subscription-basis only.
QuickBooks Online, on the other hand, is a monthly subscription. How much you’ll pay for each service depends on the service tier you buy.
QuickBooks Desktop vs. Online: Service tiers and pricing
You can choose from two QuickBooks Desktop tiers and five QuickBooks Online tiers.
QuickBooks Desktop service tiers and pricing
QuickBooks Desktop will be discontinued on May 31, 2023. After that date, you won’t be able to access QuickBooks add-on services like Online Banking, Online Backup, Live Support and QuickBooks Desktop Payroll Services from any version of the desktop software.
Only Desktop version users who don’t use any add-on apps will be unaffected.
Version | About | No. of Users | Best For | Cost |
|---|---|---|---|---|
QuickBooks Desktop Premier Plus | Best suited to companies that require inventory management functionality. Includes unlimited customer support and automated data backup as well as forecasting and industry-specific features | Up to five | Companies with extensive inventories of physical products to store, sell and track, especially if the products differ by category | $799 per year |
QuickBooks Desktop Enterprise | Allows users at multiple locations access to the company file | Up to 40, plus advanced roles | Manufacturing and wholesale, nonprofit, contractors, retail, accountants and professional services | Between $1,281 and $2,664 for on-premises; and between $206 and $275 per month for cloud solution |
Several factors will influence your final cost for QuickBooks Desktop Enterprise, including the service tier you choose, the number of users you add, and whether you install software locally or opt for a cloud-based hosting provider. Local installations are billed annually, while hosted solutions are billed monthly.
If you made a one-time software purchase of QuickBooks Desktop, support for the 2021 edition will end in May 2024. For 2020 copies, support ends in May 2023, and for 2019 copies support has already ended, according to QuickBooks.
QuickBooks Online service tiers and pricing
Version | Features | No. of Users | Best For | Cost |
|---|---|---|---|---|
Self-Employed | Tracks income and expenses, capture and organize receipts, estimate quarterly taxes, run basic reports, and track miles | One, with one external user, such as an accountant | Sole proprietors, independent contractors, freelancers, consultants and other self-employed individuals with basic accounting software needs | $15 per month for basic bookkeeping, $25 with the addition of TurboTax Self-Employed and $35 with TurboTax Live Self-Employed |
Simple Start | Income and expense tracking, invoice sending and payment acceptance, estimate sending, receipt capture and organization, mile tracking, sales and sales tax tracking, tax deduction maximization, Basic reporting, and 1099 contractor management | One | Small businesses that need only one user | $30 per month |
Essentials | Everything in the Simple Start plan, plus bill management and client/project cost billing | Up to three | Smaller, service-based businesses that invoice clients for time | $55 per month |
Plus | Everything in the Essential plan, plus project profitability tracking and inventory tracking and management | Up to five | Businesses with several budgets, projects, employees and contractors to track | $85 per month |
Advanced | Everything in Plus plan, as well as Excel plug-in, expense management, batch entering of checks and invoices, automated approvals and reminders, customizable workflows, continuous and automatic backup, online training, and access to the QuickBooks account team | More than five | Larger businesses with multiple revenue streams | $200 per month |
The first QuickBooks product was called Quicken. Launched in 1983, it was originally aimed at individuals looking to manage their money better.
Frequently asked questions about QuickBooks Desktop vs. Online
Does QuickBooks Online sync with your QuickBooks Desktop version?
No. QuickBooks Desktop and QuickBooks Online are separate platforms that do not sync with each other. However, in addition to its mobile app, QuickBooks Online has a desktop app. Any info you enter into the QuickBooks Online desktop app will sync with your cloud-based QuickBooks platform if your computer is connected to the internet.
What’s the difference between the QuickBooks Online and QuickBooks Desktop integration?
Both QuickBooks Online and QuickBooks Desktop can integrate with over 650 cloud-based apps. QuickBooks Online integrates with many other software platforms, such as PayPal and Square, but these platforms do not always have desktop versions. That’s why QuickBooks maintains a list of apps for QuickBooks Desktop that you can use to determine which desktop apps you can pair with your Desktop software.
However, please note that access to add-on services will be discontinued for all QuickBooks Desktop software after May 31, 2023.
Can you switch from QuickBooks Desktop to QuickBooks Online?
Yes, you can switch from QuickBooks Desktop to QuickBooks Online. Your data will be transferred from QuickBooks Desktop to QuickBooks Online, but not all of the data will copy seamlessly. Visit the QuickBooks guide to switching from Desktop to Online to see precisely which data points do not convert.
It’s important to note that QuickBooks Desktop and QuickBooks Online are two separate products, and data in the two versions do not automatically sync. A company should work with either QuickBooks Desktop or QuickBooks Online to avoid data discrepancies.
Can you buy QuickBooks Enterprise without a subscription?
No. All QuickBooks Enterprise plans are available only via monthly or annual subscriptions, depending on your plan.
However, if you need access to add-on services to replicate some or all of the features of QuickBooks Desktop software, you may wish to explore QuickBooks Online options instead. That’s because access to online apps for Desktop users is being discontinued after May 31, 2023.
Which QuickBooks product is best for your business model?
Until Intuit’s announced that they were no longer going to support QuickBooks Desktop products after May 2023, this was a hard question to answer. Every business has its own needs and demands that make one accounting software version or the other a better fit.
The online version will soon be the only available version, and it’s used by hundreds of thousands of American businesses. To find out what we thought about it, please check out our review of QuickBooks Online 2023.
Max Freedman contributed to this article.
