QuickBooks Desktop vs QuickBooks Online - What's the Difference

QuickBooks has been the top accounting solution for almost three decades, and the 2002 release of QuickBooks Online only extended this industry-leading trend. While both continue to remain popular among business owners, the differences between QuickBooks Desktop and QuickBooks Online make them ideally suited for different clientele. QuickBooks Desktop is a traditional online accounting system while QuickBooks online is a more modern cloud-based accounting platform. 

​Distinct operational advantages give each an ideal user base across various industries, lifecycles, offerings, and sizes.

Speed of Set-Up

Both Desktop and Online offer a speedy and intuitive initial set-up. Data can be imported into Desktop via spreadsheet, which makes it an attractive choice for business owners that have historical offline transactions. With QuickBooks Online bank transactions are quick to import, making the addition of online transactions painless. While data can be moved from Desktop to Online and vice versa, the two platforms do not communicate, so they cannot be used in tandem.

While new businesses will benefit from an easy set-up process with either QuickBooks offering, more established businesses (especially those migrating over from another accounting system) will see an immediate benefit in using QuickBooks Online.

Ease of Use

Once set-up is complete both QuickBooks platforms cater to wide range of accounting experience levels. Some business professionals consider Desktop easier to navigate for more novice users, but the differences here are more nuanced than on other criteria.

The main distinction is not which system is easier to use, but which more in line with a business owner’s working style. Business owners that prefer a more hands-on approach will likely prefer Desktop, while those that appreciate automation will likely appreciate Online. For example,

QuickBooks Online automatically downloads and categorizes bank and credit transactions, improving organization through automated functionality.

Pricing

QuickBooks Desktop requires a one-time software purchase, whereas Online carries a monthly fee. As a result, QuickBooks Online is less expensive initially and more expensive in the long-run, which can benefit cash-strapped startups and micro businesses.

Software Updates

While the QuickBooks Desktop software only needs to be purchased once, upgrades are recommended every three years. These upgrades are the Desktop user’s responsibility to manage and install. However, Online provides access to the latest version of QuickBooks automatically.

Businesses that use other technical integrations will benefit from always maintaining the latest version of QuickBooks, making Online a smarter choice.

Plan Options

Desktop plans are delineated by the features they offer, and while this is also true for Online to some extent, QuickBooks Online also has plans for specific business formation types.

Specifically, QuickBooks offers an Online plan catered to the needs of solopreneurs, contractors, and freelancers at a lower price point. QuickBooks Self-Employed is a simplified Online plan that gives individuals control over income and expenses without charging for added features that they do not need.

Industries

While QuickBooks Online may be the preferred choice for single-member business owners, larger businesses in certain industries definitely benefit from using Desktop.

QuickBooks Desktop is the preferred choice for non-profit business and organizations. Other industries like manufacturing, professional services, and retail will find a bevy of customized time-saving features in Desktop as well.

Access

While Desktop limits the number of computers it can be installed on, Online limits the number of users. As a result, data stored within QuickBooks Online can be accessed anywhere. With QuickBooks Online a business’s accountant and other team members can seamlessly share information across Apple and PC devices for better collaboration. Subsequently, Online is the preferred choice of businesses that utilize remote workers and contractors and employ team members across various locations. Additionally, QuickBooks Online is better for larger teams because additional users can be added more cost-effectively than buying more licenses for Desktop.

The real strength of QuickBooks Online is the ability to check on high-level business information as well as specific details like overdue invoices on the go. With Online business owners can also upload receipts, send invoices, manage payroll, and reconcile bank accounts from their phones. However, as a cloud-based platform, QuickBooks Online access is at the mercy of internet connectivity and speed. So, while QuickBooks Online is better for frequent travelers that may need to log-in from shared machines or across various device types, some international or rural domestic travelers may find QuickBooks Desktop to be a better choice due to weak Wi-Fi signal and slow internet speeds in those regions.

Some accounting professionals strongly prefer to use QuickBooks Desktop simply because it has been around longer, and they have already acquired substantial experience using it. These more traditional professionals would rather use a platform that they know intimately than learn a new system. While this perspective may not be as deleterious for in-house bookkeepers and accountants, individual financial consultants and those employed at third-party providers should have demonstrated acumen on both platforms because Online is a more adaptable solution for businesses that choose to outsource their accounting and finance functions. Storing financial information in the cloud will always be more conducive to collaboration across multiple locations.

Inventory

The enterprise version of QuickBooks Desktop integrates inventory barcode scanning, making it the clear choice for inventory-heavy industries like retail and manufacturing. Tying barcode data into QuickBooks allows companies using Desktop to organize and track orders and shipping information for real-time inventory tracking in warehouses.

Desktop is a better choice for product-based operations because it allows for multiple inventory tracking and valuation options, whereas QuickBooks Online is better for service-based businesses.

Invoicing

Desktop sets itself apart from Online by including a batch invoicing feature for large volumes of customers. So, while QuickBooks Desktop is the obvious choice for inventory-centric operations, it is also better for high-volume invoicing and complicated invoicing needs. For service providers their specific invoicing needs will determine which solution is the best fit.

Service providers with complicated invoicing practices or sophisticated terms (ex. legal, medical, education) will benefit from using Desktop instead of Online like their fellow service-providers.

Support

On Desktop users can upgrade to unlimited technical support for an added fee, whereas QuickBooks Online already includes this in the monthly plan price. Online also provides a dedicated point of contact to answer questions and provide resources. With unlimited technical support available on both versions, this consideration is less likely to be a deciding factor.

However, it is worth noting that unlimited technical support is less expensive on QuickBooks Online. This is good news for both business owners that are not as technologically savvy and also those that are technology mavens and want to utilize sophisticated technical integrations.

Reporting

While both QuickBooks Desktop and Online offer robust reporting, they have different reporting strengths. Desktop makes income and expense tracking easy while also offering automated reporting. Online gives users the ability to create reports around cash flow, profitability, and other KPIs.
This added customizability gives the edge to QuickBooks Online for business owners that want more detailed reporting for investors and other relevant audiences.

Backups

On QuickBooks Online data is backed up automatically, creating effortless redundancy.
Even the most organized business owners will not be able to achieve this level of reliability with manual backups on QuickBooks Desktop, giving Online a definite advantage.

The biggest difference between QuickBooks Online vs. Desktop is that Online requires no installation on a computer and Desktop does. Many small businesses are converting their QuickBooks Desktop to QuickBooks Online with approximately 80% of new QuickBooks users choosing QuickBooks Online over QuickBooks Desktop.

When you review the support and flexibility on Intuit.com, there is a heavy emphasis on the online version:

Even so, our team of accountants and bookkeepers are familiar with many accounting software systems. We remain flexible to meet your needs.

Need help?  Contact us!
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