QuickBooks Online Basic Compared to QuickBooks Online Plus

QuickBooks Online has three levels of online accounting choices: Free, Basic, and Plus. Before making your decision to use QuickBooks Online, you have to decide between QuickBooks Online Basic and QuickBooks Online Plus. This article will analyze the differences between the two QuickBooks Online choices. Any small business accounting solution should be chosen to match the type of business you operate. There is also a free version called QuickBooks Online Simple Start, however because of it’s limited capabilities it was not considered for this analysis. Hereafter, QuickBooks Online Basic will be referred to as “BASIC” and QuickBooks Online Plus as “PLUS”. Each significant difference and brief comment regarding the functionality is discussed below.

The following capabilities 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 can be created and then seamlessly imported to an invoice for billing. By using estimates understandings can be mitigated.

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 – With PLUS you can export transactions and balances to a Microsoft Excel spreadsheet. This feature is critical for further analysis of your business.In other words, you can derive information otherwise not easily available to you. It’s an important feature, that should not be be overlooked, since it adds greater reporting and after the fact analysis capabilities.

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 – With PLUS you can categorize data from different locations, offices, regions, or outlets of your company. You are able to assign each transaction to a business. By assigning a business to each transaction as you enter it, you can later see businesses on reports with great detail and clarity. Assigning businesses also lets you efficiently manage groups of transactions.

Time tracking – With Plus you can enter your time into a time sheet when you bill by the hour i.e. consultants, website developers, SEO’s, freelancers, sole proprietors, etc. This feature is only offered in PLUS.

Invoicing – Plus also permits you to customize the invoice.This is another reason to try both to see what works for you.

Reporting and Financial Statements – With BASIC you get 40 standard reports whereas PLUS you get over 65 standard reports. In addition, you also get customization and formatting options. If you want to see a very detailed analysis in a chart format of the reporting differences can be found at Intuits 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. Although this budget format is very simple, it does provide a measurement tool to monitor your business’s actual vs budget.

1099 Reporting – The IRS requires you to issue a 1099-MISC form to workers for nonemployee compensation if 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 in PLUS

Number of Users – BASIC provides access for you and your accountant (2 users). Whereas PLUS provides access for 3 users PLUS your accountant(4 users). Plus can be expanded to 25 users for an additional cost.

Support – BASIC includes email support provided by Intuit whereas PLUS includes callback and chat support as well as email support . Obviously, PLUS support is better, but with BASIC you can still get your questions answered.

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.

Conclusion – For the most part, BASIC works well for smaller companies, whereas PLUS is for small to midsized companies. Before you make your decision, you are able to test drive the software for 30 days for both BASIC and PLUS and, then decide which is best suited for your business. They are other drawbacks, when comparing BASIC and PLUS to Desktop QuickBooks i.e. Pro, Premier, etc.The most significant drawback is that the Online versions doe not provide inventory functionality, unless you purchase an inventory add on. More importantly, its incumbent upon you to ask you CPA or accountant for help in making this important decision.