Which Version of QuickBooks Should You Use?

QuickBooks Online vs. QuickBooks Pro

Despite the popularity of its cloud-based services, QuickBooks continues to update and support QuickBooks Pro, its desktop solution. We haven’t covered the desktop software in this guide because QuickBooks Online is the obvious choice for businesses of all sizes.

QuickBooks Pro is not only significantly more expensive, but it also lacks the functionality, integrations, flexibility, add-ons and enterprise-grade security features that come with QuickBooks Online. It’s no wonder that Intuit itself pushes customers away from its on-premises solutions.

Unless your business or industry has stringent security and compliance requirements necessitating local data storage, choosing QuickBooks Online over QuickBooks Pro is a no-brainer. This is especially true because QuickBooks’ desktop versions are being steadily phased out, with older versions not receiving any critical security updates since June 2021.

QuickBooks Online plans

QuickBooks offers different versions of its products with varying functionality and tiered pricing to cater to a wide range of user requirements and situations while not overwhelming small business owners and freelancers. Two key options are QuickBooks Online (QBO) and QuickBooks Self-Employed (QBSE).

QuickBooks Online

QBO is a simple yet dynamic tool that provides a host of features and functions that cover every aspect of accounting, bookkeeping and financial reporting at a small or midsize business.

It takes care of basic accounting tasks such as creating and sending invoices, tracking inventory, and recording transactions, along with more advanced reporting and financial management solutions such as accounts payable and receivable, employee records, and tax filings. QBO also allows third-party apps and integrations to enhance the capabilities of small businesses.

While these features can add plenty of value to businesses of all sizes, they can also be quite overwhelming at first, and involve a significant learning curve for entrepreneurs with no training in accounting. QBO is also more expensive, ranging from $12.50 to $90 per month for the Advanced plan.

Which version of QuickBooks Online should I get?

The version of QuickBooks Online you should get depends on what you need it for and your budget. Here’s a quick breakdown of the plans:

QuickBooks Self-Employed

As the name indicates, QBSE is a tool aimed at self-employed individuals, or entrepreneurs with simple business structures, with no employees or contractors, such as realtors, freelancers, Uber and Lyft drivers, and independent consultants.

This is the least expensive version of QuickBooks, starting at just $7.50 per month. It has essential features that make it perfectly suited for users with less time to spend on accounting and a simple and intuitive user interface.

Apart from the basics, such as keeping track of transactions and sending invoices to customers, QBSE comes with powerful features that help you categorize business income and create expense reports, snap pictures of bills, and track mileage for Schedule C reports with ease.

Which version of QuickBooks Self-Employed should I get?

Here’s a breakdown of the QuickBooks Self-Employed plans to help you decide.

Buying tips for online versions of QuickBooks

You’re too busy to read through a bunch of software descriptions and figure out which QuickBooks version makes sense for you – we get it! These tips aren’t applicable to everyone, but they are accurate for a majority of small businesses with standard accounting software needs.

1. Start with a basic subscription tier.

Remember, software companies like Intuit will always allow you to upgrade your services in the future. Software reps might push you to buy more sooner, but there is absolutely no reason to sign up for a higher subscription level than you think you need.

It is nearly always preferable to start small and increase your subscription as needed rather than start at a high subscription level, discover you don’t use most of the features, and then downgrade your account. [Read related article: Guide to the Best Receipt-Tracking Tools]

2. Select the right product for your business size.

If you run an enterprise business, do not buy products intended for small businesses. Unless your business is in transition and still growing toward the enterprise level, most small business products will not suit your purposes. Intuit and other accounting software companies make plenty of products just for enterprise users that suit your needs better.

3. Choose a tier that supports the number of people who will use the software.

Don’t try to save money by sharing one account among many employees. The entry-level QuickBooks versions, like Simple Start ($12) and QuickBooks Self-Employed ($7), only support one user. It’s tempting to stay at that level and simply share one account among multiple team members, but this is a precedent you will regret setting. QuickBooks data is only as valuable as it is accurate; allowing multiple people to use one account eliminates accountability or transparency and breeds errors.

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4. Consider hiring a CPA or other financial expert to help you understand reports.

Advanced accounting reports should always be interpreted by someone with a background in data analysis. QuickBooks data can become complicated very quickly, and while reporting tools are certainly helpful, they are not a viable replacement for an educated and experienced data analyst. Numbers don’t lie, but only looking at certain numbers and prizing some types of numbers (like averages) more than others can be wildly misleading. If you do not have any background in mathematics, statistical analysis, data or business intelligence, the conclusions that seem obvious to you from your QuickBooks reports might not be correct or mathematically sound so in this case hiring a CPA would definitely help. [Read related article: 8 Types of Accounting]

5. Choose accounting software that works with the other programs you use.

Intuit, the company that owns QuickBooks, sells lots of software and apps. It’s wise to look at a software company’s whole ecosystem of products before adopting a solution from it. It’s often beneficial to use multiple products from one company, because they all work together, so be strategic about the system you adopt.

Mona Bushnell contributed to the writing and research in this article.