Choosing the right accounting software can significantly impact your business efficiency. QuickBooks offers two main options: Desktop and Online. Each has unique advantages that may suit different business needs.
Both versions have their own strengths and are suited to different types of businesses. In the sections below, we will look at the main differences between QuickBooks Online and Desktop in detail, including features, costs, and which businesses they are best for. This will help you decide which version is right for your business.
Understanding the Key Differences
QuickBooks Desktop is a locally installed software with robust features. QuickBooks Online is cloud-based, offering flexibility and remote access. Your choice depends on your business requirements.
QuickBooks Online: Cloud-Based Convenience
| Feature | QuickBooks Online | QuickBooks Desktop |
| Access | Cloud-based, accessible anywhere with internet | Installed locally on computer |
| Device Compatibility | Works on PC, Mac, tablets, smartphones | PC only (Mac requires additional software) |
| Updates | Automatic updates included | Manual updates or annual subscription |
| Pricing Model | Monthly subscription | Annual subscription (since 2022) |
| User Access | Multiple simultaneous users with no drama | Requires proper network setup for multi-user |
| Backups | Automatic cloud backups (no manual control) | Manual backups with full control |
| Integration | Extensive third-party app integration | Limited integration options |
| Banking | Superior bank feeds and automation | Basic bank feeds (may require extra fees) |
| Inventory Management | Basic inventory tracking | Advanced inventory features (Premier/Enterprise) |
| Manufacturing | Limited manufacturing features | Bill of Materials and assembly tracking |
| Job Costing | Basic job costing | Advanced job costing with estimates comparison |
| Payroll | Standard payroll features | Best-in-class payroll with detailed allocation |
| Reporting | Improving but still limited | Extensive customisation options |
| Forms Customisation | Limited template options | Full form design customisation |
| IT Requirements | No server needed | Server required for multi-user setup |
Key Advantages
QuickBooks Online offers 100% cloud-based accessibility. You can work from any device with an internet connection, including smartphones and tablets via dedicated apps. The platform eliminates IT infrastructure needs. There’s no server setup or network configuration required, making it ideal for businesses without technical support.
Superior Features
Online banking integration stands out in QuickBooks Online. The system offers powerful bank feed connections, automated categorisation, and intelligent transaction suggestions. Automatic updates ensure you always have the latest features. The software evolves continuously without requiring manual updates or reinstallation.
Limitations
QuickBooks Online offers fewer customisation options for reports and forms. While improving with new tools like the custom report builder, it still lags behind Desktop. Inventory management is basic in QuickBooks Online. It lacks features like sales orders, bill of materials, and advanced tracking options needed by inventory-heavy businesses.
QuickBooks Desktop: Power and Control
Standout Capabilities
QuickBooks Desktop excels at inventory management. Premier and Enterprise versions offer sales orders, bill of materials, multiple units of measure, and advanced tracking. The payroll system in Desktop is considered best-in-class. It provides complete flexibility for editing, adjusting, and allocating payroll expenses with detailed job costing.
Advanced Options
Manufacturing businesses benefit from Desktop’s bill of materials feature. This allows tracking raw materials, labour, and overhead costs to determine finished goods pricing. Enterprise editions offer barcode scanning support. This includes mobile scanning options for picking, packing, and shipping workflows that streamline inventory operations.
Drawbacks
QuickBooks Desktop requires more technical setup. Multi-user environments need server configuration and proper networking, increasing IT complexity and cost. Since 2022, Desktop has moved to subscription pricing. This makes the cost difference between Online and Desktop smaller than in previous years.
Making the Right Choice for Your Business
| Version | Monthly Cost | Annual Cost | Users | Best For |
| QuickBooks Online Simple Start | £15 | £180 | 1 | New, very small businesses |
| QuickBooks Online Essentials | £24 | £288 | 3 | Service-based small businesses |
| QuickBooks Online Plus | £35 | £420 | 5 | Growing businesses with basic inventory |
| QuickBooks Online Advanced | £65 | £780 | 25 | Larger businesses needing better reporting |
| QuickBooks Desktop Pro | £33* | £400 | 3 | Businesses needing desktop features |
| QuickBooks Desktop Premier | £50* | £600 | 5 | Industry-specific businesses |
| QuickBooks Desktop Enterprise | From £100* | From £1,200 | 1-40 | Complex businesses with advanced needs |
For Service-Based Businesses
Service businesses typically benefit from QuickBooks Online. The cloud accessibility, third-party integrations, and automated features suit businesses without complex inventory or manufacturing needs. Professional services firms, consultancies, and freelancers find QuickBooks Online’s
mobility particularly valuable. The ability to create invoices and track expenses on-the-go improves efficiency.
For Inventory-Heavy Businesses
Retail, wholesale, and manufacturing businesses often need QuickBooks Desktop. The advanced inventory tracking, sales orders, and manufacturing features are essential for these operations.
Construction companies benefit from Desktop’s superior job costing. The ability to compare estimated versus actual costs helps maintain profitability on projects.
For Growing Businesses
Startups and new businesses usually find QuickBooks Online easier to implement. The simplicity, lower initial costs, and lack of IT requirements make it accessible.
As businesses grow, some migrate to Desktop for advanced features. However, with QuickBooks Online continuously improving, this transition is becoming less necessary.
Recent Developments in QuickBooks
QuickBooks Online Improvements
QuickBooks Online has significantly improved its reporting capabilities. The new custom report builder tool offers more flexibility, narrowing the gap with Desktop.
Mobile functionality continues to expand in Online versions. The mobile app now allows invoice creation, expense tracking, and even basic inventory management.
QuickBooks Desktop Changes
Since 2022, QuickBooks Desktop has moved to a subscription-only model. This eliminates the one-time purchase option previously available to users.
The pricing structure change has made Desktop and Online more comparable in cost. This shifts the decision focus more toward features rather than price difference.
Data Security and Backup Considerations
Cloud Security vs. Local Control
QuickBooks Online offers automatic backups managed by Intuit. This eliminates manual
backup processes but reduces control over your historical data.
Desktop gives complete control over backups and data storage. This appeals to businesses with strict data retention policies or regulatory requirements.
Accessibility Trade-offs
Online versions provide always-on accessibility with proper internet connection. This facilitates remote work and multi-location business operations.
Desktop versions work without internet but limit remote access. Hosting services can provide remote access to Desktop versions at additional cost.
FAQs
Can I switch from QuickBooks Desktop to Online?
Yes, Intuit offers migration tools. However, some features don’t transfer perfectly, and customisations may need to be rebuilt in the Online version.
Does QuickBooks Online work without internet?
No, QuickBooks Online requires internet access. For areas with unreliable connections, Desktop might be more suitable.
Which version has better customer support?
Both offer similar support options. Online users report slightly faster resolution times, while Desktop users can also seek help from certified ProAdvisors.
Can QuickBooks Desktop handle multiple business locations?
Yes, especially in Enterprise editions. Advanced inventory features allow tracking stock across multiple sites with detailed reporting.
Does QuickBooks Online support manufacturing businesses?
QuickBooks Online has limited manufacturing support. Businesses needing bill of materials and assembly tracking should consider Desktop Premier or Enterprise.
Conclusion: Making Your Decision
Choosing between QuickBooks Online and Desktop depends on your unique business needs. Online offers convenience and accessibility, while Desktop provides power and control. For many modern small businesses, QuickBooks Online provides sufficient functionality with the added benefit of automatic updates and anywhere access.
Businesses with complex inventory, manufacturing needs, or detailed job costing requirements may still benefit from QuickBooks Desktop’s advanced capabilities. Consider your business growth trajectory when deciding. The right accounting software will scale with your business and support your financial management needs as you expand.
Parul is a dedicated writer and expert in the accounting industry, known for her insightful and well researched content. Her writing covers a wide range of topics, including tax regulations, financial reporting standards, and best practices for compliance. She is committed to producing content that not only informs but also empowers readers to make informed decisions.