An Analysis of QuickBooks Online Basic Compared to QuickBooks Online Plus
Tuesday, August 4th, 2009
QuickBooks Online has three levels of online accounting solutions packages: Free, Basic, and Plus. After making your decision to use QuickBooks Online, the next step is to decide between QuickBooks Online Basic and QuickBooks Online Plus. This article will address the differences between the two alternatives. Any accounting solution should be tailored to the kind of business you operate. There is also a free version of QuickBooks, however because of its limited functionality it was not considered for this analysis. For purposes of clarity I will abbreviate QuickBooks Online Basic as “BASIC” and QuickBooks Online Plus as “PLUS”. Each significant difference between the two alternatives is discussed below:
Set forth below are the functionalities that work only with Plus:
Importing -By using Plus, you are able to import your Simple Start Edition,QuickBooks Online basic, QuickBooks Pro or Premier Edition file(s) to PLUS only. Unfortunately, this type of import capability 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 – This is very similar to business tracking which is discussed below. This feature is only available in PLUS. Classes allow you to categorize transactions by using classes. With classes you are able to categorize each detail line on a transaction. By way of example, you can write one check to the office supply supplier for items bought for two different business units while being able to track each business unit for those purchases. For example, if you have a consulting firm and an affiliate marketing business. Class tracking is ideal for you, since it common to have purchases and sales that include both types of work. By specifying the appropriate class on each detail line, you can produce a Profit & Loss by Class report that will inform you if your consulting business is more or less profitable than the affiliate marketing business.
Business tracking – You can use PLUS to categorize data from different locations, offices, regions, or outlets of your company. You can assign each transaction to each business. 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. A great use of this would be for different rental properties.
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 – With Plus also you can customize the invoice.This is another reason to try both to see what works for you.
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 regulations of the Internal Revenue Service require that a taxpayer issue a 1099-MISC form to its workers for nonemployee compensation providing 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 offered 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.
Price – BASIC costs $9.99 a month as compared to PLUS which according to the Intuit website is $34.95 per month. However, if you purchase PLUS by using a Certified QuickBooks ProAdvisor you can purchase it for $21, which is net of a discount 40% discount, which is currently in effect at this time. Discounts and prices may change in the future. There are no annual contracts.
Summary – Generally speaking, BASIC is for smaller companies, whereas PLUS is for small to midsized companies. Before you make your decision, you can test these small business accounting solutions for 30 days for both BASIC and PLUS and decide which is best suited for your company. They are other inherent limitations when comparing BASIC and PLUS to Desktop QuickBooks i.e. Pro, Premier, etc.. By far the most significant limitation is that the Online versions do not provide inventory capabilities, unless you purchase an inventory add on. Finally, its very important to ask you CPA or accountant for help in making this important decision.
