In this video I'll compare all of the different versions of QuickBooks Online
so that we can find out what's right for you.
[Music]
Hey there I'm James
and welcome back to Accounting Stuff. A little while ago
I put up a video where we walked through
how to use QuickBooks Online. We discussed a whole bunch
of features that will help keep your books in tip-top shape.
However we skipped out a vital part of the process
because QuickBooks Online comes in a few different
shapes and sizes. There used to be three
different versions that you could choose from
but recently Intuit refreshed their online plans
so now we have four. Simple start
Essentials Plus and Advanced
and that's excluding QuickBooks Self Employed.
So which one's right for your small business?
I don't know it's confusing so I decided to put together
this little video to compare all the different versions
against one another and then at the end
I'll recommend which one's right for you.
So don't miss out on that. To be clear we're going
to be focusing on the US Edition although most of the points
will probably make sense for other regions as well.
You can click on the link in the description to see
a breakdown of all the different plans that we'll be talking about
and I want to be fully transparent this is an affiliate link
so that means that if you end up going ahead with the free trial
or the discounted version after clicking on it
then I'll make a small commission. I want to keep creating
accounting videos like this one so this is one of the ways that
you can support me doing that. Anyway our focus today
will be on maximising your value for money.
After all there's no point in paying for features
that you aren’t going to use. We'll begin by taking a look
at QuickBooks Self-Employed. At 10 dollars per month
or 17 if you chuck in TurboTax. This is the cheapest
cloud accounting product that Intuit offers
and I have a love-hate relationship with it.
Here's why If you're a contractor
a freelancer or a sole proprietor of a small business
then QuickBooks Self Employed is a super convenient tool
that you can use to track your income and expenses.
You can connect it up to your bank accounts to import
all of your transactions automatically and the software makes it really easy to
classify each one as business or personal
or split between the two. This is useful if you bundle
all of your work and personal transactions through a shared bank account
but more on that soon… This process will allow you to
track your business's performance through your income statement
so you know how much profit you're making. Supporting these transactions with
invoices and receipts can be a real pain to do manually in spreadsheets
but with QuickBooks Self Employed you can simply drag and drop
the support against each line item and you also get access to a free app
which you can use to snap, allocate and store receipts on-the-go.
Having an organised filing system like this is a massive help when
preparing your taxes because you can easily provide backup
for all of your transactions. QuickBooks Self-Employed also gives
you quarterly tax estimates so you can prepare for what's coming.
Oh yeah and on top of all that you can raise professional-looking invoices
showing your business's logo and accept payments
and the app allows you to accurately record your business's mileage using
your phone's GPS. Very handy if you're an uber driver.
Sounds great doesn't it? Well… yes
if you've been using spreadsheets up till this point or you've been
putting off your bookkeeping entirely then QuickBooks Self-Employed
is a total game changer. But… and this is a big but
it doesn't scale. QuickBooks Self Employed is a
totally separate product from QuickBooks Online
so you can't seamlessly upgrade it if you end up needing more features.
This will become a big problem if you plan on expanding and growing
your business in the future because this software won't grow with you
and whilst I like a lot about QuickBooks Self-Employed
it's also a very primitive product. Double entry bookkeeping is one
of the most important inventions of the past 500 years and basically
all major businesses use it to record their transactions
and report them in financial statements. Well QuickBooks Self-Employed doesn't do that.
If you're new to double entry accounting and you'd like to learn more about it
then don't forget to subscribe to this channel.
I have a whole accounting basics playlist up here that will help teach you it works.
QuickBooks Self Employed also doesn't have any third-party app integration
and no bank reconciliation feature which me is a big no-no.
QuickBooks Self-Employed definitely has its place and for some people
it might be perfect but be warned
it's mainly aimed at freelancers and contractors
so if you run a small business this probably isn't for you.
You will need to look into QuickBooks Online instead.
Which brings me on to Simple Start. At $20 per month
QuickBooks Simple Start is the cheapest version that you can
get your hands on. It gives one user and an accountant
the ability to track your income and expenses
which you can still categorise by type in order to maximise your tax deductions.
Simple Start also allows you to download all of your banking
transactions into one place and you now have access to the
bank rec feature which is one of my personal favourite
things about QuickBooks Online. QuickBooks Online integrates
with hundreds of third-party apps so you can now work with TSheets,
Expensify and Square in order to save yourself time.
It's a bit harder to allocate transactions between
business or personal in QuickBooks Online but I highly
recommend avoiding that situation entirely by keeping separate bank accounts for each.
Even if you haven't incorporated set up a new bank account and
keep these transactions totally separated it'll make your life so much easier.
Plus further down the road if you do decide to form a company
you'll have to do this anyway. In simple start you also
get access to the QuickBooks Online mobile app which lets you snap and
organise your receipts just like you could in QuickBooks self-employed.
You can also raise invoices and accept payments which you can track
in your sales tab. Unfortunately you won't be able to
track your mileage anymore like you could in QuickBooks self-employed
but there are some third-party apps that can help you work around this.
The main benefit of Simple Start is that it opens you up to the world
of double-entry bookkeeping. Why is that helpful?
Well for starters it allows you to track all of
your assets and liabilities and equity in your balance sheet.
The balance sheet is one of the basic financial reports that you
can run in simple start. If you're interested to see what
other reports you can run here is a complete list
I'll drop a link to it down in the description. The other benefit of simple start
is that it's totally scalable. So if your business outgrows
these basic features you can upgrade seamlessly
with a few clicks. It's worth considering this
and planning for the future when choosing your first
accounting software package. But who should avoid simple start?
Businesses that need multiple users or if you work with suppliers
who offer you credit terms then you might want access to
the full accounts payable ledger. Simple Start also doesn't do any time
or inventory tracking so if you charge by the hour
or sell physical products then this might not be for you.
You will need to look into the other versions of QuickBooks Online
which brings me on to QuickBooks Online Essentials
this is the level up from simple start and includes all of the features
I just mentioned and some. The first major addition
is accounts payable. The ability to manage and track your bills.
You can run an Accounts Payable ageing summary to find out what
you've got overdue and you can now pay multiple bills
at the same time this is a big time saver if you receive
a lot of these. QuickBooks Online essentials also gives
three team members access to the platform and the ability
to track time in timesheets. Who should avoid essentials?
Well at $40 per month it’s quite pricey it's double the cost of simple start.
I would like to mention though that QuickBooks Online now lets
you downgrade if you decide that you're not using these extra features.
I'll drop link in the description to this post
which explains how you can do that. If you sell physical products
and you want to track them then essentials still isn't for you.
You’ll want to look into QuickBooks Online Plus instead.
QuickBooks Online Plus gives you access to full inventory tracking
so you can set up inventory products track them and receive notifications
if you're running low on stock. This will help you quickly identify
what's in demand and create purchase orders to replenish your inventory.
Plus also lets you segment your reporting. This is handy if you run a larger business
with multiple locations or projects and you want to monitor them all separately.
However all of this comes at a hefty price tag
$70 per month so I'd avoid paying for QuickBooks Online Plus unless
you absolutely have to. Plus used to be Intuit’s top of the line product
however they've now added a new one
QuickBooks Online Advanced aka the beast.
I won't go too much into depth on this one because I haven't had the opportunity
to use it yet. But QuickBooks Online advanced
lets up to 25 users access the software at the same time.
It also includes the new Fathom smart reporting feature
which will help you track your KPIs each month through some snazzy
looking reports. In this version you can also customise
user permissions get better customer service
and access some free training. Advanced is definitely aimed at
medium to larger sized businesses and that's reflected in the price
one hundred and fifty dollars per month
Ouch
it's not for everyone.
So which version of QuickBooks Online is right for you?
Well QuickBooks Self-Employed is definitely the cheapest option
at ten dollars per month but it's really only aimed at
contractors and freelancers with simple income streams.
There's no doubt that is a helpful tool it will allow you to separate
your business and personal transactions and maximise your tax deductions
but it's really not set up for small business because it doesn't support
double entry accounting and perhaps most importantly
it doesn't scale. So keep that in mind.
Simple Start does scale and at twenty dollars per month
it’s the base level version of QuickBooks Online
and is probably best for most small business owners
who are just getting started. You can easily upgrade it
to a different package if you end up needing those extra features.
Simple Start is especially good for solopreneurs who are selling
services or digital products and who are ok with having
that single user access. I’d consider the jump to essentials
if you have a larger team and need more users.
At $40 per month it’s twice the cost of simple start.
You might also want to consider it if you need that full
accounts payable functionality. Remember you can always start here
and downgrade later if you decide that it's overkill.
Again this one's mainly for service or digital based businesses
that don't need inventory tracking. If selling physical products
is your business then QuickBooks Online Plus is your best bet
at $70 per month it's quite expensive however for that price tag
you'll get 5 users and the ability to track inventory across multiple locations.
QuickBooks Online Advanced is for medium to larger sized businesses
at hundred and fifty dollars per month it’s Intuit’s premium product
and it could be worth considering if you have a large team that requires
more than five users. The advanced smart reporting feature
looks really neat and it might be worth the dollars
if you like fast visual analytics to measure your performance.
Remember you can use my affiliate link down in the description
to get access to that free trial or the discount for all of these.
Whichever you choose I do recommend you get in touch with
a pro advisor to help you along your way. If you have no background in accounting
then it can be easy to make mistakes without having the proper guidance.
Check out this video on how to use QuickBooks Online
for a more in-depth look at some of the features
and don't forget to subscribe for more QuickBooks and Accounting tutorials
and as always if you've got any questions hit me up in the comments
or message me directly on instagram @accountingstuff
cya