Introduction to QuickBooks Online

This year, I have finally seen what looks like an irreversible pattern; more than half of my new clients are using QuickBooks® Online (or proactively asking to be set up in QuickBooks Online specifically). So, I have devoted quite some time in the past few months on guiding my clients into navigating the the new (at least new for them) waters of QuickBooks Online.

First, it is important to point out that, depending on the circumstances, there are two entirely different experiences with QuickBooks Online:

  1. Clients converting from QuickBooks Desktop (Pro, Premier, Mac or Enterprise)
  2. Clients that have some other type or no previous accounting System

Let me elaborate. Clients converting from QuickBooks Desktop, unfortunately, already have certain expectations of what “QuickBooks” is suppose to be like, so the first expectation I like to set with my clients is: “This is a completely reimagined accounting system built from the ground up, bears the same name as its Desktop counterpart, and consequently, some items are very similar and some are completely different. I always get asked this question right away: “What is different?” And, what a loaded question that is! So, I start with the obvious differences:

  • It is 100% cloud based, which means there’s no need for a server or local area network, and it can work with PC, Mac, Tablet or Smartphone. This mean there’s no computer/network drama, which you get in QuickBooks Desktop in multi-user mode (which happens to be one of the most common issues that technical support has to deal with).
  • While QuickBooks Online (QBO) has a feature code named Express Web Connect, it’s just called “downloaded Transactions” to the customer’s eyes. But, in a nutshell, it allows for a direct bank connection that can download bank transactions behind the scenes, similar to Desktop’s Direct Connect Feature. However, what’s BETTER about this is that is FREE, whereas most banks charge $10-$15 for Direct Connect.
  • QBO also has seamless integration with 3rd party apps. As a result, anyone looking into connecting their accounting system with top rated apps, such as T-Sheets (for time tracking), Method CRM (for customer relationship management) and Bill.com (for Accounts Payable Management), is able to do so behind the scenes, without the need of a clunky sync tool (which is how these apps connect to QuickBooks Desktop).
  • Seamless collaboration with Accountant (no more of sending those “Accountant’s Copies” that I dread).
  • And, some neat features, which include Automation of Reports, significant improvement on Bank Rules when downloading transactions, Invoice automation with QuickBooks Payments, etc.

While it seems that the move to QBO is all but positive, there are some serious hurdles that I, as an accountant/consultant, have had to over come:

  • The QuickBooks user is now paying a monthly fee vs. purchasing/upgrading software every 3 years. In some cases, it turns out to be more expensive, and other cases, less expensive (specially considering the disappearance of QuickBooks related IT costs). At the end, it is an easy hurdle to overcome, considering you are getting the following in exchange of the monthly fee: QuickBooks + an always-on and no need to backup service.
  • The is a substantial change in workflow and navigation.
  • There are also a plethora of differences in the features. I often say that QuickBooks Desktop is a like a laptop, with tons of buttons and controls. And, QBO is like an iPad, with a single button to do it all. That’s not a great analogy, but it speaks a lot of technology’s evolution towards simplicity. But, with this simplicity comes a long list of features that QuickBooks Desktop can do and QuickBooks Online simply cannot do (Disclaimer: as of today, and without the need of a 3rd party app). Among the most predominant are the lack of Sales Orders (Inventory Backorders), Payroll Job Costing (Essential to Contractors and Construction Industry) and Invoice Customization (QBO is very basic on this end), which are features that are not yet available in QuickBooks Online. There is a great document by Woody Adams that depicts feature by feature and how it translates into QBO from Desktop.

And, finally, the other great resource for people doing conversions from QBO into Desktop is this video I recorded with Intuit® Academy with a step-by-step process for conversion.

The other segment of QBO users is the brand new users. There are the small business owners that are setting up QBO as their first accounting system, as well as users that have never used QuickBooks Desktop. Ignorance is truly bliss in this case, as there is no need to deal with the nuance of having to “walk” a client through the process of relearning a tool and accepting that it will be different, and this change being permanent. Anyway, for these new clients, I have three great recommendations that my clients love:

I hope this guide was useful! I often update my website’s Learn QuickBooks Online page with videos and other free resources on learning QBO. Make sure to visit it every couple of weeks for updates!