In a recent Expertise Accelerated publication on the QuickBooks Online Accountant software, our experts presented a thorough breakdown of the various subscription tiers available for the software to help entrepreneurs and accountants make the best choice for their needs. However, in that article, we deliberately left the subject of QuickBooks Desktop out for brevity and simplicity.
Now that we have adequately addressed QuickBooks Online and its subscription model, it’s time to make the ultimate comparison between the two to give entrepreneurs yet another choice regarding their accounting software needs.
In this article, we will break down both QuickBooks Online and QuickBooks Desktop in terms of their functionality, practical utility, and cost-benefit ratio and present our recommendations for various use cases to help entrepreneurs choose their businesses.
Table of Contents
QuickBooks Online vs. Desktop: Overview
QuickBooks Online and QuickBooks Desktop are both accounting software produced by Intuit QuickBooks, and they stand among the most popular and highly regarded products in their industry, with surveys by BusinessDIT reporting a staggering 80% of respondents as QuickBooks users. As such, while there are major differences between QuickBooks Online’s cloud-based accounting solutions and QuickBooks Desktop’s more robust, desktop-based accounting utility, they still stand as some of the best accounting technology money can buy, and neither is objectively the better choice. What makes the difference is the user’s nature and accounting requirements, so entrepreneurs should apply these comparisons in the context of their business when weighing the options.
QuickBooks Online is entirely cloud-based accounting software, which means that all your data is encrypted and stored on servers online, and your books of accounts are accessible through the Internet.
QuickBooks Desktop is the traditional program variant of QuickBooks products, and it can be bought for a yearly fee, installed on your desktop computer, and used regardless of wireless connectivity.
QuickBooks Online vs. Quick Books Desktop: Functionality Comparison
Remote Access and Cloud Storage
QuickBooks Online holds an edge over the desktop variant in this regard. Cloud storage is an implicit part of QuickBooks Online and offers mobile access so that you can work while on the go. QuickBooks Desktop is a more office-oriented software, and while there is a functional purpose in having accounting software on company premises only, the nature of accounting is such today that the entire function can be handled remotely, with GoRemotely reporting that 94% of accountants today prefer remote, cloud accounting over an in-house role.
This makes it so that were entrepreneurs to opt for the desktop variant over QuickBooks Online, they would need to have sufficient reason to justify the choice, seeing as it comes at the cost of office space and an in-house accounting professional. QuickBooks Desktop does have a cloud storage option; however, remote access is more limited in functionality. Frankly speaking, QuickBooks Online feels far superior to QuickBooks Desktop in this respect, and the $44 price tag for half-baked cloud and remote functionality certainly doesn’t help QuickBooks Desktop’s case.
This is possibly the biggest point in favor of the functionality of QuickBooks Desktop versus QuickBooks Online. QuickBooks Online offers no industry-specific functionality and is designed for general business use. But QuickBooks Desktop has a lot to offer for businesses looking for extra industry-oriented functionality.
While associated with a heftier price tag, entrepreneurs may find that the Enterprise edition of the software, which includes industry-specific tools for retail, construction, contracting, and wholesale, is the right choice for their needs. The Premium Plus feature of the software also comes with industry-specific tools and reports.
However, in assessing the practical benefit of paying a substantial amount for these features, we cannot help but discourage small business owners from opting for the desktop variant. Most businesses can function just fine leveraging QuickBooks Online, with only medium and large-sized businesses gaining additional value for the cost. The average local business owner does not need QuickBooks Desktop in this regard. Frankly, the industry-specific tools are just more streamlined methods of accounting that have a negligible impact on a non-corporation.
Third-party App Integration
Another important point of comparison is the compatibility of third-party applications with both software. On top of QuickBooks Online boasting 650 different app integrations, compared to the 200 available for the Desktop variant, there is a notable exception when it comes to QuickBooks Desktop. This is for third-party AP automation integrations.
QuickBooks Desktop does not allow third-party AP automation integration, which can be quite bothersome. As we know from a report by Payments, 94% of businesses have agreed that going forward, AP automation is a key component to fueling business growth. With AP automation being locked out for QuickBooks Desktop, this poses a great problem for entrepreneurs looking to automate their AP as part of their growth efforts.
QuickBooks Online vs QuickBooks Desktop: Practical Utility
The stark difference in pricing sets QuickBooks Online and QuickBooks Desktop apart. QuickBooks Desktop starts from a not-so-modest $549.99 annual fee, while QuickBooks Online slides in at a starting price of $315 annually.
This dominant factor sways many entrepreneurs to opt for QuickBooks Online. Sure, there are risks associated with cloud storage and remote accounting, and the software may be missing some highly sophisticated tools. Still, for a good chunk of the US business landscape, these features are not worth the almost double price tag, especially when the Desktop variant also seems to be lacking some features that should be present, such as Ap automation integration and better app integration overall.
Security is an interesting conversation to be had in the context of utility. Undoubtedly, QuickBooks Desktop is a far more secure accounting program thanks to its independence from the cloud. It allows entrepreneurs to mitigate a large portion of risk to their finance function from cyber security threats and enforce a highly secure cyber-risk management strategy.
However, while keeping all your accounting data stored locally is a more secure option, it can also prove to be a massive hindrance when data recovery is a part of the equation. Imagine if your accounting computer’s hard drive gets corrupted, and your data is lost. Or worse, a natural disaster claims your office. Any external factors can lead to data loss, and data recovery is substantially harder in this case. While with QuickBooks Online, all you sacrifice for cloud storage and highly secure data encryption is the ability to work offline and boost security at the expense of reliable data recovery.
Comparing the functionality and utility of QuickBooks Online against QuickBooks Desktop, EA’s verdict favors QuickBooks Online. Each software allows fully functional basic accounting functionality. Still, the former includes vaunted features such as cloud storage, remote access, and better app integration, all at a much lower price point and sufficient for the needs of a good portion of entrepreneurs out there.
QuickBooks Online is also highly useful when dealing with outsourced accounting services, which are all the rage in the business landscape due to their cost-effective accounting solutions.
That’s not to say that QuickBooks Desktop is not good software, but compared to its online counterpart, it does feel like not much was added to justify the price tag. Industry-specific tools and higher user limits are nice but practically useless for a sizable portion of businesses.