When I was a boy I recall asking my Dad questions like “Which is better – Cubs or Sox? Or mountains versus oceans for a vacation? Or stick shift or automatic for a new car?” And whenever my question basically boiled down to a choice between two equally compelling options, Dad would reply, “Well, that’s why they make chocolate and vanilla ice cream.” For the record, he was a 100% chocolate guy.
With close to 20 years in the field as a QuickBooks guru, I’ve been asked countless questions about QuickBooks. Many of them obvious, some of them ridiculous, and a few of them thought provoking. But when the questions come from folks new to QuickBooks the most frequently asked question is pretty straightforward – “Do I go with the desktop version or the online version?” Because you (or someone you know) may also be new to QuickBooks, here’s how I answer that question. “It depends; what flavor of QuickBooks do you like?”
QuickBooks is accounting software made by Intuit. It comes in two versions. There is a desktop version. This is good old fashioned software that you buy and install on your computer. Your financial data lives on your computer. (Mac users have their own version of QuickBooks. It is almost identical to the PC version, so for the sake of this piece we’ll consider the Mac version to be a desktop version.) Intuit also offers the QuickBooks online version. It is sold using the software as a service model and carries a monthly subscription fee. Both flavors, I mean versions, of QuickBooks perform the basic (and then some) accounting functions that the average small business owner might need to run their growing enterprise. So here are my criteria for deciding which version to use in your company.
Go with the desk top version of QuickBooks because:
- Lower cost over time. You’re not locked into a monthly fee.
- You don’t need multiple users simultaneously accessing the company data. The desktop version comes with a license that gives one user access to the file at any point in time. You can have other users; they just can’t be in your QuickBooks file at the same time.
- You work in the trades or make your money with large projects. Both versions of QuickBooks can handle job costing and project profitability. The desktop version does this work with more ease and grace. Its reporting functions around job and project profitability are also more robust. If progress invoicing comes into play in your world, the desktop version is the only QuickBooks solution available. And only the desktop version can provide budget to actual reports at the job or project level.
- Your business has multiple profit centers. Again, both versions can handle an income statement for a business with multiple profit centers. The desktop version simply does it better and easier. And only the desktop version can produce a balance sheet for multiple profit centers.
- You’re a baby boomer and you love the sense of security that comes with owning software. You can still get physical/tangible CDs with your QuickBooks desk top purchase. You have to request them from Intuit, but they’re available.
Go with the online version of QuickBooks because:
- Your business has multiple physical locations. Anywhere there’s internet, there’s QuickBooks online.
- More than one person needs to be in QuickBooks at a time. The online version includes 5 users, all of whom can be in QuickBooks at the same time.
- You are an automation freak. With QuickBooks online, many functions can be made automatic. And the automation works better than the desktop. Sending invoices by email. Receiving payments from customers. Emailing financial reports with daily, weekly, or monthly schedules. Importing transaction information on a daily basis from your bank or credit card.
- You need FIFO costing for your inventory. The online version uses FIFO. The desk top version uses the average cost method to value your inventory. (Full disclosure – there is the expensive QuickBooks Enterprise version. It can handle FIFO and is basically a desktop version on steroids.)
- You are an early adapter with technology. There are many 3rd party software solutions that connect to QuickBooks. While many of these work with both versions of QuickBooks, you have far more options with the online version.
- Your whole world is on your smart phone. The online version has a stripped down version that functions as an app for an iPad, iPhone, or Android.
- You are a millennial and love the freedom of living in the cloud. The rest of your life is already online and stored in the cloud. Why not the company books?
So if you find yourself at the QuickBooks store, I hope you have a better sense of what flavor to ask for. And if you find yourself struggling because what you really want is Rocky Road or Butter Pecan or Mint Chocolate Chip, I encourage you to get a hold of me. I’d be happy to help you look at your preferences, habits, and circumstances and figure out what flavor, I mean version, of QuickBooks is best for your business.
Wishing you lots of positive cash flow.
What Can I Learn Today to Improve Our Financial Performance?
You can hear when an engine is running smoothly—or racing or sputtering. The same is true for the financial drivers of your business.
You just need to know what to listen for. The good news is that your numbers are talking all the time!
Here are the best ideas we can find on how to ask your business for the information you need, to understand what it says, and take action on what you learn.