When we took to the internet and asked small business owners what type of accounting software they rely on, we expected a variety of answers. Instead, in the hundreds of tech recommendations we received, QuickBooks was the only accounting software mentioned. That said, different entrepreneurs had strong opinions on which version of QuickBooks was the best.
Note: QuickBooks comes in an online and a desktop version. We didn't include overviews of the desktop versions of QuickBooks in this guide because they're more expensive and don't have any added functionality, and even Intuit is pushing its business customers away from desktop products and toward the online versions, stating on the QuickBooks website that "3 out of 4 customers get more work done with QuickBooks Online vs. QuickBooks Pro."
Comparison shopping between all these options can be daunting, especially if you've never used accounting software before. So, we dug into the details of each version of QuickBooks and created this guide.
QuickBooks Online plans were overwhelmingly more popular with the entrepreneurs we spoke to than the desktop versions of the product. The popularity of QuickBooks Online is likely because it is less expensive than the desktop version, can be used on mobile devices and has no contract, giving entrepreneurs the freedom to upgrade or downgrade at will.
Self-Employed and Self-Employed Tax Bundle
There are technically two versions of QuickBooks Self-Employed being sold, but the QuickBooks features are the same at both subscription levels. However, QuickBooks Self-Employed Tax Bundle also includes TurboTax. The basic QuickBooks Self-Employed package (without TurboTax) costs $5 a month and gives users access to basic accounting and financial tracking tools tailored to the needs of self-employed entrepreneurs.
With Self-Employed QuickBooks, you can easily separate your business and personal expenses, track your mileage automatically, create and send invoices from anywhere, and maximize your Schedule C deductions. QuickBooks Self-Employed also automatically calculates your estimated taxes on a quarterly basis, which is extremely helpful for freelancers and independent contractors. If you're planning on using TurboTax to file your taxes eventually, you may as well upgrade to QuickBooks Self-Employed Tax Bundle, which costs $12 a month and includes fast file exporting for Schedule C documents as well as one federal return and one state return.
Currently $10 a month, Simple Start offers almost all the functionality of the Self- Employed version (it doesn't have the Schedule C deduction optimization) plus a lot more accounting features. Only one person per subscription can use Simple Start, making it a good fit for microbusinesses but not for SMBs.
With Simple Start, you can track your income and expenses, download and organize credit card and bank transactions, print checks, import data from the Excel or QuickBooks desktop versions, take photos of receipts, grant access to up to two accountants for easy data access, and integrate with available apps. Simple Start also has built-in security features, automatic data backup and more than 20 built-in business reports.
The Essentials package, which is $24 a month, has everything the Simple Start package has but allows up to three different users, making it a viable option for small businesses. QuickBooks Essentials includes over 40 built-in business reports and allows users to compare sales and profits against industry trends.
This service level also streamlines the billing process by making it easy for users to set up invoices to automatically bill, manage and pay bills from vendors, enter bills and schedule the payments for a later date, track billable hours by customer, and handle multiple currencies. On the security side, Essentials has all the basic security of lower-level QuickBooks products, with the bonus that you can control what individual users can access.
The highest-tier QuickBooks Online product, QuickBooks Plus, is $35 a month and grants access to up to five people. QuickBooks Plus boasts more than 65 built-in business reports, includes all the functionality of the lower tiers, and has more robust inventory and analysis options. With QuickBooks Plus, you can track inventory, prepare and print 1099s, track sales and profitability at multiple locations, use class tracking to categorize your income and expenses, and create and send POs.
One major benefit to Plus is that it allows you to create budgets to estimate future income and expenses and to grant employees and subcontractors limited access to your account so they can enter their time worked. The Plus level of QuickBooks Online is a robust tool that goes beyond basic accounting services and crosses over into analysis and employee management, which may not be essential for microbusinesses but is a boon for established and rapidly growing SMBs.
Choose the QuickBooks product that’s right for you. We heard praise for nearly every level of QuickBooks Online, from Self-Employed to Plus. If you're not sure which features you'll need, you can try any of the online QuickBooks versions for free for 30 days. Also, keep in mind that QuickBooks Online has no contract, so you can always upgrade or downgrade as your needs change.