Starting a company is one of the most exhilarating and frightening things a person can do in their lifetime. Picking accounting software for the company can be just as frightening. QuickBooks® is widely known as one of the best accounting software for small businesses, but there are many different versions of QuickBooks. Let’s explore the pros and cons of QuickBooks Desktop and QuickBooks Online to determine the best fit for your startup.
The Desktop version is a software program that needs to be installed on a home or office computer. The most popular version starts at $300, and is typically paid up front. Clients of Anders receive a 50% discount for the program. The software does not require an internet connection to function, but it can only be accessed from the computer it was installed on unless you upload it to the “Cloud”. There is no limit on the number of different company files you can set up while using the Desktop version. A product-based company might find Desktop more appropriate due to the multiple inventory tracking options, batch invoicing and customizable features. Desktop also includes more freedom to customize your software to be industry-specific such as Manufacturing & Wholesale, Professional Services, Retail, and Nonprofit.
A disadvantage of Desktop is having to pay extra for support services from Inuit. The basic Pro version does not include support, but it’s included if you upgrade to the Premier or Enterprise version. They also recommend updating the Desktop version about every three years if your company uses the payroll function. Another disadvantage comes with sending company information to another person. For example, if Desktop files are sent to external accountants, any changes they need to make must be sent back via adjusting journal entries or in an “accountant’s copy” that must be imported into your file. Another disadvantage is that Intuit has stopped offering QuickBooks for Macs, and many speculate the Desktop version will become obsolete all together over the next few years. However, the QB Desktop is still very popular with larger companies. These are a few reasons some businesses prefer using QuickBooks Online.
QuickBooks Online (QBO)
The QuickBooks Online version allows entrepreneurs to access their books from any device with an internet connection. The most popular version costs $26.95 per month, per company file, totaling about $323 per year for one company, and must be paid every year. However, just like the Desktop version, clients of Anders receive a 50% discount on the Online subscription as well.
A service-based company might prefer using QBO because of automated transactions such as billing and being able to link bank transactions faster with the software. For Desktop, there are a few extra steps to linking your bank account with the software. QBO’s remote access allows multiple users to be in the file simultaneously. Also, being able to create multiple usernames and passwords establishes a smoother transition process with accountants and bookkeepers. Support services are free with the subscription of the QBO software. The Online version is much easier to setup and allows the company to be fully operational much quicker. This version is great for startups not expecting rapid growth over the first few years of existence.
Some disadvantages to using QBO include having a monthly payment, therefore paying more over the course of the year, every year, and requires an internet connection. Some startups are wary of having their books and records available online, reasoning that they might be more prone to hacking or online viruses. Although they are constantly making improvements, QBO is not as robust as the Desktop version, yet. However, many non-accountants already find the Online version more user-friendly.
There are multiple pros and cons to using either the Desktop or Online version of QuickBooks. Startups should consider growth, number of daily transactions, number of vendors and customers and other options such as payroll and the specific industry. If you have any questions regarding QuickBooks, or would like to discuss bookkeeping software for your startup, please contact an Anders startup advisor.