by Sandor Lenner,CPA
QuickBooks Online has three levels of online accounting choices: Simple Start(free version), Basic, and Plus. Before making your decision to use QuickBooks Online, you should decide between QuickBooks Online Basic or QuickBooks Online Plus. This article will discuss the differences between these two QuickBooks Online options. Ultimately, you are responsible for ensuring that you select the correct version which should be tailored to the business that you operate. There is also a free version called QuickBooks Online Simple Start. The free version was not considered for this analysis because of its limited capabilities. QuickBooks Online Basic will be collectively referred to as “BASIC” and QuickBooks Online Plus as “PLUS”. Each major difference and brief comment regarding the option’s capability is discussed below:
Set forth below are the functionalities that work only with Plus:
Importing -By using Plus, you are able to import your Simple Start Edition,QuickBooks Online basic, QuickBooks Pro or Premier Edition file(s) to PLUS only. Unfortunately, this type of import capability does not work with a Mac.
Estimates – Estimates can be created and then seamlessly imported to an invoice for billing. By using estimates understandings can be mitigated.
Online Banking – Payments and receipts do not have to be entered into your QB register when you use Online banking. Instead of entering then, you only have to review them. When you download from your bank, QuickBooks is able to compare the bank’s transactions to your transactions in QuickBooks and identifies differences. Plus assists you in managing your cash flow, because you know which checks have cleared the bank, which helps you understand how much money you have in real time. This feature is only offered in PLUS.
Exporting – PLUS provides you with the ability to export transactions and balances to a Microsoft Excel spreadsheet. I can’t begin to impress upon you how importance of this feature for further analysis of your business. It’s a very important feature, since it adds greater reporting capabilities. It gives you flexibility is to analyze different types of financial data.
Class tracking – This is similar to business tracking. Classes allow you to categorize transactions in more detail. By using classes, you are able to categorize each detail line on a transaction. For example, you can write one check to the office supply vendor for items bought for two different online business units while being able to track the business unit for those purchases. For example, you have a website development firm and a SEO business, and want to track revenue and expense for each business, you will be able to produce a Profit & Loss by Class report that will inform you if your website development business is more or less profitable than the SEO business. This feature is only offered in PLUS.
Business tracking – This feature is only in PLUS. You can use businesses to categorize data from different locations, offices, regions, or outlets of the same company. By assigning a business to each transaction as you enter it, you can later see businesses on reports. Assigning businesses also lets you efficiently manage groups of transactions.
Time tracking – With Plus you can enter your time into a time sheet when you bill by the hour i.e. consultants, website developers, SEO’s, freelancers, sole proprietors, etc. This feature is only offered in PLUS.
Invoicing – With Plus also you can customize the invoice.This is another reason to try both to see what works for you.
Reporting and Financial Statements – With BASIC you receive 40 standard financial reports. However, with PLUS you get over 65 standard financial reports and customization and formatting options. If you are interested in a very detailed analysis in a chart format of the reporting differences, please got to Intuit’s knowledge base for comparison of the QuickBooks Online Products.
Budgeting – You can use a budget to estimate future income and expenses. Moreover, PLUS budgets’ uses a format similar to a spreadsheet, with a horizontal row for each of your income and expense accounts, and vertical columns for each month or quarter. This feature is only in PLUS
1099 Reporting – The regulations of the Internal Revenue Service require that a taxpayer issue a 1099-MISC form to its workers for nonemployee compensation providing the payer is a trade or business and the payments are to a noncorporate entity were $600 or more for services rendered. This feature is only offered in PLUS.
Number of Users – BASIC provides access for you and your accountant (2 users). Whereas PLUS provides access for 3 users PLUS your accountant(4 users). Plus can be expanded to 25 users for an additional cost.
Support – BASIC includes email support provided by Intuit whereas PLUS includes callback and chat support as well as email support . Obviously, PLUS support is better, but with BASIC you can still get your questions answered.
Price – BASIC costs $9.99 a month as compared to PLUS which according to the Intuit website is $34.95 per month. However, if you purchase PLUS by using a Certified QuickBooks ProAdvisor you can purchase it for $21, which is net of a discount 40% discount, which is currently in effect at this time. Discounts and prices may change in the future. There are no annual contracts.
Summary – Generally speaking, BASIC is for smaller companies, whereas PLUS is for small to midsized companies. Before you make your decision, you can test these small business accounting solutions for 30 days for both BASIC and PLUS and decide which is best suited for your company. They are other inherent limitations when comparing BASIC and PLUS to Desktop QuickBooks i.e. Pro, Premier, etc.. By far the most significant limitation is that the Online versions do not provide inventory capabilities, unless you purchase an inventory add on. Finally, its very important to ask you CPA or accountant for help in making this important decision.
About the Author:
Learn how
QuickBooks Online provides the essential online accounting tools to manage your business and the freedom to access your financials from your office, home, or the road. Sandor Lenner, C.P.A. has provided accounting services for over 35 years. He is also a Certified QuickBooks ProAdvisor and your offices as a part-time small business consultant for a
Miami Accounting CPA firm.