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QuickBooks Online and QuickBooks Desktop have established their roles in accounting, assisting numerous businesses in streamlining their financial operations.
Understanding the differences between QuickBooks Online and Desktop is vital for businesses seeking a tailored solution that aligns perfectly with their operational needs, scalability aspirations, and financial management preferences.
However, as many CPAs will attest, the choice between the two isn’t always straightforward.
Let’s delve deeper into the unique capabilities, strengths, and weaknesses of both these platforms.
QuickBooks Online vs Desktop: Key Differences
QuickBooks Online is a cloud-based accounting platform available through subscription plans. QuickBooks Desktop is locally installed software, but its current U.S. availability has changed. Intuit no longer sells new subscriptions for QuickBooks Desktop Pro Plus, Premier Plus, or Mac Plus. Existing subscribers can continue renewing, while QuickBooks Desktop Enterprise remains available to new customers through subscription plans.
Have a look at the key differences:
| Feature | QuickBooks Online | QuickBooks Desktop |
| Accessibility | Cloud-based; accessible from any device with an internet connection | Installed locally on a computer or accessed remotely when deployed through cloud hosting. |
| Pricing model | Subscription-based pricing | Subscription-based pricing |
| Version updates | Automatically updated | Maintenance updates can be configured to download automatically or installed manually. |
| User access | Varies by plan; Up to 25 users (Advanced) | Varies by product and plan; Desktop Enterprise supports up to 40 users (Diamond). |
| Data storage | Data stored in the cloud | Company files can be stored locally, on a network, or in a hosted environment. |
| Industry-specific tools | QuickBooks Online offers features for different industries, while QuickBooks Online Advanced includes specialized tools for areas such as construction and professional services. | Desktop Enterprise offers dedicated industry editions, including Contractor, Manufacturing and Wholesale, Nonprofit, Retail, Professional Services, and Accounting. |
| Customization | Varies by plan; Advanced includes custom access controls, custom reporting, dashboards, and workflow features | Desktop Enterprise provides advanced reporting, custom fields, permissions, and industry-focused features |
| Integration | Supports third-party apps through the QuickBooks integrations ecosystem | Supports connected services and third-party applications; Desktop Enterprise can also connect with additional business and ecommerce apps |
| Remote access | Available through web browser or mobile app | A local Desktop installation is device-dependent, but cloud hosting can provide remote access |
| Automatic backups | QuickBooks Online automatically backs up data. Advanced also provides backup and restore capabilities for eligible company data | QuickBooks Desktop supports scheduled automatic local backups as well as manual backups. Backup options can also vary by Enterprise plan and hosting setup |
| Support options | Intuit product support is available, with additional support benefits on eligible plans such as QuickBooks Online Advanced | Intuit support is available for supported Desktop products, with additional benefits for eligible Enterprise subscribers |
1. Accessibility
QuickBooks Online is better when it comes to accessibility. As a cloud-based solution, it enables you to access your data from anywhere, anytime, and on any device with an internet connection. Its features include recurring transactions, receipt capture, mobile access, and the ability to attach supported documents to customer and vendor profiles and transactions.
QuickBooks Desktop Enterprise, on the other hand, offers features designed for businesses that need more advanced desktop-based workflows. These include job costing, batch transaction entry, advanced inventory capabilities, customizable reporting, and industry-specific editions.
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2. Evaluating Pricing and Billing
QuickBooks Online operates on a subscription-based model with various pricing tiers, each offering a different level of features. The charges are on a monthly basis, which some users prefer for its flexibility.
QuickBooks Desktop Enterprise is available to new customers through monthly or annual subscription plans, depending on the edition.
3. Integrations
QuickBooks Online offers integration with a multitude of third-party apps. QuickBooks Desktop also supports connected applications and services. Desktop Enterprise can work with additional business applications and e-commerce tools, although the setup and compatibility requirements differ from QuickBooks Online.
4. Security Measures
QuickBooks Online automatically backs up company data and uses security safeguards to protect financial information. QuickBooks Online Advanced also offers backup and restore functionality for supported company data.
With QuickBooks Desktop, businesses have more responsibility for how the company file and computing environment are managed. Desktop users can create manual backups or schedule automatic local backups. Security and backup practices can also depend on whether QuickBooks is deployed locally, on a network, or through a hosting provider.
5. Ease of Use
QuickBooks Online boasts a user-friendly, intuitive interface, making it easy even for accounting novices to navigate. QuickBooks Online can also accept supported bank and credit card statements in PDF or image format when transactions need to be uploaded manually.
In contrast, QuickBooks Desktop, while offering more advanced functionalities, may pose a steeper learning curve due to its traditional interface. For data imports, QuickBooks Desktop supports specific formats and methods such as Excel, CSV, IIF, and Web Connect (.QBO) files. Businesses should follow Intuit-supported import methods rather than treating PDF conversion as a general QuickBooks Desktop import workflow.
Areas Where QuickBooks Online May Fit Better
Being cloud-based, it offers the convenience of anytime, anywhere access – perfect for the accountant who likes to work in their pajamas or has developed a knack for crunching numbers during the half-time break of their kid’s soccer game.
Advantages
- Mobility: With QuickBooks Online, you can manage your finances on the go. Whether you’re on a tropical beach or in a traffic jam, you can always stay connected.
- Automatic Updates: QuickBooks Online takes care of all the updates, so you don’t have to worry about manually upgrading your software.
- Multiple User Access: With QuickBooks Online, your team can access the same company data based on the user limits and permissions available with your plan.
Disadvantages
- Internet Dependency: Since QuickBooks Online is cloud-based, you’ll need a stable internet connection to access your data.
- Monthly Subscription: QuickBooks Online requires an ongoing subscription. Businesses should compare the features and user limits of each plan rather than assuming Desktop provides a current one-time-purchase alternative.
Areas Where QuickBooks Desktop May Fit Better
QuickBooks Desktop Enterprise may suit businesses with more complex operational needs, especially those managing inventory, job-based work, detailed reporting, or industry-specific processes.
Advantages
- Stronger Operational Controls: Supports features such as advanced pricing, custom user permissions, batch transactions, and detailed reporting.
- Industry-Specific Editions: QuickBooks Desktop Enterprise offers specialized editions for contractors, manufacturing and wholesale, nonprofit organizations, retail, professional services, and accounting professionals.
Disadvantages
- Limited Accessibility: Unlike QuickBooks Online, the Desktop version is tied to the environment where it is installed unless remote access or cloud hosting is configured.
- Desktop Management: QuickBooks Desktop can download maintenance updates automatically when automatic updates are enabled. Still, businesses need to manage the installed software environment, company files, devices, and applicable version upgrades.
Enhancing Desktop with Cloud Hosting
The benefits of QuickBooks Desktop can be further amplified if the software is hosted on the cloud by a reputable service provider. This approach combines the robust functionality of QuickBooks Desktop with the accessibility of QuickBooks Online, giving businesses a powerful, flexible solution.
Cloud-hosted QuickBooks Desktop enables authorized users to access the Desktop environment remotely while continuing to work with the same QuickBooks company data. Intuit also documents cloud hosting as an option for remote QuickBooks Desktop access.
QuickBooks Online vs Desktop: Similarities
| Feature | QuickBooks Online | QuickBooks Desktop |
| Accounting Features | Core accounting functionalities such as invoicing, expense tracking, bank reconciliation, and reporting | Core accounting functionalities available, including invoicing, expense tracking, bank reconciliation, and more. |
| Financial Reporting | Financial reporting capabilities with features varying by subscription plan | Comprehensive reporting features, with advanced reporting available in Desktop Enterprise |
| Multi-Currency Support | Available in supported plans, including Essentials, Plus, and Advanced | Supports multi-currency for applicable Desktop workflows |
| Integration with Third-Party Apps | Integration with a wide range of third-party applications | Integration with connected services and supported third-party applications |
Both products continue to support multicurrency, although specific features and limitations differ.
Move your QuickBooks Desktop to the cloud for secure, anytime access without changing the workflows you rely on.
QuickBooks Online vs Desktop: Which Should You Choose for Your Business?
QuickBooks Online is generally suited to businesses that prioritize browser-based access, automatic product updates, mobile access, cloud-based collaboration, and integrations. QuickBooks Desktop Enterprise may be a better fit for businesses that rely on specific Desktop workflows, advanced inventory or job costing capabilities, industry-specific editions, or a larger number of simultaneous Desktop users.
Businesses that prefer Desktop functionality but also need remote access can consider a hosted QuickBooks Desktop environment.
The choice between QuickBooks Online and QuickBooks Desktop ultimately comes down to individual business needs. By understanding the unique offerings of both, CPAs can make well-informed recommendations to their clients based on their accounting workflows, access requirements, and business needs.
Frequently Asked Questions (FAQs)
Q: Can you use both QuickBooks Online and Desktop?
Yes, you can use both, but they function separately. They are not designed as two automatically synchronized versions of the same company file. Intuit provides migration tools for moving company data between Desktop and Online when needed.
Q: When is QuickBooks Desktop better than QuickBooks Online?
QuickBooks Desktop Enterprise may be suitable when a business needs specific desktop-based workflows, advanced inventory functionality, job costing, industry-specific editions, or a larger Desktop user capacity. Existing Pro Plus, Premier Plus, and Mac Plus subscribers can also continue using and renewing their subscriptions.
Q: What are the disadvantages of QuickBooks Online?
QuickBooks Online requires an internet connection for normal use and an ongoing subscription. Features, user limits, reporting capabilities, and customization options also differ between plans, so businesses may need a higher-tier plan for more advanced requirements.
Q: Is QuickBooks Online cheaper than QuickBooks Desktop?
There is no universal answer. QuickBooks Online and currently sold QuickBooks Desktop Enterprise products use subscription pricing, and costs vary according to the plan, number of users, included features, payroll options, and other services. Businesses should compare current Intuit pricing based on the features they actually need.
Q: Can I switch from QuickBooks Desktop to QuickBooks Online?
Yes. Intuit provides a migration tool in QuickBooks Desktop as well as an online migration option for moving supported company data to QuickBooks Online. It is still advisable to review how specific data converts and create a backup before migration.
Q: Can I switch from QuickBooks Online to QuickBooks Desktop?
Yes. Intuit currently provides a migration tool that exports company data from QuickBooks Online and imports it into QuickBooks Desktop. QuickBooks Desktop must be installed and open during the migration process, and businesses should review Intuit’s data-conversion guidance because some data may be handled differently after conversion.
