QuickBooks Online VS QuickBooks Desktop : Which Is Better?

February 27, 2020

 

Before I get started on this article, I want to set a few things straight. While my first love was QuickBooks® Desktop, I started using QuickBooks 99 while I was doing my articles in an Accounting Firm. Since its first version in 1998, every year Intuit launched updated desktop editions and most recent and updated versions are  QuickBooks Desktop Pro 2020 , QuickBooks Premier 2020 and QuickBooks Desktop Enterprise 20.0. Along with QuickBooks Desktop, now a days Intuit is also offering QuickBooks Online (QBO)

 

When the same company offers two good accounting software products, how can you choose between them? That’s the question when it comes to QuickBooks Online and QuickBooks Desktop.

 

QuickBooks Online, or QBO, is Intuit’s cloud-based accounting product. QBO was launched in 2004, and while the software was initially far less developed than the reigning QuickBooks Desktop, Intuit has made serious strides with this product and is constantly adding new features and small business services to improve their software. QuickBooks Online (QBO) is a cloud-based application, meaning it’s not installed on one specific computer and can be accessed anywhere from any device (Windows, Mac, Android, Iphone etc) having an internet connection. However, QuickBooks Desktop is installed on the computer you choose, and can only be accessed from that hard drive. 

 

Jill Ward, Intuit’s senior vice president and general manager of the Accounting Professionals Division, recently said Intuit will never force customers to move from QuickBooks Desktop to a new platform QuickBooks Online.  She used the chocolate and peanut butter analogy (One is not better than other; they are more like Chocolate and Peanut Butter. Great on their own, but together, they’re special.…) and I think it’s perfect. 

 

Traditionally, I think QuickBooks consultants and QuickBooks ProAdvisors  have always instinctively looked first to the Desktop editions when trying to determine what to recommend to a client, and have actually avoided QuickBooks Online (QBO) altogether. Now QuickBooks Consultants and ProAdvisors have also realised that QBO is also getting the power and features to meet requirements of the clients on Accounting Software. 

 

We’re going to focus on features in this article. For a comprehensive feature 

Features in QuickBooks Online but not in QuickBooks Desktop

 

What many people don’t know about are the features that QBO does better than Desktop.

  • Invoice/Sales Receipt Automation – While Desktop has memorized transactions, they still have to be sent to the customer manually. QBO’s counterparts, “recurring transactions,” can be set up to be emailed automatically to the customer and the QBO user/owner can be copied on each one. 

  • No Need to Transfer Data or Share Computer Time – Because you can access your client’s QBO data by being invited as an accountant user and signing up for QuickBooks Online Accountant, there’s no need to transfer backup files, Accountant Copy files or try to arrange to login to your client’s computer. You and your clients can both work whenever you need to, without worrying what the other is doing, with always on, anywhere access.

  • Your Client Always Has the Latest Version – QBO users always have the latest and greatest. You don’t have to scramble to reinstall a version of QuickBooks Desktop or try to talk a client into upgrading.

  • Delayed customer charges/billing – Desktop has unbilled time and expenses, but again, the user still has to manually go in and bill the customer for them. In QBO, you can turn on a preference to tell the program to do this automatically, any time activity is assigned on a daily, weekly, monthly or yearly basis. QBO can remind the user to do it or automatically create an invoice for the unbilled time and expenses. Depending on your preference, you can tell the user via a message on the home page or not tell the user; it’s your choice.

  • Activity Log – Desktop has the Audit Trail, which tells us when a transaction was created, modified or deleted. QBO does this better. The activity log shows when a user logs in, logs out, edits a customer, vendor, item or account. It shows when a third-party add-on accesses the data, when bank transactions are downloaded, and when those transactions are matched or added to registered. 

  • Automatic email reporting – Another great one! Memorize a report in QBO, add it to a group, and then set that group to be emailed to yourself or your client on a regular basis. For example, you can send your clients their financials each month without ever actually logging into QBO! The best part is that the email “from address” is the user that set it up. 

  • Bank transactions automatically downloaded nightly – In Desktop, the process of downloading bank transactions into QuickBooks has to be initiated manually, and if we’re doing this for our clients, we have to have their password. In QBO, the client can set up the connection, and QBO goes out each night and automatically pulls in the transactions. There’s no need for you to have the user name or the password any longer.

  • QBO has Class and Location tracking – Desktop has class tracking or the ability to track different profit centers, but QBO adds one more layer with Location tracking. For example, I have an auto shop client with two locations in Michigan, one in Pinckney and one in Stockbridge. He likes to track his business by location as well as by customer comparing government to walk-in customers. He uses Location tracking for each shop location and Class tracking for the customer type.

  • For Accountants: Multiple AR/AP lines are not allowed Journal Entries in Desktop, however QBO allows the same. 

Features in QuickBooks Desktop but not in QuickBooks Online

 

While QBO has all above advantages, there are still a few things Desktop has that QBO does not yet. Following are the missing features in QBO.

 

  • Sales Orders

  • Inventory Assemblies

  • Progress Invoicing

  • Receiving Partial Purchase Orders

  • Item Receipts

  • Balance Sheet by Class

  • QuickBooks Statement Writer

  • Consolidation

  • Budget v Actuals for Jobs

With QuickBooks Enterprise and Advanced Inventory you can also work with

  • Serial Number/Lot Number Tracking

  • Multiple Warehouse Locations

QuickBooks Online vs. Desktop: How Do You Decide?

 

The easiest way to make the decision between QuickBooks Online Vs. QuickBooks Desktop is to first look at the accounting app features that Desktop has that Online doesn’t, and ask yourself:

 

Is there anything I can’t live without?

If you find something that you absolutely need in Desktop, see if there’s a 3rd party app that can do that for you with Online. But if there is no app, or you feel you’d pay too much to add apps and fill the gaps in Online, then Desktop might be for you.

 

Just remember:

Cloud-based applications are the norm in business today. In 2018, the public cloud services market reached around 175.8 billion U.S. dollars in revenue and is forecast to exceed 278.3 billion by 2021. When it comes to comparing accounting software in 2020–like QuickBooks Online Vs Desktop–it’s hard to ignore the impact of cloud-computing.

 

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.

 

QuickBooks Online Vs. Desktop isn’t always an easy question to answer. Always consult with your bookkeeper or accountant (who are hopefully QuickBooks certified) before deciding, and if you’re not ready to make the change to Online now, prepare yourself that you’ll most likely have to make that change at some point in your business’s future.

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