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QuickBooks Online vs. Desktop: How They Compare in 2020

Compare QuickBooks Online and Desktop to see which is better for your business finances.
Editor's note: Fundera exists to help you make better business decisions. That’s why we make sure our editorial integrity isn’t influenced by our own business. The opinions, analyses, reviews, or recommendations in this article are those of our editorial team alone.

QuickBooks Online vs. Desktop: How They Compare

QuickBooks Online vs. Desktop is a common debate among small business owners hoping to choose the perfect accounting software for their business. The biggest difference between Online vs. Desktop is that Online requires no installation on a computer and Desktop does.

Product-based businesses with inventory needs typically work better with Desktop, whereas service-based businesses or businesses that use multiple devices typically choose Online.

Today, there are more units of Desktop used by small businesses than Online. However, many small businesses are converting their Desktop to Online. Plus, 80% of new QuickBooks users are choosing Online over Desktop.

You need to know the differences between QuickBooks Online vs. Desktop—whether you’re starting to use QuickBooks for the very first time or you’re a loyal QuickBooks user considering converting from one version to another.

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QuickBooks Online vs. Desktop: How Their Costs Compare

While comparing QuickBooks Online and Desktop, the first thing most business owners want to know is how their costs measure up. Because of their different software structure, QuickBooks Online and QuickBooks Desktop will be priced differently, as well.

Versions of Online will come with a monthly cost, whereas versions of Desktop will simply entail a larger, one-off cost.

QuickBooks Online will be priced as follow:

  • Simple Start: $25 a month
  • Essentials: $40 a month
  • Plus: $70 a month
  • Advanced: $45 a month

And if you purchase Online now—and opt out of the optional free trial—you could access a 50% discount for your first three months.


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QuickBooks Desktop, on the other hand, will carry the following one-off prices:

  • Pro: $299.95
  • Premier 2019: $499.95
  • Enterprise: $1,213

QuickBooks Online vs. Desktop: All of the Differences

While it’s important to recognize how Intuit’s emphasis on QuickBooks Online will mean that product will get better faster, leaving QuickBooks Desktop behind, you still have to ask yourself whether or not QuickBooks Online is the right product for you now.

To do this, let’s look at the facts. Where do Online and Desktop differ? Where does Online or Desktop excel? Let’s find out:

QuickBooks Online: The Details

As you’ll come to learn when we cover the features that Desktop has that Online doesn’t,  Online has a few feature gaps. As Desktop has been around longer, it’s more powerful. But there are many, many third-party Quickbooks apps that you can access through Online that will fill those gaps. There’s an app to answer pretty much any hesitation a small business owner could have about choosing Online over Desktop.

Of course, you may not want to pay for third-party apps, and that’s something you have to evaluate when comparing the two. Below are the features supported by Online that you can’t find in any version of Desktop:

  • Automatically schedule and send transactions
  • Attach documents, images, signatures & more to transactions through mobile and desktop
  • Use audit log to review actions and track changes over time
  • Track by location in addition to (or instead of) by class with multiple location labels
  • Relabel your customers with seven additional label options
  • Automatic nightly bank transaction sync with undo option
  • Custom banking rules by dollar value, percentage, class, and location
  • Auto-add bank rule option
  • Unlimited time tracking
  • Unlimited reports-only users
  • Delayed charges and delayed credits to schedule future transactions
  • Journal entries with multiple AR/AP lines
  • Multiple budgets per fiscal year
  • Management reports create presentation-ready packages of reports
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QuickBooks Desktop: The Details

Generally speaking, QuickBooks Desktops beats out QuickBooks Online in managing large amounts of inventory (making it a great accounting option for retail stores) and job costing.
Desktop still offers the following feature sets that Online does not. If you can’t live without any of the below, then Desktop is most likely best for you. Keep in mind that some of the features below are only supported in QuickBooks Enterprise and Premier, and not QuickBooks Pro.

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Data Entry

  • Create batch invoices
  • Billing rate levels
  • Enter batch transactions
  • Enter batch timesheets
  • Pay vendors online through ACH
Job Costing

  • Job costing module
  • Estimate vs. actual job costing reports
  • Mileage tracking
  • Payroll job costing
  • Labor burden costing
  • Change orders on estimates
  • Markup column on estimates

  • Multiple vendor ship-to addresses
  • Industry-specific reporting
  • Business planner by class
  • Forecasting by class
  • Balance sheet by class
  • Better report header and footer customization

  • Average cost inventory valuation method
  • Set and maintain inventory reorder points
  • Receiving partially against purchase orders
  • Sales orders
  • Availability to promise
  • Build assembles or manufacturing features
  • Unit of measure

  • Backup and restore feature
  • Condense file
  • Period copy
  • Client data review tools
  • Fix unapplied payments and credits
  • Clean-up undeposited funds
  • Fix sales tax
  • QuickBooks statement writer
  • 1099 feature
  • Post to additional AR/AP accounts

QuickBooks Online vs. Desktop: Alternatives to Consider

After comparing QuickBooks Online and Desktop, perhaps you’re not quite convinced that either of these QuickBooks accounting software options are right for your business. Or, now that you know how Online and Desktop compare to each other, you simply might want to know how they compare to top alternatives.

Wave Accounting Software

For instance, if you want to access free accounting software for your small business, then neither QuickBooks Online nor QuickBooks Desktop will meet your needs. Your top alternative will be Wave accounting software. With Wave accounting, business owners are able to access the essential accounting features they need—for no monthly, annual, or one-off cost at all.

For free, you’ll be able to create a Wave account and attach an unlimited number or bank and credit card accounts. You’ll also be able to track income and expenses and invite guest collaborators. Plus, you’ll be able to access customizable sales taxes, add journal transactions, automatically generate accounting reports, and connect accounts like PayPal and Etsy.

Wave also offer add-on services, some of which are free and some of which are pay-as-you-go. For instance, you’ll be able to send invoices and digitize receipts for free with Wave. On the other hand, you’ll have to pay transaction fees to add online payments and monthly payments to add payroll.

QuickBooks Self-Employed

Alternatively, if you’re sole-proprietor looking for an accounting software option that caters directly to your bookkeeping needs, then consider QuickBooks Self-Employed your go-to alternative to QuickBooks Online and Desktop.

With QuickBooks Self-Employed, you’ll be able to separate your business and personal expenses, automatically track mileage, and send invoices on the go. QuickBooks Self-Employed also provides a quarterly estimate of just how much you owe in taxes. And perhaps most importantly, QuickBooks Self-Employed will help you to maximize your Schedule C deductions when it comes time to file your taxes.

QuickBooks Self-Employed will only cost $10 a month as a default price. However, QuickBooks is currently running an offer that will allow you to access QuickBooks Employed for 50% off.

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Xero Accounting Software

Finally, if you’re looking for a similarly powerful option as QuickBooks Online or QuickBooks Desktop, then consider Xero accounting software another top option for your business. Xero is a cloud accounting software that users can access from any device that connected to the internet. And when you compare Xero vs. QuickBooks Online, you’ll see that most of the core accounting features are comparable. Xero is priced on a monthly basis, and its most basic plan—Xero Early—will start at just $9 a month. The two other plans—Growing and Established—will cost $30 a month and $60 a month, respectively.

QuickBooks Online vs. Desktop: How Do You Decide?

The easiest way to make the decision between QuickBooks Online vs. QuickBooks Desktop is to first look at the accounting app features that Desktop has that Online doesn’t, and ask yourself:

Is there anything I can’t live without?

If you find something that you absolutely need in Desktop, see if there’s a 3rd party app that can do that for you with Online. But if there is no app, or you feel you’d pay too much to add apps and fill the gaps in Online, then Desktop might be for you.

Just remember: Intuit is notably investing more in their online products than their desktop products. Their online products will only get better and better. Not to mention, an online software is better in so many ways, whether for your own communication with your bookkeeper or accountant, your internal communication, or even saving money on file transfers or hosting.

QuickBooks Online vs. Desktop isn’t always an easy question to answer. Always consult with your bookkeeper or accountant (who are hopefully QuickBooks certified) before deciding, and if you’re not ready to make the change to Online now, prepare yourself that you’ll most likely have to make that change at some point in your business’s future.