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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”. The free version does a provide a decent introduction to QuickBooks with a few limitations such as five customers. However, it’s good if you want to write up a full year’s transactions without vendor or customer history. You should give it a try by going to Intuit’s website. Each significant difference and brief comment regarding the functionality is discussed below.

The following capabilities work only with Plus:

Importing – With Plus you can import your QuickBooks Online basic, Simple Start Edition, QuickBooks Pro or Premier Edition file(s). The import 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 – Payments and receipts do not have to be entered into your QB register when you use Online banking. Instead of entering then, you only have to review them. When you download from your bank, QuickBooks is able to compare the bank’s transactions to your transactions in QuickBooks and identifies differences. Plus assists you in managing your cash flow, because you know which checks have cleared the bank, which helps you understand how much money you have in real time. This feature is only offered in PLUS.

Exporting – You can export transactions and balances to a Microsoft Excel spreadsheet only in PLUS. This is a very important feature, since it adds greater reporting capabilities. It gives you flexibility is obtaining and analyzing different types of financial data .

Class tracking – Within Plus classes provide a system for categorizing transactions that goes beyond the normal ways of assigning transactions to expense or income accounts. With classes, you can categorize each detail line on a transaction. This lets you write one check to the office supply store for items bought for two different business units and still track the business unit for those purchases. For example, suppose you have a consulting business and an installation business. Class tracking is ideal for you if it is typical to have purchases and sales that include both types of work. By specifying the appropriate class on each detail line, you can run a Profit & Loss by Class report that will tell you if your consulting business is more or less profitable than the installation 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 – 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 – Adding fields to track more information on transaction forms is only in PLUS. You can create your own custom fields to include on sales forms.

Reporting and Financial Statements – BASIC provides 40 standard reports whereas PLUS provides over 65 standard reports plus customization and formatting. A comprehensive analysis in a chart format of the reporting differences can be found at Intuit’s knowledge base for comparison of the QuickBooks Online Products.

Budgeting – You can use a budget to estimate future income and expenses. Moreover, PLUS budgets’ uses a format 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 feature is only in PLUS

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.

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.

Cost – BASIC costs $9.99 a month whereas PLUS according to the Intuit website is $34.95 per month. However, if you purchase PLUS by utilizing a Certified QuickBooks ProAdvisor you can buy the product 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.

Summary – BASIC works satisfactorily for smaller companies, whereas PLUS works well for small to midsized companies. Prior to making your decision, you can test drive the software for 30 days for either or both BASIC and PLUS and, then decide which is the best software platform for your business. They are other disadvantages when considering BASIC and PLUS to a Desktop QuickBooks i.e. Pro, Premier, etc. The most significant disadvantage is that the Online versions do not provide inventory functionality. You may be able to overcome this disadvantage by purchasing an inventory add on. Prior making a decision of software selection its important for you to have a discussion with your CPA or accountant concerning which QuickBooks Online accounting package is best suited for you and your business.

Learn how QuickBooks Online offers the essential online accounting tools to manage your business and the freedom to access your financials from work, home, or the on the road,. Sandor Lenner, C.P.A. has been providing accounting services for 35 years. He is also a Certified QuickBooks Pon the road,visor and works as a part-time consultant for a Miami Accounting CPA firm.

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