QuickBooks Online Edition Meets Its Desktop Relatives

QuickBooks Online Edition is Intuit’s software-as-a-service (SaaS) product offering. According to Wikipedia, there are a number of forces in the computing world that are driving the “rapid acceptance” of SaaS applications, including the expensive overhead of purchasing and running applications locally, the economics of centralizing the cost of sophisticated technologies, and the availability of trusted and transparent security.

Small business accounting is full of the challenges that make SaaS a perfect fit. In the QuickBooks world, a small business needs to plan for software upgrades every 3 years at a minimum, and probably much more frequently. Beyond the cost of the software upgrades themselves, there’s typically additional cost to install and configure them properly. Next comes the ongoing cost of getting fast and reliable accounting software support. For many small businesses, simply finding qualified people to perform these tasks can be a challenge. With QuickBooks Online Edition, a small business is outsourcing all of the regular upgrade and support costs to Intuit, a company with the scale and technical resources to handle them. And it’s doing so by trading bigger up-front purchase costs for much lower monthly costs. As Wikipedia notes:

Computing and application licenses are cost centers, and as such, they’re suitable for cost reduction and outsourcing.

QuickBooks Online Edition offers 3 powerful advantages:

• lower up-front software costs resulting from less expensive, on-demand pricing
• reduced burden for installation, maintenance, and support
• rapidly scalable access to your accounting data when and where you need it

Online Edition virtually eliminates the need to upgrade accounting software on a regular basis. Intuit itself takes care of that hassle. A subscription to Online Edition also solves the problem of getting fast support to accounting software issues. Support is included in all versions of Online Edition, and the more advanced version provides call back support with an expected response time of 30 minutes. 1 By comparison, Intuit charges $299 per year for a support plan for the desktop QuickBooks Pro. Note that for QBGarage.com customers with Pro, Premier, or Enterprise solutions, email support is free. We also have our own dedicated QuickBooks KnowledgeBase which includes answers to questions on how to use QuickBooks in specific situations.

However, Online Edition isn’t suitable for every business. While Online Edition is a robust program, it lacks many of the features of the advanced desktop versions of QuickBooks. For example, QuickBooks Premier and Enterprise Solutions support multiple ship to addresses per customer; Online Edition doesn’t. A SaaS application like Online Edition that sets high standards for data reliability and integrity will typically not perform as fast as a comparable desktop version running on reasonably current hardware. That performance penalty is not a factor for most tasks, but companies facing a need to enter large volumes of transactions will observe that Online Edition is slower than its desktop counterpart.

Online Edition is available in 2 versions, Basic and Plus. Basic is designed as an introductory program for businesses automating their accounting for the first time. Therefore, there are no tools to import data to Online Edition Basic. Basic supports 1 user and the company’s accountant – for a total of 2 users. Because Basic is targeting users with simpler accounting needs, it doesn’t include some of the more powerful features of Plus. Among the omitted features are: estimates, invoice customization, employee time-tracking by customer, online banking, and class tracking. There’s also no 30 day free trial available.

Plus supports up to 3 users and the company’s accountant, but there are additional cost options to bump the maximum number of users from 3 to 10 or 25. For both Basic and Plus, an unlimited number of users can be given access to view reports. Plus incorporates those features not included with Basic. To get a better understanding of the feature differences between Basic and Plus, have a look at Intuit’s more complete comparison.

For 2009, Online Edition got a few improvements, namely improved support for online banking in the Plus version, direct deposit for online payroll, accountant data interchange for online edition payroll, and iPhone support.

There are a few considerations to insure that Online Edition is the right accounting product for your business. First, Online Edition does not include the full feature set of Intuit’s desktop products, such as Pro or Premier. Intuit has a guide that compares Online Edition Plus to Pro as well as a QuickBooks Family Guide. We’ve also prepared our own QBGarage.com QuickBooks Product Comparison 2009 that includes all of the QuickBooks general ledger products, including both versions of Online Edition. Check it out to see how the different programs compare.

Second, an Online Edition subscription is for a single company with 1 tax identification number, while the desktop products can be used to manage the accounting needs of multiple businesses. And Online Edition only works with Microsoft’s Internet Explorer browser.2 Users of other popular browsers, such as Firefox or Safari, are out of luck.

If you’re planning to convert existing QuickBooks data, be sure to review what data sources can be converted and how specific data elements are converted. In general, current data sources include QuickBooks versions from 1999 through 2008, and you can only convert as you are creating a new company. The size of your QuickBooks company is also an important consideration. If your company file is under 70 Mb in size, your conversion will almost always proceed without a hitch. For company files in the range of 70 Mb to 120 Mb, conversion will probably be successful, but there’s an increased chance that it may not. For a company file over 120 Mb in size, the risk of an unsuccessful conversion increases significantly. Since there is a trial period with Online Plus, there’s no risk if the conversion isn’t successful. We’ve identified professionals at Intuit who can assist to make sure the set up process for Online Edition is fast and easy.

To find the size of your current QuickBooks company file, press F2 while you’re running QuickBooks to display the Product Information screen. You’ll see a screen similar to the one displayed nearby that shows a company file of 14924K, or about 14.6 Mb. (As with most of the images on our site, click on the image for a better view.) In other words, this company file is well below 70 Mb, so we’re good to go!

There are a number of differences in the way information is presented onscreen in Online Edition compared to the desktop versions of QuickBooks. We’ve prepared a side-by-side comparison of QuickBooks Premier 2009 and Online Edition Plus for several common business tasks to highlight what a user of each program will see. In all of the comparison panels that follow, QuickBooks Premier 2009 is on the left and Online Edition Plus is on the right.

Here’s our comparison panel to add a new customer:

In addition to the Address Info screen, the QuickBooks desktop version has 3 additional input screens: Additional Info, Payment Info, and Job Info. Information on these screens isn’t stored by Online Edition.

Here’s our comparison panel to add a new AP vendor:

The desktop version of QuickBooks offers 2 additional vendor information screens: Additional Info and Account Prefill.

Here’s our comparison panel to create a customer invoice:

And lastly, here’s our comparison panel to enter a vendor AP bill:

The Online Edition screens are simpler than their desktop counterparts and also include helpful links to related tasks. However, some of that simplicity is achieved by excluding information, such as data fields that are otherwise available in the desktop editions of QuickBooks. Because the desktop editions of QuickBooks are designed for a very broad range of businesses, you may find that the excluded information isn’t vital to your business or can be maintained with other software tools.

To help you learn more about QuickBooks Online Edition, Intuit offers several online videos. There’s an interactive tour and a presentation on the optional Time Tracker feature. The interactive tour is on the left; the Time Tracker presentation is on the right. Just click the image to play the respective video.3

Intuit also offers an Online Edition Learning Center where you’ll find a number of useful guides, from Tips & Tricks to a Year End planning guide.

In the final analysis, Online Edition’s biggest strengths are its cost savings, providing “anytime, anywhere” access to accounting information in a rapidly scalable model, availability of support, and elimination of ongoing software maintenance. For many businesses, it’s a worthwhile trade-off to give up some speed or detail information to obtain those benefits. If that describes your business, Online Edition is the right choice. To get started with either a live installation of Online Edition or your free trial, just let us know. We’ll get you up and running very quickly.

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1. For Online Edition Basic, email support is available with an expected response within 24 hours. For Online Edition Plus, chat and email support are available, in addition to call back support with an expected response within 30 minutes. [↩]
2. It requires IE 6 or newer with active scripting enabled. [↩]
3. Note that as of this writing, the videos appear to contain a Flash version check which will fail to recognize that you have Flash installed if you are running the latest version of Flash, which is 10. See our Site Help page for more info on checking your Flash version. [↩]