Review of QuickBooks Online - 2011


Intuit, Inc. - QuickBooks Online


From the June 2011 Review of SaaS Accounting Systems for Small Business

Having just passed 250,000 users, QuickBooks Online is likely the most widely known web-based accounting system for small businesses, offering simplified management capabilities, payroll, invoicing, electronic payment acceptance, reporting and budgeting tools, with the ability to access the system anywhere and anytime. QuickBooks Online is available in three versions and is completely different from the installed version, providing different interfaces and capabilities that take advantage of the web-based nature of the program.

 Best Fit:
Small businesses with only a few employees, primarily service-based or those with simple product/inventory needs.

Basic System Functions:
The three versions of QuickBooks Online (Simple Start, Essentials and Online Plus) have varying features and options, but they share the same general browser interface and menu structures. The more advanced Online Plus is reviewed here. The program works with both Mac and PC computers and supports all major Internet browsers. Navigation is simple and logical, opening into a home screen with tabs for accessing primary functions such as company, clients, vendors, employees, banking and reporting. This initial page also displays a welcome panel that offers assistance with a “Getting Started Guide,” Free phone support is available to guide new users through the setup process. While the home page offers additional links to common tasks and displays recent transactions, it is not really a dashboard, since it doesn’t offer quick views of key business indicators or items requiring attention. A customizable dashboard report called the Company Snapshot is available from the reports menu.

♦ Friendly user interface & intuitive navigation
♦ Integrated live bank account data
♦ Audit trail
♦ Built-in payroll option
♦ No contracts
♦ Includes accountant log-in
♦ Runs on Mac or PC with any browser

Potential Limitations:
♦ Limited inventory functions
♦ Only basic customer & vendor data records
♦ Limited support for projects
♦ No multi-currency/language
♦ Minimal integration
♦ No point-of-sale


Navigation within the program is generally very simple, with each of the primary tabbed activity centers also offering submenus for related tasks. For example, the company tab offers access to the chart of accounts, recurring transactions, preferences, budgets and administrative program functions, while the client center includes a master client list, links to invoicing functions, payment receipts, charges, credit card acceptance utilities and other features. Menus can be customized somewhat to user preference.

The program doesn’t require knowledge of accounting or bookkeeping jargon, using terminology based on the industry selected during setup. The program offers template charts of accounts based on common business types. The feature set, however, is generally the same regardless of the type of business being managed with the program, providing primarily service-oriented tools, such as clock timers and the ability to move time into invoices. Options for companies who have inventory and manage projects are limited, and job costing is not supported. As a fully web-based system, it is usable on tablets and smartphones, with program apps for the iPhone, BlackBerry and Android devices (although some features are not available on the mobile versions).

Core Accounting Capabilities:
QuickBooks Online offers different features than its desktop (on-premises) cousin, and may not be quite as comprehensive. Some features included in QuickBooks Online are not included in the on-premises application, which may make the service more attractive to some users. These features include remote access, mobile application access, free technical support, business location tracking, and options for automatic and delayed billing. The system includes a full, traditional general ledger, along with payables and receivables management. Transaction items can be quickly drilled down to from both invoices and reports, and users can also track bills and payments for automated rebilling to customers. Banking features include new streamlined reconciliation capabilities that are enabled by linking the system with the business’ banking accounts.

The system allows application of sales tax to products or taxable services. Tracking of tax exempt ID number is also offered on customer data sheets. The program does not offer automated sales tax table integration so tax rates must be managed manually.

Businesses can add payroll to all three versions of QuickBooks Online starting at an additional $39 per month, which includes withholding tables, unlimited printing and direct deposit of checks, as well as print or online compliance filing, electronic deposit of federal and state employment taxes, and W-2 printing. The system does not offer direct integration with other payroll programs. QuickBooks Online supports up to 25 concurrent business users (it can be used to manage and pay more employees than this), plus an accountant login, all of whom can use the program from their own office or mobile locations. The program can support businesses with multiple locations, but offers only basic inventory capabilities that are not designed for multiple warehouse tracking or other geographic capabilities.

In keeping with its limited use of accounting terminology, the program’s audit trail is called the Activity Log, and is a full-time function that provides tracking of user name, time, client, activity and other information for transaction or data changes. While it cannot be turned off, it can be customized to show less or more information, but only by top-level administrative users. The U.S. versions do not support multiple currencies. The program is designed for the management of a single business, and does not offer functions for consolidating multiple companies.

Day-To-Day Operations:
Everyday use of the program is aided by an intuitive navigation structure and menus, along with occasional “mini-interview” guides for tasks such as setting up bank and payroll features. Users can easily create and email invoices, including scheduling delayed billing. The program does not offer direct integration with shipping companies, but does offer basic built-in functions for order tracking. Fields tracked include destination address, shipping date, carrier, and shipment tracking number.

Although a web-based system, QuickBooks Online lacks basic e-commerce capabilities such as tie-ins to e-shopping carts. Users must perform a workaround of creating duplicate product/service items in order to accommodate multiple sales tax rates. Likewise, there is no point-of-sale hardware integration. The system’s customer and vendor management functions are easy to use and understand, with quick access to master lists that offer search and filter capabilities. The menus provide links to common tasks such as invoicing, receiving payments, entering and paying bills, creating purchase orders, and generating receipts. Customer invoices can be printed or emailed from within the program. There is no direct integration with third-party CRM programs, and contacts such as customers and vendors will only store details information for one person.

The inventory functionality in QuickBooks Online is essentially just a basic listing of products. It is generally limited to single component items, with the system allowing name, basic description and one price, although it does offer the ability to create sub-items. It does not support inventory valuation cost methods or tracking for inventory items, nor are there quantity control management features, such as “on-hand” or automatic reordering. No features are available for manufacturing of products.

QuickBooks Online offers a credit card acceptance function for cards accepted via “key entry” (not swiped). After a free two-month trial, the cost of this service is $19.95 per month, plus a $0.27 per authorization fee and a 2.44% transaction fee. A new feature currently in beta will allow direct ACH payment from customer bank accounts to the business account at a flat cost of $0.50 each. The program does not integrate with other merchant service accounts or online payment systems.

Management Features:
Although not identified as a dashboard, the Company Snapshot Report is a customizable dashboard of sorts, displaying charts and graphs of items such as income, expenses, period comparisons, receivables and payables, with the ability to click through to supporting reports. As previously noted, the home screen and customer and vendor centers don’t provide key data overviews or action items, but they do provide links to common functions, including recent transactions.

The reporting system houses a collection of more than 65 customizable options, presented in plain English, for standard items such as income statement, balance sheets, cash flow statements, a trial balance, account listings, transaction reports, AR reports, collections, income by client, as well as numerous options for sales, vendors and banking. Users can save reports into sets, and the program offers accountant-focused output, including trial balance, adjusted trial balance, GL, transaction detail, the journal, adjusting entries and other options.

User-level security features enable role-based restrictions on access to clients, sales, vendors and purchases, as well limitations on system administrator functions.

QuickBooks Online can import data from most recent versions of the traditional QuickBooks system, as well as via a two-step export-import process from other accounting programs. The program can also import customer data from Excel. Reports can be easily printed, e-mailed or exported to a spreadsheet. The service recently began to offer integration with, Expensify and AuditMyBooks. QuickBooks Online does not have client portals or the ability to store scanned documents (such as receipts, bills, warranties, etc). However, the new beta ACH payment system offers online access to payment histories. An accountant login is included with all versions, with the business’ approval, and therefore always works with live data.

QuickBooks Online provides a very easy-to-use system and offers topic-related Help from the How Do I? button located on every page. A traditional Help index is also available, as well as a link to online support, which provides additional topical guidance, how-tos, and other task-based assistance. It also provides links to FAQs, user guides, the QuickBooks Online blog and an online user support community. Support is U.S.-based, and, unlike the installed version, support for QuickBooks Online is completely free and available by phone and email Monday through Saturday.

Executive Summary & Pricing
QuickBooks Online is a good fit for very small businesses that are either service-based or offer simple goods. It has limited inventory and integration options, and doesn’t have e-commerce capabilities, but for most small businesses, the program provides an easy-to-use business management system, with payroll, integrated e-banking and good accountant-focused reporting. All of this in a web-based format that gets rid of IT headaches and allows anytime/anywhere access, including the availability of apps for popular mobile gadgets. Pricing for Online Plus is $39.95 per month for up to five users; Essentials is $24.95 per month for up to three users; Simple Start is $12.95 per month for one user. The payroll option is available for Essentials and Online Plus.

2011 Overall Rating: