QuickBooks Online, owned by Intuit, has been the best small business accounting application for many years. It's a PCMag Editors' Choice award winner again this year thanks to its depth of features, customizability, and understandable user interface. A well-integrated payroll app and hundreds of add-ons extend its usefulness to an even broader audience. Feature enhancements over the last year help users save time and get the assistance they need. If your small business is extra small, however, we recommend FreshBooks, which is the best accounting app for freelancers and independent contractors. For everyone else, QuickBooks Online remains our top choice.
How Much Does QuickBooks Online Cost?
QuickBooks Online comes in four versions, all of which look and work similarly and offer a 30-day free trial. Simple Start costs $30 per month and is designed for microbusinesses. The $60-per-month Essentials plan adds bill management, support for three users, and time tracking. For $90 per month, the Plus plan (which I tested for this review) includes inventory and project profitability tracking and support for five users. The Advanced version costs $200 per month, supports 25 users, and adds employee expenses, batch invoices and expenses, custom access controls, and other features. QuickBooks Online has its own tightly integrated payroll application, QuickBooks Payroll.
QuickBooks Online costs more than just about any competing applications for small business accounting, though it depends on how many users you have. FreshBooks is more affordable in some cases. Its Premium version ($55 per month) offers much of the same functionality as QuickBooks Online Plus and some that are unique to it. FreshBooks does, however, charge $11 per month for each additional team member, whereas QuickBooks Online Plus includes five for free.
Zoho Books costs $60 per month for Premium. Xero charges $15–$78 per month. And Patriot Software Accounting Premium costs $30 per month.
QuickBooks Online’s high price becomes more palatable when you consider the additional customizability and support it has. For example, news users can now get help with setup by phone free of charge. That’s huge. Online help also seems to be improved over what we saw in previous years. QuickBooks Online has enhanced its automated transaction categorization tool, which can be especially helpful to new users who have dozens or hundreds of transactions to categorize.
Getting Started With QuickBooks Online
Once you’ve created an account, you go through a brief setup to tell QuickBooks Online some basic information about your business. The app works in the background to change some of the core settings to accommodate your specific type of business. You connect your bank accounts, and after that, the service quizzes you about specific transactions, asking whether a designated category would be appropriate for a particular expense. If it is, QuickBooks learns to assign similar transactions the same way going forward.
QuickBooks Online has a two-page dashboard. One page shows a series of graphical flow charts that illustrate a typical workflow for a small business. You can use it for navigation. The other page shows the more typical dashboard tools and data, like graphs for income and expense status, profitability, sales totals, and account balances.
(Credit: Intuit)The user interface is attractive—though I wish it wouldn’t sprawl so much—and navigation is understandable. It's not as state-of-the-art and, well, fresh as FreshBooks.
QuickBooks Online's Sales Tools
QuickBooks Online’s customer records are thorough and can be imported in multiple formats, including CSV, Excel, Google Sheets, and QuickBooks Desktop. Each customer's home page has contact information as well as more unusual fields, like the customer's preferred language and Price Rules. This page also has links to that customer’s transactions, statements, projects, and late fees, as well as to new transaction forms like invoices. Only Zoho Books rivals this flexibility.
(Credit: Intuit)The site offers a full complement of sales transaction forms, from invoices and estimates to sales receipts and credit memos. Invoice forms are more customizable in both design and content than what you get from other small business accounting software, and you can include custom fields. You can also calculate deposits, shipping charges, and discounts. A progress bar appears in the right vertical pane, showing the history of the transaction.
Completed invoices appear in a list on the invoice page, which offers options for them, like Edit, Receive Payment, Print packing slip, and Send reminder. You can also quickly see how much money is tied up in overdue and not-yet-due invoices, as well as how much you need to deposit. Other sales forms work similarly.
(Credit: Intuit)Managing Bills and Expenses With QuickBooks Online
QuickBooks Online, like its competitors, can accept payments from customers via credit or debit card or bank payment. It also simplifies and accelerates the process of scheduling and paying your own bills through QuickBooks Bill Pay. Both services require extra fees. You also have the option to upload bills from your computer or enter them manually, marking them paid if you still pay them offline.
There are five ways to get expenses into QuickBooks Online. You can upload them from your computer, upload them from Google Drive, forward them from email, snap photos of receipts, and enter them manually on a form. You can make them billable to customers or projects, add markup, and make them recurring.
(Credit: Intuit/PCMag)QuickBooks Online also lets you create and send purchase orders to vendors when you're ready to buy more products. The purchase order has fields for you to enter specific items and the quantity. When a purchase order is approved, you can then add an expense or bill transaction in QuickBooks to keep all the transactions connected.
Does QuickBooks Online Track Inventory?
You can use QuickBooks Online to track inventory. Close competitors Sage 50 and Xero give you excellent inventory management tools, too (especially Sage 50). FreshBooks does not.
QuickBooks Online’s item records are detailed enough to satisfy a broad swath of small businesses. You can, for example, track both sales and purchase information and accounts, quantity on hand, quantity on purchase orders, and reorder inventory. The site warns you if you try to sell something you don’t have in stock, and its inventory reports help you avoid running low or having too much money tied up in products that aren’t selling well. QuickBooks Online also tracks non-inventory parts and allows you to build multi-item assemblies.
(Credit: Intuit)Using QuickBooks Online as a Service-Based Business
Service records are slightly less detailed than product-based ones, but they’re still thorough enough. You can enter sales and cost prices and other descriptive information. Since it’s likely that at least some of your services are based on hours worked, QuickBooks Online Plus provides strong internal time-tracking tools but also includes an integrated subscription to QuickBooks Time, which is the overall best app available for managing individual time entries and timesheets.
Does QuickBooks Online Offer Project Tracking?
QuickBooks Online’s project tracking capabilities are roughly comparable to FreshBooks Premium’s. They’re both excellent. You simply assign transactions (invoices, payments, expenses, estimates, time, purchase orders, and bills) to specific projects. QuickBooks Online creates a page for each project, showing you at a glance its current income and expenses by category. Besides this overview, you can see lists of related transactions and time activities, as well as project reports. Your current profit always appears on the page.
The Best Reports in the Business
No other accounting service does reports as well as QuickBooks Online in terms of design, customizability, and content. Most are standard reports that correspond to the site's core functions, such as sales and customers, expenses and vendors, accounts receivable and payable, sales tax, and accountant reports (including standard financial reports like Statement of Cash Flows and Balance Sheet). You can save modified reports and export them as CSV, PDF, and Excel.
Outstanding Mobile Apps
The Android and iOS apps for QuickBooks Online are outstanding—by far the best of any small business accounting software I've reviewed. They don't replicate all the browser-based version's capabilities, but they provide most of the tools you need to get a lot of your accounting work done remotely.
(Credit: Intuit/PCMag)Charts and lists keep you updated quickly on your financial status. The dashboard and transaction management are great, and you can track mileage automatically as you drive. Transaction forms like invoices and expenses are identical to or nearly as detailed as they are on the desktop. The mobile apps are attractive and easy to navigate, giving you a better user experience than even the browser-based version.
Is QuickBooks Online Safe to Use?
Intuit’s fraud prevention technology constantly scans the company’s systems and blocks individuals who are up to no good. Employees proactively search for scams and frauds that might impact QuickBooks Online customers. Multi-factor authentication is required, and the company safeguards your data using AES-256 (Advanced Encryption Standard with 256-bit keys), which ensures the highest level of cryptographic security. Intuit also participates in established partnerships with multiple security organizations and alliances to help make sure that your data is protected by the best methods available.
What Is Two-Factor Authentication?Should You Subscribe to QuickBooks Online?
At $90 per month for QuickBooks Online Plus, you need to be committed to using it conscientiously and comprehensively. If you are, you’ll find that it’s a tremendous small business accounting application whose features and design can simplify and accelerate your financial management tasks while giving you the feedback you need to move your company forward. QuickBooks Online has been an Editors' Choice award winner for small business accounting apps for years, and it remains a well-deserved honor.
If you’re a service-based business or your inventory tracking needs are modest, FreshBooks will likely be a better fit and is also an Editors' Choice winner. The service is great for teams, too. It lacks some of QuickBooks Online’s depth and customizability, but it has its own unique features and a user experience that takes some of the dread out of accounting.
