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QuickBooks Online: Features and Pricing. The Ultimate Guide for Small Businesses [Updated 2024]

QuickBooks Desktop is a well-known legacy accounting software that has been around for over 30 years. While it will likely continue to exist, many small and medium-sized businesses are moving their data to the cloud. They want to use mobile devices for accounting transactions, and QuickBooks Online provides this with much ease. Whether you’re a new business setting up accounting software or an existing business transitioning from another accounting platform or QuickBooks Desktop, this post is perfect for you.

In this article, I will walk you through the different versions of QuickBooks Online and their features so you know exactly what to purchase. We will explore how to get started with QuickBooks Online by choosing the right version for your needs.

Currently, there are 239 features compared across all versions of QuickBooks, including the four versions of QuickBooks Online and the four versions of QuickBooks Desktop. For additional research, I’ll provide a link to a detailed spreadsheet in the description so you can review it further.
ALL QuickBooks versions COMPARED by [email protected] (Last Update: 03/07/2024)

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Source: Hector Garcia CPA

What is QuickBooks Online?

QuickBooks Online is a powerful accounting software designed to help small and medium-sized businesses manage their finances efficiently. Developed by Intuit, QuickBooks Online offers a suite of tools for bookkeeping, invoicing, payroll, and more. Its user-friendly interface and comprehensive features make it a popular choice for businesses looking to streamline their financial operations.

QuickBooks holds a significant market share in the accounting software industry, with approximately 40% according to the Enlyft Report. The software boasts over 7 million users worldwide, reflecting its popularity and reliability. In terms of revenue, QuickBooks Online significantly contributes to Intuit’s earnings, accounting for approximately 55% of the company’s total revenue.

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Total net revenue increased by $14.4 billion, or 13%, in fiscal 2023 compared to fiscal 2022. QuickBooks Small Business & Self-Employed segment revenue increased by 24%, primarily due to growth in Online Ecosystem revenue.

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Online Ecosystem includes revenue from:
• QuickBooks Online, QuickBooks Live, QuickBooks Online Advanced and QuickBooks Self-Employed financial and business management offerings;
• QuickBooks Online Payroll;
• Merchant payment processing and bill pay services for small businesses that use online offerings;
• Mailchimp’s marketing automation and customer relationship management offerings;
• QuickBooks Checking; and Financing for small businesses

Online Ecosystem revenue increased $1.3 billion, or 30%, in fiscal 2023 compared with fiscal 2022.

QuickBooks Online Accounting revenue increased 26% in fiscal 2023 compared with fiscal 2022 primarily due to an increase in customers, higher effective prices, and a shift in mix to our higher-priced offerings.

Online Services revenue increased 34% in fiscal 2023 compared with fiscal 2022 primarily from higher Mailchimp revenue due to the timing of our acquisition in the second quarter of fiscal 2022 and increases in revenue from our payroll and payments offerings.

Why We Chose QuickBooks Online as Best for Small Businesses

For years, QuickBooks has been the leading accounting and bookkeeping solution for small businesses. We have consistently found it to be an affordable, all-in-one product, packed with valuable features, supporting multiple integrations, and easy to install and use. Based on business needs, QuickBooks Online from Intuit is our top pick for the best accounting software for small businesses.

While there are several QuickBooks alternatives for specific situations, we find that QuickBooks Online is the best overall choice for small businesses requiring a comprehensive solution.

QuickBooks Online provides everything you need to manage your finances at an affordable price, including accounts receivable and accounts payable features. If you want to customize the software with additional tools, you can choose from hundreds of apps that integrate with QuickBooks Online.

Furthermore, in terms of technology, QuickBooks is far ahead of its competitors. For instance, its automation tools help eliminate the tedious tasks of tracking expenses and bank reconciliations. In short, our research and customer reviews of QuickBooks and its peers have shown that this solution, in particular, has the technology and ease of use to meet the diverse needs of small businesses.

Here’s a table with the pros and cons of QuickBooks Online:

QuickBooks Online’s leading market position means most accountants will be familiar with the software.You can’t easily upgrade the Solopreneur plan.
The software integrates with more than 750 business apps, including Amazon Business, Square, Shopify, PayPal, and QuickBooks Time.The plans limit the number of users, so you need to consider how many people will need access when selecting a plan.
QuickBooks Online’s comprehensive feature set includes multiple built-in reports, such as aged receivables, general ledger, profit and loss, and trial balance.While an excellent one-size-fits-all solution, QuickBooks lacks a few niche features needed by some small businesses.
The Intuit Assist AI tool puts QuickBooks ahead of competitors in terms of AI.

QuickBooks Online: Simple Start – $30/month

Let’s start with QuickBooks Simple Start. Simple Start is the least expensive and simplest version of QuickBooks. It should cost you around thirty dollars per month. This version is ideal for a one-person small business where only one individual manages the business or its accounting. I’ll walk you through the basic features of QuickBooks Online Simple Start.

Track Income & Expenses

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First of all, QuickBooks Simple Start has the ability to track income and expenses through bank feeds. This means you can connect your bank accounts and credit cards to download your transactions, including deposits, expenditures, and credit card charges. You can use the bank feeds feature to semi-automatically create rules to categorize incoming money as income and classify it into specific income categories. Similarly, you can categorize expenses into appropriate categories such as expenses or fixed assets.

Tracking income and expenses is a fundamental feature available across all versions of QuickBooks. This feature is crucial as it allows you to generate a Profit & Loss Report for taxes and prepare your balance sheet at the end of the year, helping you get ready for your tax return.

Invoices and Accept Payments

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On top of that, you will also be able to create invoices and accept payments. This means that when a customer owes you for a service or product, you can give them an invoice because you are going to provide the service or deliver the product first and get paid in the future.

QuickBooks allows you to email that invoice and remind your customer to pay. Additionally, you can add QuickBooks Payments, which enables you to accept payments online. Basically, your customer can pay you via ACH by entering their bank account number or pay via credit card by entering their credit card number.

Basic Reports

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You’ll also be able to run various accounting reports with QuickBooks Simple Start. These include the Profit and Loss Report, Balance Sheet, Statement of Cash Flows, Trial Balance, Accounts Receivable Aging Report, and Sales by Customer report. With Simple Start, you have access to a full-featured accounting software for only $30 a month, making it a great value for your business.

Capture Receipts

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You will also be able to capture receipts using your smartphone. There is an app that allows you to take pictures of your receipts on the go, and it will upload them into QuickBooks Online. You can then attach these digital receipts to your expenses. This ensures that, in the event of an audit, you will have a complete paper trail and all necessary receipts without needing to keep physical copies.

Mile Tracking

You also have the ability to track miles with QuickBooks. You can open the phone app and log your trips for work or projects, tracking the distance traveled. You can add notes to justify your mileage, which helps you make adjustments to your Profit and Loss report at the end of the year. This allows you to reflect the costs of using your personal vehicle for business purposes. If you have a business vehicle, you can expense the lease payments, gas, and other costs using the regular income and expense categorization. For personal vehicles, tracking mileage is crucial to justify the business use.

Cashflow Tool

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QuickBooks Online has a really cool Cashflow Tool feature that predicts your future cash flow. It analyzes patterns of expenditures from your bank and credit cards to give you an idea of your financial situation in the next two to four weeks. This helps you predict whether you will have enough money to make payroll or cover your expenses. Additionally, you can create invoices with Simple Start, as with all other editions of QuickBooks.

Sales Tax Tracking

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You can track sales tax in QuickBooks Online, allowing you to add and monitor sales tax. This feature provides all the information you need to file your sales tax in your state or multiple states if necessary.

Additionally, you can send estimates to customers for approval. You can create a pre-invoice, and your customer will receive the estimate via email. They can sign off or approve it, after which you can proceed with the invoicing process.

If you have 1099 subcontractors, you can manage them in QuickBooks Online. For a small fee, you can even electronically file their 1099 forms at the end of the year.

So, that’s Simple Start in a nutshell. There are many more features than the ones I just mentioned, but these are the core highlights worth noting.

Now, what happens if you move to Essentials, the next version? Essentials costs around $55 per month and includes additional features and functionalities.

QuickBooks Online: Essentials – $55/month

Eessentials has all the features of of simple start but it adds additional things the most important additional thing that it adds it has accounts payable that means that

Essentials includes all the features of Simple Start but adds several additional things. The most important addition is accounts payable.

Accounts Payable

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With Essentials, you can track accounts payable, meaning you can manage vendor bills and invoices that your suppliers send you. Unlike Simple Start, which allows you to track invoices to your customers but not vendor bills, Essentials enables you to keep track of bills you need to pay in the future.

In addition to tracking vendor bills, Essentials allows you to pay these bills online. QuickBooks Online has a system where you can input your business account number and make electronic payments to your vendors directly from QuickBooks Online. This feature simplifies managing your expenses and payments, making it very convenient.

Up to 3 Users

Another feature that QuickBooks Online Essentials adds is multi-user capability, allowing up to three users. This means if you have more than one person managing your books, you can add two additional users. Each user will have their own login, and you can maintain an audit trail to track who is doing what.

It’s important to note that this multi-user feature refers to internal users, not your external accountant or bookkeeper. All versions of QuickBooks, including Simple Start, Essentials, Plus, and Advanced, allow you to add your external accountant. However, QuickBooks Online Essentials specifically allows you to have three internal users instead of just one.

Time tracking

Another feature available in QuickBooks Online Essentials is time tracking. You can create timesheets for anyone in your organization and track their time. This is particularly useful if you plan to generate payroll, which can be done using QuickBooks with an add-on, a third-party payroll provider, or manually. The time tracking feature allows those three users to log in and record their time, making it easy to manage payroll.

However, if you have more than three employees, you can still track their time, but they won’t be able to log in themselves due to the three-user limit in QuickBooks Online Essentials.

Now, let’s move on to QuickBooks Online Plus, the most popular version, which costs around $85 or more per month. QuickBooks Online Plus adds the most important features.

QuickBooks Online: Plus – $85/month

Class & Location Tracking

QuickBooks Online Plus adds Class and Location Tracking, which are significant enhancements. These features provide additional dimensions to your reports, allowing you to track different aspects of your business more effectively.

For instance, if your business operates as multiple entities or locations under the same legal entity, you can use class and location tracking to monitor individual cost centers or profit centers. This enables you to generate profit and loss reports by class or location, giving you a detailed view of your financial performance.

Note: This capability is a major reason why many businesses upgrade to QuickBooks Online Plus from Essentials.

Project Tracking

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Another valuable feature you get with QuickBooks Online Plus is Project Tracking. This allows you to assign or allocate expenses to a particular customer or project. You can then generate profit and loss reports by customer or project, helping you determine whether you are making money on individual projects. This feature provides detailed insights into the profitability of each project, aiding in better financial management and decision-making.

Inventory & Purchase Orders

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Another feature you get with QuickBooks Online Plus is Inventory and Purchase Order tracking. You can now manage your inventory by creating purchase orders to bring in inventory and receiving those inventories through the same purchase orders.

When you sell inventory, you can reduce it through invoices or sales receipts. Every time you buy inventory, you add it to your purchases, and every time you sell it, you reduce your inventory accordingly. This inventory management component is essential for any business that needs to keep track of its stock.

Budgets tracking

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Another feature you get with QuickBooks Online Plus is Budget Tracking. You can enter a budget for your entire company and then track your actuals versus your budgeted amounts. This allows you to see whether you are on track with your projected sales and expenses. By comparing your actual performance to your budget, you can determine if you are executing your financial plan correctly and make adjustments as needed throughout the year.

Up to 5 users

Another valuable feature of QuickBooks Online Plus is the ability to have up to five users. Essentials is limited to three users, but QuickBooks Online Plus extends this to five internal users. This does not include your external accountant, who does not count toward the user limit.

Moreover, QuickBooks Online Plus offers unlimited time tracking users and unlimited report-only users. If you have more than five employees, they can still log in to enter their hours and assign those hours to jobs or projects, thanks to the job costing feature. Additionally, if you have a director or other team members who only need to view reports, they can do so without counting toward the five-user limit. This flexibility makes QuickBooks Online Plus a great option for larger teams with diverse needs.

Quickbooks Online: Advance – $200/month

Alright, let’s move on to the big one: QuickBooks Online Advanced, which costs around $200 per month. QuickBooks Online Advanced includes all the features of Plus, Essentials, and Simple Start, but it adds several key features.

Custom Field

The most important feature in QuickBooks Online Advanced is Custom Fields. Custom Fields allow you to create your own customized drop-down menus in any transaction, enabling you to track things specific to your business that QuickBooks might not have considered. This level of customization is especially beneficial for larger companies with more complex operations that require detailed tracking and reporting.

With Custom Fields, you can run customizable reports using those fields. In addition to the standard tracking of projects, customers, vendors, products, classes, and locations available in other editions, Custom Fields provide an additional layer of personalization.

Another significant feature is the Advanced Custom Reporting Tool. This tool lets you create reports using virtually any field in any dimension, and you can even create reports in a pivot table format. This enables you to summarize vast amounts of data into easy-to-read and actionable reports, providing deep insights into your organization.

QuickBooks Online Advanced, with its powerful customization and advanced reporting capabilities, allows you to make data-driven decisions and gain meaningful insights from your business operations.

>5 users

QuickBooks Online Advanced is designed for larger companies, allowing you to have more than five users. As of now, it supports up to 25 users. If your business needs between six and 25 internal users, QuickBooks Online Advanced is the right choice for you. In the future, they might even increase the number of users.

Additionally, QuickBooks Online Advanced offers Custom Permissions and Roles, enabling you to assign specific roles and permissions to each user. This feature ensures that each user has access to the information and functions they need without compromising the security and integrity of your financial data. As always, your external accountant does not count toward the user limit.

Customize Role

With QuickBooks Online Advanced, you have the ability to assign customized roles. This means you can specify which areas of QuickBooks each user can access. For example, you can have a user who only accesses payroll, another who only accesses invoices, and others who only access bills, banking, or accounts payable. This level of control ensures that users only see and interact with the parts of QuickBooks relevant to their roles.

In addition to the 25 users, custom roles, custom fields, and custom reports, there are a few other important distinctions:

Classes and Locations: QuickBooks Online Plus is limited to a maximum of 40 classes or locations in total. If you need to track multiple classes or locations and generate profit and loss reports by these categories, this limit may be restrictive. QuickBooks Online Advanced, however, offers unlimited classes and locations, providing greater flexibility for complex businesses.

Chart of Accounts: QuickBooks Online Plus is also limited to 250 accounts in your chart of accounts. While this is sufficient for most small to medium-sized businesses, larger companies with more complex accounting needs may require more. QuickBooks Online Advanced allows for unlimited accounts in the chart of accounts, making it suitable for businesses with extensive and detailed accounting requirements.

Spreadsheet Sync

In addition to the features mentioned, QuickBooks Online Advanced also includes a special feature called Spreadsheet Sync. This feature is an Excel add-on that allows you to pull data directly from QuickBooks into a custom Excel spreadsheet. Instead of logging into QuickBooks and manually exporting reports to Excel, Spreadsheet Sync lets you seamlessly import the data.

Another advantage of Spreadsheet Sync is its ability to push data from Excel into QuickBooks. If you have data in Excel that you need to import into QuickBooks, you can do so using this feature. This functionality streamlines data management and integration between QuickBooks and Excel, making it a valuable tool for businesses that rely on detailed spreadsheets for their accounting and reporting needs.

Batch Enter Transactions

Another significant feature, similar to Spreadsheet Sync, is called Batch Enter Transactions. With this feature, you can create multiple invoices or bills all at once. If you have transactions that are common and repetitive, Batch Enter Transactions allows you to input them in a spreadsheet-like format directly within QuickBooks Online. This capability helps you enter transactions much faster, increasing efficiency.

Additionally, QuickBooks Online Advanced offers Premium Support and Video Tutorials. This means you have access to dedicated support and a library of tutorials to help you make the most of all the advanced features and functionalities available in QuickBooks Online Advanced.

Top tier support

Because you’re using the highest version of QuickBooks, you also receive top-tier support. With QuickBooks Online Advanced, you get premium-level support, which includes a comprehensive set of instructional videos. Normally, these tutorial videos could cost you $500-$600 if purchased separately from a tutorial provider. However, QuickBooks Online Advanced offers access to this entire library of content at no additional cost.

Many clients start with QuickBooks Online Advanced for a month or two to take advantage of the extensive training and extra support. Once they’ve utilized the training and support, they may realize they don’t need the advanced features and choose to downgrade. This is a key benefit: you can always upgrade from Simple Start to Essentials, to Plus, to Advanced, and you can also downgrade from Advanced if needed.

The only caveat when downgrading is that any data in the additional fields, such as custom fields, won’t be accessible unless you upgrade back to Advanced. However, your data is never lost; it’s just that access to certain features is limited based on the version you are using. This flexibility allows you to choose the level of QuickBooks that best fits your current needs while ensuring your data remains intact.

Expense Management

With QuickBooks Online Advanced, you also get an Expense Management feature. This allows your employees to upload receipts, either for reimbursement or for categorizing expenditures made with a corporate credit card. This feature simplifies tracking and managing business expenses.

Additionally, you have the ability to Automate Workflows. This means you can set up QuickBooks to automatically remind customers or users about open transactions, such as estimates, purchase orders, or invoices. You can create automations that trigger emails and notifications for your users, customers, or vendors, prompting them to take action on these open transactions. This automation helps ensure timely follow-ups and efficient transaction management.

Backup and Restore restore

Lastly, with QuickBooks Online Advanced, you’ll have access to a Backup and Restore feature. This built-in functionality allows you to create backup points. If you or any other users make mistakes, you can easily revert to a previous backup point, ensuring your data remains intact and errors can be quickly corrected.

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