QuickBooks Online vs. Desktop Compared: Which Is Right for Your Business?

The biggest difference between QuickBooks Online vs. QuickBooks Desktop is that QuickBooks Online requires no installation on a computer, operating as web-based accounting software, whereas Desktop does—it’s a locally installed platform.

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

Use this QuickBooks Online vs. Desktop comparison chart to get a quick look at the most noteworthy differences between these two platforms.

QuickBooks Online vs. Desktop Comparison Chart

QuickBooks Online is priced on a monthly subscription basis. The price of each of its four plans increases as the plan levels increase.

With QuickBooks Desktop, on the other hand, pricing is a little more complex.

• With QuickBooks Pro and Premier, you pay a one-time fee for the basic version or opt for Pro/Premier Plus at an annual subscription fee.
• With QuickBooks Enterprise, pricing is based on a few factors. If you choose Enterprise with hosting, there’s a monthly subscription fee. Go without hosting, on the other hand, and you’ll pay an annual subscription fee.
• Next, choose your plan level—Silver, Platinum, or Diamond; prices increase with each level.
• Last, choose the number of users. The more users, the higher the cost.

• Simple Start: $25 per month
• Essentials: $50 per month
• Plus: $80 per month
• Advanced: $180 per month

For any plan, you have the option to use a 30-day free trial. If, however, you want to waive the free trial, you’ll be able to access a 50% discount for the first three months of your subscription.

The cost of QuickBooks Desktop is more complex. Let’s break it down based on the three different desktop versions:

• Pro: $399.99
  • Pro Plus: $299.99 per year
• Premier: $649.99
  • Premier Plus: $449.99 per year
• Enterprise:
  • Gold plan, local only, one user: $1,577 per year
  • Platinum plan, local only, one user: $1,940 per year
  • Diamond plan, local only, one user: $3,825 per year
  • Gold plan, with hosting, one user: $175 per month
  • Platinum plan, with hosting, one user: $206 per month
  • Diamond plan, with hosting, one user: $363.79 per month

If you need multiple users with QuickBooks Enterprise, the price per year or per month increases accordingly.

Here’s how to find out whether QuickBooks Online or QuickBooks Desktop is right for you.

Online has a few feature gaps compared to Desktop. Desktop has been around longer, and it’s more powerful. But there are many, many third-party Quickbooks apps you can access through Online that will fill those gaps.

Of course, you may not want to pay for third-party apps, and that’s something you have to consider when comparing the two.

Below are features that QuickBooks Online supports but QuickBooks Desktop doesn’t:

• 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

Generally speaking, QuickBooks Desktop beats QuickBooks Online in managing large amounts of inventory (making it a great accounting option for retail stores) and job costing.

QuickBooks Desktop offers the following features that QuickBooks Online does not. If you can’t live without any of the below, then QuickBooks Desktop is 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.

On top of the fact that QuickBooks Desktop is locally hosted and QuickBooks Online is web-hosted, the largest differences between QuickBooks Online vs. Desktop come down to the features.

• Generally, QuickBooks Online provides more accessibility and is more mobile-friendly.
• QuickBooks Desktop is more advanced when it comes to detailed inventory-, job costing-, data-, and reporting capabilities.

It can be helpful to consult customer reviews to see what other business owners have to say about using the platform:

Overall, QuickBooks Online is highly rated by customers across the internet. On popular review sites, QuickBooks Online typically averages a rating of four stars or higher.

Most QuickBooks Online reviews seem skewed positively—few reviews are completely negative. Of course, there are generally positive reviews that also offer some criticisms of the platform.

Here are some of the most common benefits and drawbacks users cite in QuickBooks Online reviews:

Pros:

• Easy to use
• User-friendly, intuitive interface
• Flexibility to log-in and access data regardless of location
• Customizable for your needs
• Allows you to manage business bookkeeping, accounting, payroll, yourself

Cons:

• Expensive
• Lacking some of the features that Desktop has
• Reporting is too basic
• Can be glitchy and have connection problems

Many reviewers report switching from QuickBooks Desktop to QuickBooks Online in order to access their financial data on-the-go and from multiple devices. A number of reviewers report switching to Desktop because of missing features in QuickBooks Online.

QuickBooks Desktop customer reviews vary online by version—Pro, Premier, or Enterprise. In general, however, QuickBooks Desktop also gets very positive reviews.

QuickBooks Desktop seems to average four stars or higher on review sites, with most reviews skewing positively.

Here are some of the most common advantages and disadvantages in QuickBooks Desktop customer reviews:

Pros:

• Excellent, customizable features
• Ability to manage all accounting, payroll, banking, etc. in one place
• Easy to set up and use
• Reporting and job costing features are particularly noteworthy

Cons:

• Can be expensive
• Can’t log in to your account remotely
• Customer service is slow and unhelpful
• Product can be glitchy, especially when upgrading to newest version from year to year

There is a lot of overlap between the comments in reviews of QuickBooks Online and of QuickBooks Desktop. The biggest difference, perhaps, is the web-based access, which QuickBooks Desktop lacks.

If you want free accounting software, neither QuickBooks Online nor QuickBooks Desktop will meet your needs. A top alternative will be Wave accounting software.

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

Wave also has add-on services, some of which are free and some of which are pay-as-you-go. For instance, you can send invoices and digitize receipts for free, but there are transaction fees to add online payments and monthly payments to add payroll.

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

With QuickBooks Self-Employed, you can separate 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 important, QuickBooks Self-Employed will help you to maximize your Schedule C deductions when it comes time to file your taxes.

QuickBooks Self-Employed costs $15 a month as a default price. However, you can get a discount.

Xero accounting software is another top option.

Xero is cloud-based accounting software that users can access from any device connected to the internet. And when you look at Xero vs. QuickBooks Online, most core accounting features are comparable.

Xero is priced on a monthly basis, and its most basic plan—Xero Early—starts at $9 a month. The two other plans—Growing and Established—cost $30 a month and $60 a month, respectively.

*Enterprise prices reflect access for one user, additional users will increase annual/monthly costs

At the end of the day, in choosing between QuickBooks Online vs. Desktop, most business owners find that it comes down to web-based access, specific features and of course, cost.

If you need advanced features, it might be worth investing in QuickBooks Desktop. If web-based access is particularly important, you might see if you can find a third-party accounting app that can cover some of the gaps in QuickBooks Online.

If you’re having trouble deciding between QuickBooks Online vs. Desktop, discuss the issue with your bookkeeper or accountant. These professionals will be able to give you their opinion and help you navigate the process of getting set up on either platform.