David H. Ringstrom - QuickBooks Online For Dummies

Before you decide to move your accounting records to the cloud, you should consider the needs of your business in the following areas:

Invoicing, point of sale, electronic payment, and customer relationship management

Financial and tax reporting

Budgeting

Time tracking and payroll

Inventory, job costing, and job scheduling

Management of company expenses and vendor bills

Beyond the advantages described in this section, the needs of your business may dictate whether you can use QuickBooks Online. The platform won’t work for you if your business has industry-specific needs or is midsize, for example. In addition, QuickBooks Online won’t work for you if you need to do any of the following things:

Track your balance sheet by class.

Track labor costs.

Manage a robust inventory that supports making and selling finished goods.

In any of these cases, you’d probably be better off with Intuit’s desktop-based QuickBooks Enterprise or perhaps QuickBooks Premier.

Using web-based software can be attractive for several reasons. For one thing, when you use web-based software, you have access to that software’s information anywhere, at any time, from any device — stationary or mobile.

Some folks see the “anywhere, anytime” feature as a potential disadvantage because it makes information too readily available — and therefore a target for hackers. Rest assured that Intuit stores your data on servers that use bank-level security and encryption, and it backs up your data for you automatically.

In addition, web-based software like QuickBooks promotes collaboration and can help you save time. Accountants, bookkeepers, and clients can communicate about issues that arise, as described in Chapter 16.

Web-based software also eliminates the issue of keeping software up to date. The desktop version of QuickBooks typically receives a major update once each year, along with periodic software patches that must be installed manually. Conversely, QuickBooks is updated automatically every two to four weeks, so there’s never a new version to install or a patch to deal with. Most modern computers should exceed the minimum requirements, but you can get the nitty-gritty computer specification details here: https://intuit.me/3yEaSJL .

Because updates occur so frequently in QuickBooks, by the time this book is published, some features (and screens) may have changed. Make that will have changed.

My technical editor extraordinaire Dan DeLong has created a free QuickBooks Chooser chatbot that will help you choose the right version of QuickBooks Online based upon your specific business needs. Check it out at https://sob.drift.click/QBChooser .

Chapter 2

IN THIS CHAPTER

Understanding QuickBooks Online subscriptions and their costs

Examining ways to meet payroll needs

Switching from QuickBooks Desktop

Taking a tour of the App Center

QuickBooks Online and QuickBooks Online Accountant are cloud-based accounting software programs. Actually, it’s more apt to call them accounting ecospheres, because as you’ll see throughout the book, you can layer on functionality with add-ons from Intuit and third-party developers. In this chapter, I help you determine which version of QuickBooks fits your needs best from both functionality and cost standpoints.

QuickBooks Online isn’t your father’s accounting software. Back in the day, you’d pay once for a software license and use it as far into the future as you chose. Such perpetual licenses have mostly fallen by the wayside in favor of subscriptions, often referred to as Software as a Service (SaaS). The good news for accounting professionals is that QuickBooks Online Accountant is free and includes one free QuickBooks Online Advanced subscription for you to use for your own use. Everyone else must choose and pay for a QuickBooks Online subscription. Unlike old accounting software, you don’t have to install QuickBooks Online on your desktop computer, which means there are no software patches to keep up with. Any changes or improvements appear automatically the next time that you log in. If you end your subscription, however, you also end your access to the software, apart from a one-year period during which you can view transactions and run reports.

QuickBooks Online is available at five price and functionality levels:

Self-Employed

Simple Start

Essentials

Plus

Advanced

All versions of QuickBooks Online have three features in common:

You can use a tablet, Android or iOS smartphone, or desktop computer to access your data.

Your data is backed up online automatically.

All versions use 128-bit Secure Sockets Layer (SSL), the same security and encryption that banks use to secure data sent over the internet.

After you assess your needs, as described in Chapter 1, use the following information to identify the lowest subscription level that will meet your requirements. You can upgrade to a higher level at any time, but you can’t downgrade.

Whether you’re a business user or an accountant, you can easily add payroll to a QBO subscription at any time. For details, see “ Payroll Options” later in this chapter.

This version is aimed at freelancers and self-employed people who file Schedule C of IRS Form 1040. Unlike the higher level offerings, QuickBooks Self-Employed allows you to mix business with pleasure, meaning that you can separate personal and business expenses and mileage. It’s best suited to someone with a side hustle who wants to keep track of their business and simplify income tax filing.

A QuickBooks Simple Start subscription is great for a new business with basic bookkeeping needs. With Simple Start, you can

Track your income and expenses

Download transactions from your bank and credit card accounts

Create an unlimited number of customers

Send unlimited estimates and invoices

Print checks and record transactions to track expenses

Track and pay sales taxes

Track, create, and send 1099 forms

Import data from Microsoft Excel or QuickBooks Desktop

Invite up to two accountants to access your data

Integrate with available apps in QuickBooks Online App Center