Hi everyone, Kabir here. As a small business consultant, I often come across a question that throws many entrepreneurs for a loop: “What’s the difference between QuickBooks Online and QuickBooks in the cloud?”
Both solutions use QuickBooks for accounting and make use of cloud computing in some way. They aren’t precisely the same, though. Actually, selecting the best accounting software for your company depends on your ability to distinguish between these two possibilities.
So, let’s dive in and clear up the confusion!
Understanding Cloud-Based Accounting
Before we compare QuickBooks Online and hosted QuickBooks Desktop (often referred to as “QuickBooks in the cloud”), let’s establish a common ground: cloud-based accounting.
Cloud-based accounting, in essence, is the practice of managing your financial data on remote servers accessed through the internet. This eliminates the need for traditional desktop software installations and local data storage. Here are some key benefits of cloud-based accounting:
- Accessibility: Access your financial data from any device with an internet connection, anytime, anywhere. This is a game-changer for remote teams and entrepreneurs on the go.
- Real-Time Data: Cloud-based accounting ensures your data is always up-to-date. Changes made by one user are reflected instantaneously for everyone with access, fostering better collaboration and decision-making.
- Collaboration: Multiple users can access and work on the accounting software simultaneously, streamlining workflows and improving team efficiency.
- Automatic Backups and Disaster Recovery: Cloud-based solutions automatically back up your data, offering peace of mind in case of hardware failures or natural disasters.
With these advantages in mind, let’s explore the two main contenders in the QuickBooks cloud arena: QuickBooks Online and hosted QuickBooks Desktop.
QuickBooks Online: A True Cloud Solution
QuickBooks Online is a subscription-based accounting service designed from the ground up for the cloud. Here’s what sets it apart:
- Accessibility Anywhere, Anytime: QuickBooks Online is entirely web-based. As long as you have an internet connection and a web browser, you can access your financial data, invoices, and reports from any device – desktop, laptop, tablet, or smartphone.
- Real-Time Collaboration: Multiple users can access and work on your QuickBooks Online account simultaneously. This allows for seamless collaboration between your accounting team, bookkeeper, or even yourself and your clients.
- Focus on Ease of Use: QuickBooks Online is known for its user-friendly interface and intuitive design. Even users with limited accounting experience can navigate the software effectively.
- Automatic Updates: QuickBooks Online takes care of software updates automatically. You’ll always have access to the latest features and security patches, ensuring a smooth and secure accounting experience.
- Scalability: QuickBooks Online offers various subscription plans to cater to businesses of all sizes, from freelancers and sole proprietors to growing startups.
QuickBooks Desktop in the Cloud (Hosted Solution): A Misconception
The term “QuickBooks in the cloud” often refers to a hosted version of QuickBooks Desktop. Here’s what you need to know about this option:
- Familiar Desktop Experience: Hosted QuickBooks Desktop allows you to use the familiar QuickBooks Desktop software you might already be comfortable with.
- Remote Access with a Twist: While you can access your QuickBooks Desktop data remotely through a third-party cloud service provider, it’s important to understand that the software itself is still installed locally on your computer. The cloud service simply facilitates remote access.
- Maintenance and Installation Required: Unlike QuickBooks Online, hosted QuickBooks Desktop requires installation and maintenance on your local machine. This means you’ll be responsible for software updates, security patches, and potential compatibility issues with your operating system.
- Limited Collaboration: Collaboration features in hosted QuickBooks Desktop are typically limited compared to QuickBooks Online. While some providers offer multi-user access, it often comes with additional costs and limitations.
Choosing Between QuickBooks Online and Hosted Desktop
Now that we understand the core differences between QuickBooks Online and hosted QuickBooks Desktop, let’s help you choose the right option for your business needs:
Consider these factors when making your decision:
- Accessibility: If remote access and real-time collaboration are crucial for your team, QuickBooks Online is the clear winner.
- Team Size: For small teams or solopreneurs, QuickBooks Online’s collaboration features are often sufficient. However, larger teams with complex accounting needs might require the more robust collaboration options offered by some hosted QuickBooks Desktop solutions (be prepared for additional costs).
- Technical Expertise: QuickBooks Online is designed with ease of use in mind. If you or your team are not comfortable with technical aspects of software installation and maintenance, QuickBooks Online is the simpler option.
- Budget (continued): Hosted QuickBooks Desktop typically involves a one-time software purchase cost on top of the monthly hosting fees charged by the third-party provider. Consider the total cost of ownership when making your decision.
- Data Security: Both QuickBooks Online and reputable hosted QuickBooks Desktop providers prioritize data security. However, with QuickBooks Online, data security is entirely their responsibility. With hosted solutions, it’s crucial to choose a provider with robust security measures in place.
- Industry-Specific Needs: Some industries have specific compliance regulations regarding data storage and access. If your business falls under such regulations, consult with your accountant to determine if QuickBooks Online or a specific hosted Desktop solution would be a better fit.
Here’s a table summarizing the key feature comparisons between QuickBooks Online and Hosted QuickBooks Desktop:
Feature | QuickBooks Online | Hosted QuickBooks Desktop |
---|---|---|
Accessibility | Accessible from any device with internet | Requires remote access software and internet connection |
Collaboration | Real-time collaboration for multiple users | Limited collaboration features (may require additional costs) |
Scalability | Easily scalable with various subscription plans | Scalability depends on the chosen hosting plan and local hardware limitations |
Data Security | Managed by Intuit (QuickBooks Online provider) | Responsibility depends on the hosting provider |
Cost | Subscription-based pricing | One-time software purchase + monthly hosting fees |
Ease of Use | User-friendly interface | Requires software installation and maintenance |
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Remember: There’s no one-size-fits-all answer. The best choice depends on your specific business needs and priorities.
Conclusion
You can make the best choice for your company if you know the main distinctions between hosted QuickBooks Desktop and QuickBooks Online. When selecting the best alternative, take into account variables such as team size, technical proficiency, budget, and industry regulations.
Here are some additional resources to help you on your journey:
- QuickBooks Online: https://quickbooks.intuit.com/login/
- Intuit Cloud Hosting Solutions: https://quickbooks.intuit.com/desktop/enterprise/hosting/
I hope this article has shed light on the often-confusing world of “QuickBooks in the cloud.” If you have any further questions, feel free to leave a comment below!