QuickBooks Desktop Error H505 – Causes and Solutions

QuickBooks Error H505 is a common issue in multi-user mode. It appears when QuickBooks Desktop cannot access a company file stored on another computer (the server). This usually happens when switching to multi-user mode or opening a file over the network.

The error message often reads: “You are trying to work with a company file that is located on another computer, but that computer needs additional installation and setup (H505).”

In simple terms, the connection between QuickBooks and the server hosting the file is blocked. Error H505, along with similar codes (H101, H202, H303), points to network or hosting setup problems that stop QuickBooks from communicating with the server.

This guide explains the main causes of Error H505 and walks you through practical steps to fix it in QuickBooks Desktop for Windows.

Causes of QuickBooks Error H505

QuickBooks Error H505 occurs when workstations can’t connect to the server hosting the company file. Common causes include: 

• Incorrect Hosting Setup – Workstations are mistakenly set to host the file. Only the server should host multi-user access, while all workstations must have hosting turned off. 
• Database Server Manager Not Running – The server may not have QuickBooks Database Server Manager installed or active, preventing access to the company file. 
• Firewall or Security Blocking Connection – Firewalls or antivirus software can block the ports QuickBooks needs (such as 8019), stopping multi-user communication. 
• Corrupt or Missing .ND File – This small network configuration file may be damaged or absent, preventing QuickBooks from locating the server. 
• DNS or IP Issues – Incorrect DNS settings or changed IP addresses can keep workstations from resolving the server’s location. 
• QuickBooks Services Stopped –Required services, such as QuickBooksDBXX and QBCFMonitorService, may not be running or set to auto-start.   
• Other Factors – Outdated QuickBooks versions, corrupted system files, or an unavailable server can also trigger the error. 

Important: Make sure QuickBooks and the Database Server Manager are installed on the server before attempting any fixes. Without them, multi-user mode won’t work. 

Solutions to Fix QuickBooks Error H505

There are several ways to fix Error H505. You don’t need to try them all—start with Method 1 and move down the list until QuickBooks opens without errors. After completing each step, restart QuickBooks to check if the issue is resolved.

Method 1: Repair Network Issues with QuickBooks Tool Hub

QuickBooks Tool Hub is a free utility that includes troubleshooting tools, such as Database Server Manager and File Doctor. It’s often the simplest first step to fix Error H505.

QuickBooks Tool Hub is Intuit’s official troubleshooting utility. It includes tools like Database Server Manager and File Doctor, which automatically detect and fix common network and company file issues that trigger Error H505. This is the quickest and safest place to start.

Step 1: Download and Install QuickBooks Tool Hub

1. Close QuickBooks on all computers.
2. Download the latest version of QuickBooks Tool Hub from Intuit’s official website.
3. Open the downloaded file (QuickBooksToolHub.exe) and follow the on-screen prompts to install it.
   

   

4. Once the installation finishes, double-click the Tool Hub icon on your desktop to open it.

Step 2: Run QuickBooks Database Server Manager

1. In Tool Hub, select Network Issues.
2. Click QuickBooks Database Server Manager. If prompted, install it.
3. In the window, locate your company file folder. If it’s not listed, click Browse to find it.
4. Click Start Scan.
   • The tool will automatically configure firewall settings and network permissions for QuickBooks.
5. When the scan is complete, close Database Server Manager.

Step 3: Run QuickBooks File Doctor (If Needed)

1. In Tool Hub, select Company File Issues.
2. Click Run QuickBooks File Doctor. (It may take a minute to open.)
3. From the dropdown, select your company file or browse to locate it.
4. Choose Check your file and network, then click Continue.
5. Enter the QuickBooks Admin password if prompted, then click Next.
6. Allow the scan to complete. File Doctor will repair any file or network issues it detects.

Step 4: Test Multi-User Mode on All Systems

1. Open QuickBooks on each workstation where you see Error H505.
2. Go to File > Switch to Multi-User Mode.
3. If you use your server computer as a workstation, make sure to test it as well.
4. If the company file opens without error on all machines, the issue is resolved.

Method 2: Verify the Hosting Settings on All Computers

Error H505 often occurs when more than one computer is set to host the company file. In a proper multi-user setup, only the server should host, and all workstations must have hosting turned off.

Steps:

1. On Each Workstation:
   • Open QuickBooks (without opening the company file).
   • Go to File > Utilities.
   • If you see Stop Hosting Multi-User Access, select it to disable hosting.
   • If you see Host Multi-User Access, leave it as is.
   • Repeat this on every workstation.
2. On the Server:
   • Open QuickBooks on the server computer.
   • Go to File > Utilities.
   • If you see Host Multi-User Access, click it to enable hosting.
   • If you see Stop Hosting Multi-User Access, leave it as is (the server is already hosting).
     

     

3. Test Multi-User Mode:
   • Restart QuickBooks on each workstation.
   • Open the company file in multi-user mode.

With only the server hosting, conflicts are eliminated, and Error H505 should clear if the hosting misconfiguration was the cause.

Method 3: Ensure QuickBooks Services Are Running on the Server

For multi-user mode to work, two Windows services must be running on the server: QuickBooksDBXX (where XX depends on your version) and QBCFMonitorService. If either is stopped, workstations won’t connect.

Steps:

1. On the server, press Windows + R, type services.msc, and press Enter.
2. In the Services window, find QuickBooksDBXX.
   • Example: QuickBooks 2023 uses QuickBooksDB33, QuickBooks 2024 uses QuickBooksDB34.
     

     

   • If you have multiple versions, you may see several DB services.
3. Double-click the service.
   • Set Startup Type to Automatic.
   • If the status is not Running, click Start.
4. Go to the Recovery tab. For First failure, Second failure, and Subsequent failures, choose Restart the Service. Click Apply and OK.
   

   

5. Repeat these steps for QBCFMonitorService.
6. Close the Services console, then restart QuickBooks on the server and each workstation.
7. Switch to multi-user mode to check if Error H505 is resolved.

Making sure these services are active ensures the server can handle multi-user connections.

Method 4: Configure Windows Firewall and Security Settings for QuickBooks

Firewall or security software can block QuickBooks from communicating over the network, which often leads to Error H505. Setting up proper firewall rules ensures QuickBooks can connect freely between the server and workstations.

Step 1: Run QuickBooks File Doctor First

Before manual configuration, try the automated fix:

1. Open QuickBooks Tool Hub on the server.
2. Go to Company File Issues and run QuickBooks File Doctor.
3. Select Check your file and network, then click Continue.
4. Allow the tool to scan and apply necessary firewall changes.

If the issue persists after running File Doctor, continue with the manual steps below.

Step 2: Add Firewall Port Exceptions (Inbound and Outbound)

QuickBooks Desktop uses specific ports depending on the version. You’ll create inbound and outbound rules for these ports.

1. Open the Start menu and search for Windows Defender Firewall with Advanced Security, then press Enter.
   

   

2. Select Inbound Rules → New Rule.
3. Choose Port, then click Next.
4. Select TCP and enter the port numbers for your QuickBooks version:
   • QuickBooks Desktop 2020 and later: 8019, XXXXX.
   • QuickBooks Desktop 2019: 8019, XXXXX.
   • QuickBooks Desktop 2018: 8019, 56728, 55378–55382.
   • QuickBooks Desktop 2017: 8019, 56727, 55373–55377.

Note: XXXXX is the dynamic port number assigned to your QuickBooks version. You can find this in the Port Monitor tab of QuickBooks Database Server Manager on the server.

5. Click Next, choose Allow the connection, then click Next again.
   

   

6. If prompted, make sure all profiles (Domain, Private, and Public) are checked. Click Next.
7. Create a rule name like QBPorts(2024) or QBPorts(Year).
8. Click Finish.
9. Repeat the same steps under Outbound Rules to create a matching outbound rule.

Step 3: Add Exceptions for QuickBooks Executable Files

Next, allow QuickBooks program files through the firewall:

1. In Windows Defender Firewall with Advanced Security, go to Inbound Rules → New Rule.
2. Select Program, then click Next.
3. Browse and select each QuickBooks executable file one by one. Common files include:
   • QBW32.exe
   • QBDBMgrN.exe
   • QBCFMonitorService.exe
   • QBServerUtilityMgr.exe
   • FileManagement.exe
   • Dbmlsync.exe
   • AutoBackupExe.exe
   • IntuitSyncManager.exe (if applicable)
4. Choose Allow the connection, click Next, ensure all profiles are marked, then click Next.
5. Give each rule a descriptive name (e.g., QBProgram_QBW32) and click Finish.
6. Repeat the same process under Outbound Rules.

Step 4: Update Antivirus or Third-Party Firewall Settings

If you use antivirus or third-party security software, make sure:

• The same ports are open.
• The same executables are added to the trusted/exclusions list.
• If QuickBooks works only when the software is disabled, update its settings to permanently allow QuickBooks.

Step 5: Restart and Test Multi-User Mode

1. Restart the server and all workstations to apply the firewall changes.
2. Open QuickBooks on a workstation and go to File > Switch to Multi-User Mode.
3. If the firewall settings were the issue, Error H505 should now be resolved.

Method 5: Repair or Recreate the Damaged Network Data (.ND) File

The Network Data (.ND) file allows QuickBooks to access company files in multi-user mode. If it’s damaged or missing, Error H505 can occur. Recreating this file often fixes the issue.

Steps:

1. Locate the .ND File
   • On the server, go to the folder where your company file (.QBW) is stored.
   • Look for a file with the same name as your company file, but ending in .ND (e.g., CompanyFile.QBW.ND). 
2. Rename the .ND File
   • Right-click the file and select Rename.
   • Add .old or .bak to the end (e.g., CompanyFile.QBW.ND.old). 
3. Recreate the File 
   • Option A: Open QuickBooks Database Server Manager and rescan the folder with your company file. This will generate a new .ND file. 
   • Option B: On the server, open QuickBooks and go to File > Utilities > Host Multi-User Access. Toggling hosting or opening the company file in multi-user mode can also create a new .ND file. 
4. Test Multi-User Mode
   • From a workstation, open the company file again.
   • If the .ND file was the problem, Error H505 should no longer appear.

Refreshing the .ND file clears out old or corrupted data and gives QuickBooks a clean configuration for network access.

Method 6: Check Folder Permissions and Sharing Settings on the Server

Error H505 can occur if the folder containing your company file doesn’t have the right permissions. The QuickBooks Database Server user (QBDataServiceUserXX) and all workstations must have read/write access to this folder.

Step 1: Open Folder Properties → Security → Advanced 

• Right-click the folder storing your company file → Properties → Security → Advanced.
• Select QBDataServiceUserXX and click Edit.
• Ensure these permissions are set to Allowed:
  • Traverse Folder / Execute File.
  • List Folder / Read Data.
  • Read Attributes.
  • Read Extended Attributes.
  • Create Files / Write Data.
  • Create Folders / Append Data.
  • Write Attributes.
  • Write Extended Attributes.
  • Read Permissions.

Step 2: Grant Full Control if needed

• If those permissions are missing or incorrect:
  • In Properties → Security → Edit, select QBDataServiceUserXX → check Full Control, then click Apply → OK.
  • Make sure these settings are applied to subfolders and all files.

Step 3: Adjust Permissions in Intuit / QuickBooks Supporting Folders

Repeat Steps 1 & 2 for these folders (if present on the server):

• C:\ProgramData\Intuit\Entitlement Client\vX.
• C:\ProgramData\Intuit\QuickBooks <version>.
• C:\ProgramData\Common Files\Intuit.
• C:\Users\Public\Public Documents\Intuit\QuickBooks\Company Files.
• \Sample Company Files etc.

Step 4: Set Windows Sharing Permissions

• Go to the folder’s Properties → Sharing → Share → Add.
• Add QBDataServiceUserXX, set Permission Level = Full Control, then click Share, OK.

Step 5: (If the Security Tab is hidden on Windows Home)

• Boot into Safe Mode.
• Repeat Steps 1 through 4 in Safe Mode, because the Security tab may not show in normal mode.

Step 6: (Optional fallback) Add “Everyone” with Full Control for testing

• If “Everyone” is not in the user list, click Add, type Everyone, grant Full Control, then Apply → OK.
• This is a temporary test; remove “Everyone” after confirming this solves the issue if needed.

Step 7: Restart Services & Test Multi-User Mode

• Restart QuickBooksDBXX and QBCFMonitorService so permission changes take effect.
• On a workstation, open QuickBooks → File > Switch to Multi-User Mode.
• If permission settings were the cause, the company file should now open without Error H505.

Best Practices to Prevent Multi-User Errors (H505)

Staying updated, maintaining a clean network setup, and ensuring QuickBooks has proper access will help prevent H505 and other multi-user errors. Follow these guidelines to reduce the chances of it coming back:

• Use Only One Host – Ensure only the server computer hosts the company file. All workstations must have hosting turned off. Check the hosting status if you make changes to your setup.
• Keep QuickBooks Updated – Always install the latest updates and releases. Updates often include fixes for stability and network issues.
• Maintain Network Health – Use a stable, wired connection for the server whenever possible. Avoid hosting QuickBooks on a NAS device; always use a Windows-based server or computer.
• Configure Security Software – Add firewall and antivirus exceptions for QuickBooks programs and ports. Re-check rules after updates or new installations.
• Run Database Server Manager for New Files – When you add or move company files, rescan them with QuickBooks Database Server Manager to generate proper .ND files.
• Perform Periodic Maintenance – Occasionally restart the server or QuickBooks Database Server service to clear stale connections. Ensure QuickBooksDBXX and QBCFMonitorService are set to restart automatically if they fail.
• Check User Account Permissions – Confirm that QBDataServiceUser and other QuickBooks service accounts have the correct permissions and aren’t restricted by Windows password or policy changes.
• Back Up Regularly – Maintain consistent backups of your company file to ensure quick recovery in the event of errors or data loss.

Need Help?

Need expert help with QuickBooks setup, troubleshooting, or hosting? Contact Ace Cloud Hosting for 24/7 support and secure cloud hosting solutions that keep your QuickBooks running smoothly, without the errors.

Host QuickBooks in the cloud to gain not only uninterrupted access to your accounting data but also unlock dedicated support designed to keep your business moving forward without errors or downtime.