To start out, let me explain. I’ve been using the Online version for the last 5 months for about 15 hours per week. Thus, I believe that I have enough time invested in the software to properly review its attributes. I will start out by explaining its primary purpose and go into comparing the Online version with its sister versions of Pro and Enterprise. Finally, I’ll cover its best application and alternatives for the reader if they truly desire to use QuickBooks.
Best Reason to Use QuickBooks Online
The purpose of accounting is to record economic transactions and report the results of this activity to owners. Thus, QuickBooks Online passes this test. Also, those individuals inputting data into the system have various levels of skills; you have those individuals with no background in accounting, bookkeepers, accountants and CPA’s. Intuit has a vast knowledge base, training and 3rd party educators that anyone willing to invest 10 to 15 hours of work can enter data into any of the versions of QuickBooks. What makes the Online version stand out?
The Online Version has been on the market since 2013. It was designed to take advantage of the cloud concept of data management. The cloud allows many individuals to modify data for a company remotely and thus a company’s entire data system is available from anywhere. This is no longer the reason to use QuickBooks Online. Why? Well, you can now place pretty much any accounting software on a company’s website. Yes, even put other versions of QuickBooks on a company’s website. This allows all members of the accounting team and owners access. Thus the primary purpose of QuickBooks Online no longer exists. Therefore, Intuit must now make the software as dynamic as the other versions of QuickBooks, especially the Pro and Enterprise versions or risk a declining subscription membership. This is where the Online version falls short, it is too cumbersome to use.
Comparing Online with Pro and Enterprise
I have used the Pro and Enterprise version of QuickBooks since the software was first released to the public. I advocated the software to many clients over the years simply because other accounting software programs had limited resources for training bookkeepers to knowledge bases to help users with the respective software. This is where Inuit excels. There is a vast set of resources for all levels of users. Learning QuickBooks is free and access to problem resolution is easily available from a multitude of websites.
QuickBooks Pro and Enterprise
There is an adage used by many computer and data management consultants. It goes like this: ‘Good data in means the maximum possibility of getting good information out’ via reports. This is true with accounting, good data in means entering economic activity correctly and timely. If this happens, then accountants can prepare reports to owners that have well organized information allowing owners to make good decisions.
Both the Pro and Enterprise version have software report preparation routines that allow someone with experience to prepare really informative reports. With both versions, I can prepare customized spreadsheet reports that answer a multitude of questions for owners. Both versions have the exact same report preparation routine. The Enterprise version comes with at least 40 additional customized reports for the user over the Pro version. I prefer the Pro version because I always customize the reports to the owner’s needs; most of them are similar to the built-in ones in Enterprise, but I’ve learned you have to filter the data anyway, so why buy the deluxe model (Enterprise) when I can purchase the Pro version for a lot less and get it to do the same thing. Yes, I am aware the Enterprise version has other features too. But the most important aspect of accounting is the final set of reports. Data input is exactly the same in both versions. Overall, both the Pro and Enterprise version have a robust ability to create dynamic reports and to do it easily!
As stated above, the real reason for accounting software is to record economic activity and then report this activity. With both recording and reporting, the Online version is inferior to the Pro and Enterprise version. I can’t tell you how many times I have tossed my pencil at my screen in frustration with either entering data or getting information out of the database. Let’s start with something as simple as setting up a customer. With Pro or Enterprise, you simply click on the customer center and then you have access to the entire customer list. With the Online version, you have to click Sales, then Customers and then the ‘Add’ function. Seems similar, but the presentation format in the Online version is much more overwhelming than the Pro and Enterprise presentation. This presentation format makes it more difficult to zoom into a piece of information you want. I use the word ‘cumbersome’ to describe Online against the Pro or Enterprise versions.
This cumbersome aspect of the Online version makes it very difficult to quickly and swiftly add new data. Thus it takes longer to input data and worse, it takes a long time to customize a report! This is the real problem with the Online version. With the Pro or Enterprise version the creator can simply select filters and there are 35 filters to work with and then you can customize that respective filter. Once the user is familiar with the filtering process, report generation is fast and easy. The Online version has a similar selection process. Here too, you select customize and then filters, but your filters are limited in comparison. Thus, it takes longer to customize a report. Again, I use the word ‘cumbersome’.
There are other limitations too. The Online version doesn’t have a robust item list capacity. With both the Pro and Enterprise versions, the user can create both a set of job costing codes and revenue codes. With the Online version, I haven’t been able to do this yet. The costing and revenue are tied together, I’m sure with time and testing I can get this to work, but for now it eludes me. Thus, using the Online version with the construction or manufacturing industry is not a good idea. Creation of invoices is limited in comparison, it is even difficult, actually practically impossible to customize a template with the Online version quickly. I practiced a lot and it still takes me over an hour to create a workable template with the Online version. The online version still has bugs in the sub-routines; asking questions to the professional staff at Intuit to resolve the issue is like asking a 4th grader about nuclear physics. Almost every single time, the person on the end has to ask someone else for help. The Pro and Enterprise versions have been around so long now, the bugs are pretty much non-existent.
As for the accounting level activities of reconciling, creating trial balance adjustments and setting recurring activities; it just simply isn’t easy with the Online version. Again, I find it frustrating, let’s say ‘cumbersome’.
So, why would anyone consider the Online version of QuickBooks?
Best Use for QuickBooks Online
I’ve had to think long and hard about this. The best application of this software is for those businesses that are straight forward in their business interactions with vendors/customers. Transaction activity must be limited and succinct in action. This means, most economic transactions must simply be two line entry requirements. Thus, if you are buying multiple parts or inventory items, the Online version is not an appropriate software. For customer activity, retail type of activity isn’t going to work with the Online version unless you are willing to interface the retail version of QuickBooks with the Online version. Since the retail version is often on a local server, it is simpler to just go ahead and buy the Pro version and interface the two.
Construction and manufacturing are a no-no with the Online version. Again, both industries require job costing and thus the Online version is not a good choice. I think the best application is with a service company that has a limited service model such as professional firms (lawyers, architects and engineers). Other applications could include a real estate broker and landlords, but not those involved in the hospitality industry. Food service (with the exception of a caterer) has too many nightly transactions at the register warranting a more robust version of QuickBooks.
Remember, it was first designed for the cloud concept, but that is no longer a viable reason to use this software. The cloud now allows for companies to load the better versions of QuickBooks and access them remotely.
Alternatives to QuickBooks Online
It is simple to gain access to QuickBooks Online. You simply sign up and you are ready to go. You can do the whole thing and be on your way with accounting start to finish (includes creating your chart of accounts, setting up products and services etc.) within about four hours. I don’t recommend this version for larger business entities, i.e. those doing more than $1,000,000 per year in revenue.
The best solution is to acquire a website and set up a portal allowing your accounting staff to access the system whether at the office or at home. Load the Pro or Enterprise version on this server and simply maintain the software there. YES, it does take longer to do this; to do it correctly takes about 12 to 18 hours of work to have a functioning accounting system. The best part is that you will have a superior accounting software and it will be so much more robust. Furthermore, if you are involved in industries that require job costing, this is a no brainer. If you are involved in a high volume of transaction activity, i.e. more than 100 entry points per day, again, go to a server and load QB’s Pro or Enterprise. The outcomes will be far superior to what you can achieve with the Online version.
It is because the Online version is cumbersome, difficult to create informative reports and limited with its industrial application that I don’t endorse the Online version. Overall, I give it a ‘D+’. It is an accounting software that works. It is easy for a novice to use. Thus for business operations with limited accounting requirements such as professional service companies, this version of QuickBooks will work (again not the best Intuit has to offer). I am a big believer in the feedback loop concept of accounting: good data in, good information out, make good decisions, implement changes and do it all over again. QuickBooks Online is not the best tool for this.
For those of you with questions, please contact me via email@example.com and I’ll respond in a timely manner (typically within 24 hours). Act on Knowledge.