QuickBooks Online has three levels of online accounting choices: Simple Start(free version), Basic, and Plus. Before making your decision to use QuickBooks Online, you should decide between QuickBooks Online Basic or QuickBooks Online Plus. This article will discuss the differences between these two QuickBooks Online options. Ultimately, you are responsible for ensuring that you select the correct version which should be tailored to the business that you operate. There is also a free version called QuickBooks Online Simple Start. The free version was not considered for this analysis because of its limited capabilities. QuickBooks Online Basic will be collectively referred to as “BASIC” and QuickBooks Online Plus as “PLUS”. Each major difference and brief comment regarding the option’s capability is discussed below:
The following capabilities work only with Plus:
Importing – With Plus you can import your QuickBooks Online basic, Simple Start Edition, QuickBooks Pro or Premier Edition file(s). The import does not work with a Mac.
Estimates – Estimates are important to avoid misunderstandings and can be created and then seamlessly imported to an invoice for billing. This feature is only available in PLUS.
Online Banking – With online banking, payments and receipts do not have to be entered into your QB register. Instead of entering your transactions, you only have to review them as they appear after the download in the QuickBooks check register. When you download QuickBooks compares it then compares the bank’s transactions to the transactions in QuickBooks and identifies discrepancies. It assists you in managing your cash flow, because you always know which checks have cleared the bank, which means you know how much money you have in real time. This feature is only available in PLUS.
Exporting – PLUS provides you with the ability to export transactions and balances to a Microsoft Excel spreadsheet. I can’t begin to impress upon you how importance of this feature for further analysis of your business. It’s a very important feature, since it adds greater reporting capabilities. It gives you flexibility is to analyze different types of financial data.
Class tracking – Within Plus classes provide a system for categorizing transactions that goes beyond the normal ways of assigning transactions to expense or income accounts. With classes, you can categorize each detail line on a transaction. This lets you write one check to the office supply store for items bought for two different business units and still track the business unit for those purchases. For example, suppose you have a consulting business and an installation business. Class tracking is ideal for you if it is typical to have purchases and sales that include both types of work. By specifying the appropriate class on each detail line, you can run a Profit & Loss by Class report that will tell you if your consulting business is more or less profitable than the installation business.
Business tracking – This feature is only in PLUS. You can use businesses to categorize data from different locations, offices, regions, or outlets of the same company. By assigning a business to each transaction as you enter it, you can later see businesses on reports. Assigning businesses also lets you efficiently manage groups of transactions.
Time tracking – This feature allows you to enter your time into a timesheet when you charge by the hour i.e. Website developers,consultants, SEO’s, freelancers, sole proprietors, etc.
Invoicing – Adding fields to track more information on transaction forms is only in PLUS. You can create your own custom fields to include on sales forms.
Reporting and Financial Statements – With BASIC you receive 40 standard financial reports. However, with PLUS you get over 65 standard financial reports and customization and formatting options. If you are interested in a very detailed analysis in a chart format of the reporting differences, please got to Intuit’s knowledge base for comparison of the QuickBooks Online Products.
Budgeting – You can use the budget feature to estimate income and expenses for future years. PLUS budgets’ use a format very similar to a spreadsheet, with a horizontal row for each of your income and expense accounts, and vertical columns for each month or quarter.This is a very rudimentary but provides a bench mark that every company should use.
1099 Reporting – The IRS requires you to issue a 1099-MISC form to workers for nonemployee compensation if the payer is a trade or business and the payments are to a noncorporate entity were $600 or more for services rendered.This feature is only in PLUS
Users-BASIC provides access for one person and your accountant (2 users). However, PLUS provides access for 3 users PLUS your accountant for a total of 4 users. Plus can be expanded to 25 users for an additional cost, which is reasonable.
QuickBooks Support – BASIC includes email support which is provided by Intuit whereas PLUS includes callback and chat support as well as email support also provided by Intuit. Obviously, PLUS support is better, but with BASIC you can resolve your questions by email.
Pricing – BASIC costs $9.99 per month as compared to PLUS which retails for $34.95 per month . However, if you purchase PLUS through a Certified QuickBooks ProAdvisor you can purchase it for $21, which reflects a discount 40% discount, which is currently in effect at this time. Discounts and prices may vary in the future.
Conclusion – For the most part, BASIC works well for smaller companies, whereas PLUS is for small to midsized companies. Before you make your decision, you are able to test drive the software for 30 days for both BASIC and PLUS and, then decide which is best suited for your business. They are other drawbacks, when comparing BASIC and PLUS to Desktop QuickBooks i.e. Pro, Premier, etc.The most significant drawback is that the Online versions doe not provide inventory functionality, unless you purchase an inventory add on. More importantly, its incumbent upon you to ask you CPA or accountant for help in making this important decision.
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