4 QuickBooks Online Subscription Options - dummies

4 QuickBooks Online Subscription Options

By Elaine Marmel

QBO and QBOA fall into the category of Software as a Service (SaaS). As such, you don’t buy the software. Instead, you rent it; that is, you buy a subscription to use the software for a time period specified by the seller.

Traditionally, you buy a license to use software that you install on your computer, and typically, that license permits you to install the software on only one computer.

And, of course, a QBO user can pay varying amounts for a subscription, depending on the subscription level purchased.

QBO is available at four different subscription levels, and each subsequent subscription level costs more and contains more functionality. The QBO subscriptions available are

  • Self-Employed
  • Simple Start
  • Essentials
  • Plus

All versions of QBO share three attributes in common. First, you can use a tablet, smartphone, or desktop computer to access your data. Second, your data is automatically backed up online. And third, all versions of QBO use 128-bit Secure Sockets Layer (SSL), the same security and encryption used by banks to secure data sent over the Internet.

Use the following information to identify the lowest subscription level that will meet your requirements. At this point in time, you can upgrade to a higher level, but you cannot downgrade to a lower level.

Accounting professionals signing up clients for QBO and creating client companies originally couldn’t switch client companies from one version of QBO to another if the accounting professional created the client as part of the Intuit Wholesale Pricing program. However, that’s no longer true. So, you no longer need to anticipate your client’s requirements for more advanced features like the ability to track inventory or prepare 1099s.

The Self-Employed version

This version of QBO is aimed at freelancers and self-employed individuals, basically, those who receive Federal Form 1099 to account for the money they’ve been paid and pay their taxes using Schedule C of IRS Form 1040. Using the Self-Employed version, you can

  • Separate business from personal spending
  • Calculate and pay estimated quarterly taxes
  • Track mileage and IRS Form 1040 Schedule C (the IRS form that most self-employed people must complete to determine business net income or loss) information
  • Track income and expenses
  • Download transactions from your bank and credit card accounts

Like the other versions of QBO, you can use a tablet, smartphone, or desktop computer to access your data. In addition, the Self-Employed version uses the same security and encryption as banks, and your data is automatically backed up online. As you might expect, this version has the fewest reports available — only three — and only one person can access QBO.

Currently, the Self-Employed version of QBO doesn’t link with QBOA.

If you opt to include TurboTax in your subscription, you also can pay your estimated quarterly taxes online and export Schedule C information from QBO to Turbo Tax so that you can prepare your tax return more easily. With TurboTax as part of your subscription, you receive one federal and one state electronic tax return filing at no extra cost.

The Simple Start version

The Simple Start version of QBO is great for a new business with basic bookkeeping needs. With Simple Start, you can

  • Track your income and expenses
  • Download transactions from your bank and credit card accounts
  • Create an unlimited number of customers
  • Send unlimited estimates and invoices
  • Print checks and record transactions to track expenses
  • Import data from Microsoft Excel or QuickBooks desktop
  • Invite up to two accountants to access your data
  • Integrate with available apps

Although the Simple Start version supports Accounts Receivable functions, you can’t track bills due in the future in the Simple Start version because it doesn’t include any Accounts Payable functions. And, one other important consideration: The Simple Start version also has no general ledger.

Although the Simple Start version allows two accountants to work in the client’s company, Simple Start is still designed for a single user. Therefore, the accountant cannot create the client’s company for the client. At the time the company is created in QBO, whoever creates the company becomes, in QBO parlance, the Master Administrator.

In addition to the single-user restriction, the Simple Start version offers more than 20 reports. And Simple Start users can memorize report settings and produce memorized reports.

For subscription levels that support multiple users, the accountant can create the company for the client and then assign the Master Administrator role to the client. And, if the accountant doesn’t make the client the Master Administrator when creating the company, the accountant can, later on, transfer the Master Administrator role to the client.

The Essentials version

The Essentials version of QBO includes all the features found in Simple Start. In addition, with the Essentials version, you can

  • Set up invoices to automatically bill on a recurring schedule
  • Take advantage of Accounts Payable functions, including entering vendor bills and scheduling their payment for later
  • Compare your sales and profitability with industry trends
  • Compare your sales and profitably with industry trends
  • Create and post recurring transactions
  • Control what your users can access

The Essentials version permits three simultaneous users and two accountant users. In addition, the Essentials version contains the reports found in Simple Start and 20 additional reports.

The Plus version

The Plus version of QBO is the most full-featured version of QBO. It contains all the features found in the Essentials version. In addition, you can

  • Create, send, and track purchase orders.
  • Track inventory using the first in, first out (FIFO) inventory valuation method. QBO supports light inventory needs: If you sell finished goods, QBO should be able to manage your needs. But if you need to assemble finished goods to sell, QBO won’t meet your needs on its own. You can look for an app to supplement your inventory needs.
  • Track, create, and send 1099-Misc forms.
  • Categorize income and expenses using class tracking.
  • Track sales and profitability by business location. You can assign only one location to a transaction, but you can assign multiple classes to a transaction.
  • Give employees and subcontractors limited access to the QBO company to enter time worked.
  • Track billable hours by customer.

QBO supports light job-costing needs, but it does not allow you to automatically cost labor.

  • Create budgets to estimate future income and expenses, and create multiple budgets per year, location, class, or customer.

Accounting professionals: The company that comes with QBOA is a Plus company.

The Plus version supports five simultaneous users and two accountant users and can be scaled up to support 20 users. The Plus version also contains more than 65 reports: all the reports found in both the Simple Start and the Essentials versions, and some additional reports.

Essentials and Plus with Payroll

If an end user signs up for QBO Essentials or Plus on his own and creates his own company, he can create the company using the Plus Payroll option, or later he can sign up for QBO Payroll (QBOP) separately. An accountant also can create the company that uses QBOP for a client.