Bookkeeping

What Is QuickBooks & How Does It Work?: A Complete Guide

You can take a printout of these statements for your accountant and send it across to them at the time of filing or invite them to view these statements without needing a login ID or password. QuickBooks Online is a cloud-based software that can be accessed anytime and anywhere from any internet-enabled device and has monthly subscription options. Meanwhile, QuickBooks Desktop is an on-premise software that needs to be installed on the computer where you’ll use it and is available as an annual subscription.

  1. Meanwhile, you can ensure that you pay your bills on time by creating an A/P report.
  2. For multiple users, bill pay and the ability to add billable hours to invoices, you’ll need to upgrade to the Essentials plan, which costs $60 per month.
  3. Though QuickBooks Online has a handful of convenient features that can speed up your workflow and even automate some of it, the software can be complex.

The QuickBooks product line includes several solutions to support different business needs, including QuickBooks Online, QuickBooks Desktop, QuickBooks Payroll, QuickBooks Time, and QuickBooks Checking. When customers no longer have an active, paid subscription, they will not be eligible to receive benefits. Support hours exclude occasional downtime due to system and server maintenance, company events, observed U.S. holidays and events beyond our control.

Advanced also creates schedules outlining the depreciation expenses over time. You could also choose to hire a QuickBooks ProAdvisor through QuickBooks Live, an add-on to QuickBooks Online. You can also track your business mileage and view financial reports from your smartphone. The QuickBooks Online mobile app is available for download on Google Play and App Store, but you need an active subscription to use its features. You can also add bills in QuickBooks when you receive them so that QuickBooks can help you track upcoming payments. Our guide on how to enter bills into QuickBooks Online covers this process in detail.

QuickBooks makes it easy to create invoices either from scratch or from an earlier estimate. If you choose to cancel your QuickBooks Online subscription, you will still have access to your QuickBooks Money account and data. A new feature in QuickBooks Online Advanced, the fixed asset accounting tool allows you to add, manage, and track fixed assets, like buildings, vehicles, machinery, and equipment. Instead of computing depreciation expenses manually, QuickBooks Online does it for you automatically based on the depreciation method you choose, such as straight line and double declining.

Find help articles, video tutorials, and connect with other businesses in our online community. Using this payroll guide, we’ll walk you through the entire payroll process step by step. Keep reading to learn about the different processing methods you can choose from.

Manage and Track Fixed Assets

Excel is a spreadsheet program that you can use for multiple functions like creating databases, project management and, yes, accounting. However, creating a solid accounting database in Excel requires a thorough knowledge of how to prepaid rent and other rent accounting for asc 842 explained set up spreadsheets and all the formulas that may entail. QuickBooks allows you to keep track of financial functions like income and expenses, employee expenses and inventory in real time and fulfill tax obligations hassle-free.

Explore all you can do with QuickBooks

QuickBooks Online is available both as a desktop application and an online SaaS (software as a service) model. However, access to add-on services to the QuickBooks Desktop for Windows 2019 was discontinued after May 31, 2022. As you accept payment for any item in the inventory, the right expense account is updated and reflected automatically in taxable income.

NerdWallet’s accounting software ratings favor products that are easy to use, reasonably priced, have a robust feature set and can grow with your business. All plans include access to QuickBooks Online mobile apps, customer support and third-party app integrations. Add-on services — including QuickBooks Payroll and QuickBooks Payments — will incur separate costs. A popular add-on is the payroll feature where you can run payroll and access benefits in one convenient place. It does cost more to access this, which is approximately $22.50 more per month plus $5 per employee, per month. When subscribing to this service, you’ll get a 1099 e-file of forms and a next-day direct deposit.

When comparing it to other bookkeeping providers, such as FreshBooks and Xero, we note that all three have a 30-day free trial to test the system out. This is important to note since you’ll want to make sure that it is capable of doing what you need in a manner that you understand and can digest. Another cumbersome feature that users don’t like is the requirement that clients must establish their own accounts to pay an invoice. Other popular merchant processors don’t require this, making collecting payments more difficult. They’ll provide guidance, answer your questions, and teach you how to do tasks in QuickBooks, so you can stay on track for tax time and run your business with confidence. However, if you opt for the free trial you lose the opportunity to save 50% on your first three months.

This can help ensure that the correct tax amount is charged on each sale. It can also track the sales tax collected on transactions and the sales tax owed to the various tax authorities. It’ll make tax time easier if your Chart of Accounts includes all the line items required on your tax return. In addition to those line items, create enough detail in your Chart of Accounts to provide whatever information will help you better manage your business. Our tutorial on how to set up a COA in QuickBooks Online walks you through how to add, delete, and customize accounts. Your COA in QuickBooks provides a complete listing of all the accounts you need to track your financial data.

What do accountants think of QuickBooks Online?

Once done, QuickBooks tracks your bills and expenses automatically. Clarify complexity with efficient inventory management and integrated payroll and time tracking. Plus, with access for up to 40 users, Enterprise can scale with your business as it grows. It will even calculate your estimated quarterly tax payments and remind you when they’re due. Its mobile app will use the GPS in your phone to sense every time you’re in a moving vehicle automatically. Then, you can review your trips, classify them as personal or business, and mark them as billable to a customer.

QuickBooks Online is a cloud-based product that doesn’t require software installation, allowing you to access your data from any computer with an internet connection by using your secure login. It is available in four subscription levels, Simple Start, Essentials, https://intuit-payroll.org/ Plus, and Advanced, and is ideal for any business without complicated job-costing requirements. Collaborating with a QuickBooks ProAdvisor can be a valuable experience that optimizes your accounting and financial management processes for efficiency and accuracy.

Business stage

For more information about the differences between the two programs, read our comparison of QuickBooks Online vs QuickBooks Desktop. QuickBooks Online integrates with hundreds of business applications available in the QuickBooks App Store. These integrated apps are designed to help you simplify the various aspects of your business, from bill management and payment acceptance to cash flow forecasting. One of the best ways to improve your cash flow is to offer customers the option to pay their invoices online. You can add QuickBooks Payments (formerly known as Intuit Merchant Services) so that customers can pay online directly from their emailed invoice. Available in Plus and Advanced, the inventory management feature helps you track the quantity and cost of your inventory.

You’ll get the most value out of QuickBooks Online if you understand how to use its transaction tags and reporting capabilities. If you’re not sure whether you’re getting the most of these features, consider asking your accountant to review your chart of accounts and how you’re categorizing transactions. Though QuickBooks Online has a handful of convenient features that can speed up your workflow and even automate some of it, the software can be complex. You’ll get the most out of it if you have some knowledge of basic accounting concepts.

Terms, conditions, pricing, service, support options, and support team members are subject to change without notice. The payroll add-on calculates payroll automatically as often as you want. Three plans give your business the scalability to grow over time and add features as necessary. The Core plan offers everything a small to midsized business would need to get started, while Premium and Elite plans enable options such as same-day direct deposit and expert assistance with setup. Competitors can offer plans with lower monthly fees and similar features.