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 capabilities 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 are important to avoid misunderstandings and can be created and then seamlessly imported to an invoice for billing. This feature is only available in PLUS.

Online Banking – With online banking, payments and receipts do not have to be entered into your QB register. Instead of entering your transactions, you only have to review them as they appear after the download in the QuickBooks check register. When you download QuickBooks compares it then compares the bank’s transactions to the transactions in QuickBooks and identifies discrepancies. It assists you in managing your cash flow, because you always know which checks have cleared the bank, which means you know how much money you have in real time. This feature is only available in PLUS.

Exporting – With PLUS you can export transactions and balances to a Microsoft Excel spreadsheet. This feature is critical for further analysis of your business.In other words, you can derive information otherwise not easily available to you. It’s an important feature, that should not be be overlooked, since it adds greater reporting and after the fact analysis capabilities.

Class tracking – This is similar to business tracking. Classes allow you to categorize transactions in more detail. By using classes, you are able to categorize each detail line on a transaction. For example, you can write one check to the office supply vendor for items bought for two different online business units while being able to track the business unit for those purchases. For example, you have a website development firm and a SEO business, and want to track revenue and expense for each business, you will be able to produce a Profit & Loss by Class report that will inform you if your website development business is more or less profitable than the SEO business. This feature is only offered in PLUS.

Business tracking – You can use PLUS to categorize data from different locations, offices, regions, or outlets of your company. You can assign each transaction to each business. By assigning a business to each transaction as you enter it, you can later see businesses on reports. Assigning businesses also lets you efficiently manage groups of transactions. A great use of this would be for different rental properties.

Time tracking – This feature is only in PLUS and allows you to enter your time into a timesheet for fee for service business i.e. consultants, freelancers, architects,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.This is a very rudimentary but provides a bench mark that every company should use.

1099 Reporting – The regulations of the Internal Revenue Service require that a taxpayer issue a 1099-MISC form to its workers for nonemployee compensation providing the payer is a trade or business and the payments are to a noncorporate entity were $600 or more for services rendered. This feature is only offered in PLUS.

Number of Users -BASIC provides access for yourself and your accountant( 2 users). Whereas PLUS provides access for 3 users PLUS your accountant(4 users) and can be expanded up to 25 users for an additional cost.

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.

Pricing – BASIC costs $9.99 per month as compared to PLUS which retails for $34.95 per month . However, if you purchase PLUS through a Certified QuickBooks ProAdvisor you can purchase it for $21, which reflects a discount 40% discount, which is currently in effect at this time. Discounts and prices may vary in the future.

Conclusion – For the most part, BASIC works well for smaller companies, whereas PLUS is for small to midsized companies. Before you make your decision, you are able to test drive the software for 30 days for both BASIC and PLUS and, then decide which is best suited for your business. They are other drawbacks, when comparing BASIC and PLUS to Desktop QuickBooks i.e. Pro, Premier, etc.The most significant drawback is that the Online versions doe not provide inventory functionality, unless you purchase an inventory add on. More importantly, its incumbent upon you to ask you CPA or accountant for help in making this important decision.