QuickBooks Online has three levels of online accounting solutions packages: Free, Basic, and Plus. After making your decision to use QuickBooks Online, the next step is to decide between QuickBooks Online Basic and QuickBooks Online Plus. This article will address the differences between the two alternatives. Any accounting solution should be tailored to the kind of business you operate. There is also a free version of QuickBooks, however because of its limited functionality it was not considered for this analysis. For purposes of clarity I will abbreviate QuickBooks Online Basic as “BASIC” and QuickBooks Online Plus as “PLUS”. Each significant difference between the two alternatives is discussed below:

The following discusses the capabilities that work only with Plus:

Importing -Plus allows you to import your Simple Start Edition, QuickBooks Online Basic, QuickBooks Pro or Premier Edition file(s) into PLUS only. Unfortunately this import feature does not work with a Mac.

Estimates – Estimates can be created and then seamlessly imported to an invoice for billing. By using estimates understandings can be mitigated.

Online Banking – With online banking, transactions downloaded into QuickBooks directly from your financial institution only in PLUS. You only have to review them instead of entering them from scratch. When you download an electronic statement, QuickBooks compares it to the transactions already in QuickBooks and identifies discrepancies. It helps you manage your cash flow, because you always know which checks have cleared your banking account, you also know how much money you have available.

Exporting – PLUS provides you with the ability to export transactions and balances to a Microsoft Excel spreadsheet. I can’t begin to impress upon you how importance of this feature for further analysis of your business. It’s a very important feature, since it adds greater reporting capabilities. It gives you flexibility is to analyze 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 – With PLUS you can categorize data from different locations, offices, regions, or outlets of your company. You are able to assign each transaction to a business. By assigning a business to each transaction as you enter it, you can later see businesses on reports with great detail and clarity. Assigning businesses also lets you efficiently manage groups of transactions.

Time tracking – This feature allows you to enter your time into a timesheet when you charge by the hour i.e. Website developers,consultants, SEO’s, freelancers, sole proprietors, etc.

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 the budget feature to estimate income and expenses for future years. PLUS budgets use a format very similar to a spreadsheet, with a horizontal row for each of your income and expense accounts, and vertical columns for each month or quarter. Although this budget format is very simple, it does provide a measurement tool to monitor your business’s actual vs budget.

1099 Reporting – The Internal Revenue Service requires that a taxpayer issue a 1099-MISC form to workers for nonemployee compensation providing the payer is a trade or business and the payments are to a noncorporate entity were equal to $600 or more for services rendered.

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.

QuickBooks Support – BASIC includes email support which is provided by Intuit whereas PLUS includes callback and chat support as well as email support also provided by Intuit. Obviously, PLUS support is better, but with BASIC you can resolve your questions by email.

Price – BASIC costs $9.99 a month as compared to PLUS which according to the Intuit website is $34.95 per month. However, if you purchase PLUS by using a Certified QuickBooks ProAdvisor you can purchase it 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. There are no annual contracts.

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.