QuickBooks Hosting Mode vs. Multi-User Mode: How to Share Company Files on a Local Network

When several people in an office use QuickBooks Desktop, they do not need a separate company file on every computer. The company file can be stored on one computer or server and shared with other QuickBooks users on the same network.

QuickBooks Hosting Mode allows one computer to host the QuickBooks company file while other computers connect to it. When QuickBooks is configured for multi-user access, multiple licensed users can work in the same company file from their respective computers.

However, QuickBooks Hosting Mode should not be confused with QuickBooks cloud hosting. Local hosting depends on a computer or server within your network. Cloud hosting runs QuickBooks Desktop and the company files on a remote server that authorized users can access over the internet.

Let’s understand how QuickBooks Hosting Mode works and what you need to share company files on a local network.

What Is QuickBooks Hosting Mode?

QuickBooks Hosting Mode determines whether a computer can host a QuickBooks company file for other computers on the network.

In a typical setup, one computer or server stores the .QBW company file. QuickBooks Database Server Manager runs on that computer and helps other QuickBooks workstations connect to the file. The computer storing the company file acts as the host or server. Other computers are called workstations.

Hosting should normally be enabled only on the server that stores the company file. The workstations accessing that file should not also be configured as hosts. This helps avoid connection problems and keeps one computer responsible for managing access to the company file.

QuickBooks Hosting Mode vs. Multi-User Mode

These two terms are often confused, but they refer to different things.

• Hosting Mode determines which computer hosts the company file and makes it available over the network.
• Multi-User Mode allows more than one licensed QuickBooks user to work in the company file at the same time.

For example, your office server may host the company file, while an accountant and bookkeeper open that file from separate workstations in Multi-User Mode.

Not every QuickBooks task works in Multi-User Mode. Some administrative tasks, such as rebuilding company data, still require Single-User Mode.

How QuickBooks File Sharing Works on a Local Network

Suppose a business has five computers running QuickBooks Desktop. Instead of keeping five different copies of the company file, the business can store the main .QBW file on one server. The process works like this:

1. The QuickBooks company file is stored on the host computer or server.
2. QuickBooks Database Server Manager manages network access to the file.
3. Other computers connect to the server through the local network.
4. Users open QuickBooks Desktop from their own workstations.
5. QuickBooks connects them to the shared company file.
6. Authorized users can work in the same file when Multi-User Mode is enabled.

This means everyone works with the same accounting data rather than maintaining separate copies of the file. For a detailed setup guide, see How to Host a QuickBooks Company File.

What Does QuickBooks Database Server Manager Do?

QuickBooks Database Server Manager helps multiple users access the same company file over a local network. It runs on the computer or server where the QuickBooks company file is stored and manages communication between that file and connected workstations.

When you scan a folder with Database Server Manager, QuickBooks creates a Network Data (.ND) file for the company file. This file contains the network details QuickBooks needs to locate the server and connect users to the .QBW file.

For example:

• Company file: MyCompany.qbw
• Network Data file: MyCompany.qbw.nd

You normally do not need to open or edit the .ND file manually. QuickBooks uses it in the background to support multi-user access.

QuickBooks Database Server Manager Versions 

The Database Server service name changes with the QuickBooks Desktop version installed. 

For example, QuickBooks Desktop 2024 uses the QuickBooksDB34 service.

If more than one QuickBooks Desktop version is installed on the same server, each version can have its own Database Server service and hosting settings. Because these service names change with QuickBooks releases, it is better to check the version installed on your system instead of relying on an old version list.

The Three QuickBooks Hosting Modes

According to Intuit, QuickBooks Desktop has three hosting modes:

Not Hosting

In Not Hosting mode, the computer is not acting as a QuickBooks database server for other computers. This is normally the setting you want on workstations that access a company file stored on another computer.

For example, if your receptionist’s computer opens a QuickBooks file stored on the accounting server, the receptionist’s computer should not also host the file.

Hosting Local Files Only

Hosting Local Files Only allows the computer to host QuickBooks company files physically stored on that computer. QuickBooks Database Server Manager runs as a Windows service and allows other computers to connect to those files over the network.

This is the most relevant mode for a traditional setup where one server stores the company’s QuickBooks files. As long as the server and required services are running, authorized workstations can connect to the files it hosts.

Hosting Local & Remote Files

Hosting Local & Remote Files can allow a computer to host files stored locally as well as a company file opened from another network location. This configuration is associated with more complex hosting arrangements, such as alternate hosting.

For most businesses with a straightforward local network, keeping one clearly defined computer responsible for hosting the company files is easier to manage.

Common QuickBooks Hosting Configurations

QuickBooks local file sharing can be arranged in several ways depending on where the company file is stored.

Dedicated Hosting

In a dedicated hosting setup, one computer or server is mainly responsible for storing and hosting QuickBooks company files. Employees do not normally use that server as their day-to-day QuickBooks workstation. They use QuickBooks on their own computers and connect to the company file over the network.

QuickBooks can be configured on the server using either the full QuickBooks Desktop installation or a server-only installation of Database Server Manager. A dedicated server setup is usually easier to manage when several employees need access to the same company files.

Peer-to-Peer Hosting

In peer-to-peer hosting, one employee’s computer performs two jobs. It acts as a normal QuickBooks workstation while also storing and hosting the company file for other users.

For example, the accounting manager’s desktop may contain the company file. Other employees then connect to that desktop over the network. This setup can work for a small office, but the host computer needs to remain available when other users want to access the file. If the computer is turned off, disconnected from the network, or experiencing problems, other users may lose access.

Alternate Hosting

Alternate hosting is a more complex configuration in which one computer may open and host a company file located on another computer. Intuit documents this configuration, but it can make troubleshooting more difficult if hosting is enabled on the wrong workstation.

For most businesses, it is easier to have one clearly identified server host the company file while the remaining computers act as workstations.

How to Check Hosting Mode in QuickBooks?

You can check whether a computer is hosting QuickBooks files directly from QuickBooks Desktop.

• Open QuickBooks and go to: File > Utilities 
• Then check the option displayed. If you see: Host Multi-User Access. The computer is currently not hosting. 
• If you see: Stop Hosting Multi-User Access. The computer is currently configured to host

On a normal workstation, you generally see Host Multi-User Access. Do not select it unless that computer is supposed to host the company’s files. Your server should normally be the computer responsible for hosting.

What Is Required for QuickBooks Multi-User File Sharing?

Having QuickBooks installed on several computers is not enough. The network and file permissions must also be configured correctly.

• Correct Windows Permissions: Users need appropriate Windows permissions for the folder containing the QuickBooks company file. The QuickBooks Database Server service also needs permission to access the folder. Incorrect folder permissions can prevent workstations from opening the file even when the server itself is working correctly.
• QuickBooks Database Server Access: Database Server Manager must be able to find and manage the company file. The folder containing the .QBW file should be scanned using QuickBooks Database Server Manager so QuickBooks can create or update the required network configuration.
• QuickBooks User Accounts: Each person should use the QuickBooks company file account assigned to them. This also allows the QuickBooks administrator to control what different users can access inside the company file.
• Working Network Connection: The host and workstations need to communicate over the network. Intuit lists a Local Area Network, or LAN, among its recommended network types for QuickBooks Desktop and specifies at least 40 Mbps network bandwidth for a LAN environment.

How to Open a Shared QuickBooks File from Another Computer

Once the server and workstations are correctly configured, opening a shared company file is straightforward. On the workstation:

1. Open QuickBooks Desktop. 
2. Go to File > Open or Restore Company. 
3. Select Open a company file. 
4. Browse to the network location where the .QBW file is stored. 
5. Select the company file. 
6. Select Open. 
7. Enter the QuickBooks username and password when required. 

The server or host computer can also be mapped as a network drive in Windows to make the shared folder easier to access.

Things to Remember When Sharing QuickBooks Files Locally 

A few basic practices can prevent many QuickBooks network problems. 

• Keep hosting on the correct computer. Your server should normally be the only computer hosting the company files. Enabling hosting on workstations can cause multi-user connection problems. 
• Keep Database Server Manager running. The QuickBooks database service needs to run on the computer storing the company file so other users can reach it. 
• Do not delete the .ND file unnecessarily. QuickBooks uses this file to identify the database server and network settings associated with a company file. 
• Check folder and firewall permissions. QuickBooks needs permission to communicate through your network and access the folder where the company file is stored. 
• Avoid creating separate working copies of the same file. Multi-user hosting is designed to let authorized users work with one shared company file. 

If QuickBooks shows an H202 or another network-related error, the problem may come from incorrect hosting settings, Database Server Manager, firewall rules, or the network connection. In such cases, checking the steps to fix QuickBooks Hosting Mode errors can help you identify the issue and restore multi-user access. 

Local QuickBooks Hosting vs. QuickBooks Cloud Hosting 

Local QuickBooks Hosting Mode works within your company’s network. It can be a practical choice when employees work from the same office and an existing server is available. 

However, access still depends on that local infrastructure. If employees need to use QuickBooks from different offices or locations, businesses may consider QuickBooks cloud hosting instead. 

With cloud hosting, QuickBooks Desktop and company files run on a remote server. Authorized users connect to the hosted environment over the internet rather than depending on the office LAN. 

Intuit lists cloud hosting separately from a Local Area Network in its recommended network guidance and describes third-party cloud hosting as a model where the provider hosts the QuickBooks file for access over the internet. 

Ace Cloud Hosting is also listed by Intuit as an authorized QuickBooks Desktop hosting provider. 

The right option depends on whether your team needs QuickBooks mainly inside one local network or requires remote access from multiple locations. 

Understanding the Right QuickBooks Setup 

QuickBooks Hosting Mode makes it possible to keep one company file on a local server and share it with authorized QuickBooks users across the same network. 

The key is keeping the setup simple: store the company file on a clearly defined server, run Database Server Manager there, configure the correct permissions, and keep hosting disabled on regular workstations. 

For teams working mainly from one office, this setup can provide effective multi-user access. If users need to reach QuickBooks from different locations, cloud hosting provides another way to make the same QuickBooks Desktop environment available remotely.