QuickBooks Review: Best Accounting Software for Small Businesses

QuickBooks, by Intuit, is widely recognized as the best accounting software for small businesses. With more than 4.8 million customers around the world, the software is full-featured and easy to use.

QuickBooks offers multiple products, including QuickBooks Pro and QuickBooks Online.

Established in 2000, QuickBooks Pro is a desktop-based product that is more mature than its web-based sibling, QuickBooks Online. However, QuickBooks Online is quickly catching up to Pro -- it has garnered over a million users and underwent a significant redesign in 2013. Though the online version falls under the QuickBooks product line, it's important to understand that this is not simply a web-based version of QuickBooks Pro -- though the two products do have some overlapping functionality, they are two different systems with different features.

Intuit is devoting a lot of resources toward promoting and improving its QuickBooks Online product. When you visit the QuickBooks site, it primarily promotes QuickBooks Online -- you have to dig around a bit in order to find information about the desktop version, QuickBooks Pro. It's not surprising that Intuit is promoting the Online version heavily, since there are many benefits of cloud-based software. Based on our assessment, we think that QuickBooks Online is going to be the more relevant option for small businesses with basic accounting needs. Therefore, this article will focus on highlighting the Online product.

QuickBooks Online Summary

Pros

  • Allows multiple users to access the data at the same time and work simultaneously.
  • Web-based, meaning that it can be accessed on the go, even on a smartphone or tablet.
  • Imports bank transactions directly from your account, which reduces the need for manual data entry.
  • Good for smaller businesses with basic needs.

Cons

  • History tracking (audit log) is difficult to use.
  • Lack of custom reporting -- users often need to export data to Excel and customize the reports themselves.
  • Reports are not as robust as in QuickBooks Pro.
  • Some users report that the servers can be slow, and have reported outages.
  • Users who are most familiar with the desktop version will face a bit of a learning curve, since the interface is different.

Price

  • Most popular package is $40/month ($28/month for the first 6 months).
  • Advanced features (such as job costing and payroll) cost extra.
  • Free 30-day trial.

QuickBooks Online is a basic web-based accounting system that has the ability to handle more complex tasks, such as payroll and job costing, for an additional charge. The primary advantage of QuickBooks Online is that it's 100% web-based, which enables customers to access the software through any device with an Internet connection, including smartphones and tablets. The web-based system also makes it easy for users to collaborate, since multiple users can log on simultaneously. In contrast, the desktop version only lets one person modify data at one time.

Doesn't my practice management software handle this?

The short answer is no. Practice management software is excellent at keeping track of money coming into your business, i.e how much customers pay you, and the amount reimbursed by insurance companies. However, most PMS systems won't keep track of payroll, expenses, and purchases from vendors. This is why you need a specialized accounting system like QuickBooks, so that you can have a complete picture of your business's financial performance.

QuickBooks Online Key Features

Below, we'll discuss some of the key features of QuickBooks Online, and how they can benefit your business.

Accessibility

QuickBooks Online is 100% web-based, which means that it can be accessed from any device with an Internet connection, including tablets and smartphones. This is not the case with desktop systems, which can only be accessed on the computer that has the software installed (or via remote desktop software). Many users like the convenience that cloud-based software offers, which is one of the main reasons that users like QuickBooks Online, even though it is not as mature or full-featured as QuickBooks Pro.

Another powerful feature is that QuickBooks Online enables multiple users to log in and make updates at the same time. This is important because it helps encourage collaboration, and ensures that each user will always have access to the most up-to-date version of the data. This is a great benefit for businesses that need to allow multiple users to access the system simultaneously, rather than limiting access to one user at a time. However, this can introduce other issues, since it can be difficult to track who made what changes, at what time. With this concern in mind, QuickBooks Online includes an "audit log" of who logged in at what times, and of the changes that they made.

QuickBooks Online Audit Log

However, the audit log is a bit difficult to navigate, and it can be hard to identify the exact change that each entry in the log represents. Another downside is that the audit log isn't designed to be easily searchable, so if you want to view the history for a specific item, you will have to manually browse through the audit log. This can get very time-consuming, especially if you aren't able to filter the audit log down to a particular time period.

Invoicing

QuickBooks Online helps you email invoices to customers, who can then pay you with a credit card or bank transfer. You can also easily filter the invoices to identify the customers who owe you the most money, and send them reminders that their payment is due.

Sorting by Customers Who Owe Most Money

Transactions

One great time-saving feature of QuickBooks Online is that you can connect the system to your bank accounts and credit cards, and have the system automatically import any transactions. This greatly reduces the need for manual data entry. However, you'll still have to make sure that transactions are categorized appropriately, and approve transactions before they get imported into the system. If any transactions are miscategorized, it's easy to correctly categorize them by using the dropdown menus.

Importing Transactions from Bank

There can be a learning curve when it comes to importing your transactions and making sure that they're categorized appropriately. However, once you learn how to use this feature, you'll realize that it's one of the most powerful time-saving aspects of QuickBooks Online.

Another important time-saving feature from QuickBooks Online is the ability to take pictures of receipts with your phone, and have them uploaded to the system. This makes it easy to keep track of expenses on the spot, and reduces the need for holding on to receipts for long periods of time.

Reports / Dashboards

When you sign onto QuickBooks Online, you get a quick snapshot of your company's expenses, broken down by various categories. This makes it easy to quickly assess your financial performance over the current month, as well as the previous month.

QuickBooks Online Dashboard

QuickBooks Online also comes equipped with several reports out of box, including P&L statements and A/R Aging Summaries. You can customize these reports by adding filters and by modifying the period of time over which the report is generated, but other than that, you're somewhat limited in your customization capabilities. Many users who want to build more customized reports often export their data to Excel, and then create their reports from there.

Payroll

QuickBooks Online offers payroll capabilities as an add-on module, for an additional charge of $25/month and $5/employee. The payroll feature will send you payroll reminders, as well as payroll tax reminders. User feedback on the payroll module is mixed -- some say that it's easy to use once you get over the initial learning curve, and others say that they prefer to use third-party software for payroll. If your payroll is relatively simple, QuickBooks Online can get the job done, assuming you're comfortable with the additional cost.

Which QuickBooks system is right for you?

If you're a small business looking for accounting software, then QuickBooks is an obvious choice to consider, but which QuickBooks product you select depends on your specific needs.

QuickBooks Pro is the flagship QuickBooks product. Many users are familiar with this product and prefer it over the newer Online version. There are also some features, such as job costing, that are present in Pro that are lacking in the Online product. As time goes on, we expect this feature gap to close, as the Online product continues to attract more users and build out new features.

For this reason, we recommend QuickBooks Online as the appropriate choice for most small businesses with basic accounting needs. This web-based version has a lot of the same functionality that Pro has, but it has two advantages: It enables users to access the system on the go, and it boosts productivity by allowing multiple users to work simultaneously. Though QuickBooks Pro offers the more complete feature set, many users still prefer QuickBooks Online for its web-based flexibility and ease of use.

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