What is the Best Version of Quickbooks Online Cloud Accounting for Your Small Business?

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When you go to Quickbooks Online, there are multiple different options for you to look through. So let's talk about which version of Quickbooks is best for your small business because I know it can be difficult to pick which option is going to be the best one for your your small business. 

Why do you even need a bookkeeping software? 

Well, as a business owner, you have to pay taxes on your business income. But you also get to deduct your business expenses from your income, before you pay taxes. 


By having a a bookkeeping software available to you, you are able to quickly and easily look at and provide reports on the money you made and spent in your business for a certain period of time. 


You don't have to be a bookkeeper or an accountant to use Quickbooks. You can learn how to use Quickbooks for yourself. Or if you really don't want to do the bookkeeping, you can hire someone else to do it for you. 


When your bookkeeping is completed on a regular basis, you usually end up paying much less than you would if you ended up getting all of your bookkeeping done at one time. This also allows you to see where you are spending your money every month, and you can also conduct business expense audits as well, much more easily. 

The Quickbooks Options that are Available for your Small Business

Self-Employed

Simple Start

Essentials

Plus

Advanced

Quickbooks Self-Employed

I'm being completely honest here, but you really don't want to buy this version. The name and the price might sway you to choose this option. 


But as an accountant and bookkeeper myself, I have to say this is the last option that you want to purchase for your small business. 


This option is more for independent contractors, not small business owners. 


Also, if you start with this option, any of the work that you do in Quickbooks Self-Employed, you cannot transfer to any other option that Quickbooks has. 


Intuit basically sees Self-Employed as a completely separate product to Quickbooks Online. 


This option will let you track your expenses, but not really your income. So as a small business owner, you are going to need a different version of quickbooks to manage your small business. 


Here are the features that are included in Quickbooks Self-Employed


  • Separate business and personal expenses
  • Automatic mileage tracking
  • Send invoices on the go
  • Quarterly estimated taxes calculation
  • Integration with your bank accounts


Here are the features that Quickbooks Self-Employed does NOT include:

  • You can't reconcile your bank accounts. Well, you can reconcile them by hand, but you can't do the reconciliation in Quickbooks like you can in the other versions. 
  • You can't categorize where your income is coming from or what your expenses are. If you have more than 1 income stream, you most likely want to know where this money is coming from, but this version you can't do that. And the same thing goes for your expenses. I really like to know the different categories that my expenses are in, instead of just the total amount that I spent for the month. 
  • You can't customize the invoices. 
  • There are no additional reports than just the Profit and Loss report, but it's a very simply report.

If it were up to me, I'd definitely pick a different version of Quickbooks than Quickbooks Self-Employed.

Quickbooks Simple Start

Intuit has a suite of 4 different versions of Quickbooks Online that you can use for your business. Everyone can always start with the Simple Start version and upgrade over time as you need to. 


All of these versions in this suite will sync with your bank account, as well as other third party apps that you may be using in your business. You can also snap photos of your receipts with your phone and link those photos to your expenses in Quickbooks. 


Here are the features in Simple Start
  • Customizable digital invoices: you can brand the invoices to your business and also decide which fields you don't want shown on the invoice when it is sent to your clients. 
  • Send reminders for overdue invoices. 
  • Send estimates to your clients so they can approve or reject your estimates. 
  • Reconciliation: you can reconcile the bank accounts and credit cards that you use in your business to make sure that everything is accounted for in your bookkeeping and you aren't reporting anything twice. 
  • Track your 1099 contractors: At the end of each year, you should be sending a 1099 to any contractor that does work for you in your business that you have paid more than $600 to during the year. By tracking them here, you can easily print the paperwork that is needed to able to issue those 1099s (or have your accountant issue them). 
  • Customize your categories. Unlike in the Self-Employed version, here you can customize them. You can name all of your different income streams and see where your money is coming from. You can categorize your expenses and see where you are really spending your money in your business each month. 
  • Import any data from Quickbooks Desktop: if you or your accountant has been using Quickbooks Desktop version before Quickbooks Online, you can easily import the data into your new account and have all of your historical data to compare your business going forward.
Quickbooks Simple Start is for everyone. As you need to upgrade your account over time, you can easily upgrade and get even more features that are included in the other versions. 
Here is what is not included with Quickbooks Simple Start
  • Automatic recurring invoices
  • Recurring transactions
  • Advanced invoice fields: you cannot add custom fields like a job name or project name
  • No native time-tracking
  • Billable expenses: if you pay expenses on behalf of your client, you can't set up an automatic invoice to send to them to reimburse you
  • Vendor bills


As an online business owner, Quickbooks Simple Start has everything you need to run your business. You usually send your invoices and even accept your payments through other methods than Quickbooks. So this version of Quickbooks does everything that you need it to do. 

Quickbooks Essentials

This is the next version in the suite of Quickbooks products. 


The features that are included of this version are: 
  • Everything from the Simple Start version
  • Recurring invoices
  • Recurring transactions
  • Custom invoice fields
  • Vendor bills
  • Multiple currencies: If you do process multiple currencies, this version is great for you. But most of the time, your bank account and PayPal will convert these different currencies for you before they get to Quickbooks. 
  • Time Tracking
  • Can have up to 3 users with different logins
This version is for you if you have recurring invoices or recurring transactions. But like I said above for inventory management, most of my clients use systems outside of Quickbooks for their recurring transactions from their clients. So if you have no plans of using Quickbooks or recurring invoices to your clients, then this version is not something you are going to want to purchase. 
What's not included in Quickbooks Essentials
  • Inventory management: for all of the small businesses that I have dealt with (and most of the people that will read this blog post), you don't have any physical inventory, so this feature doesn't even matter!
  • Reimbursable expenses
  • Track Project Profitability

Quickbooks Plus

This is the next version in the suite of Quickbooks products for your small business. 


Here are the features in this version: 
  • Everything in the Simple Start and Essentials versions
  • Track Project Profitability
  • Track inventory
  • Can have up to 5 users with different logins

Quickbooks Advanced

This is the last version in the suite of Quickbooks products.


Here are the features in this version:

  • Everything in the Simple Start, Essentials and Plus versions
  • Can have up to 25 users that you can also customize the user permissions
  • Track your business performance through customizable performance reports with visuals and measure profitability, cash flow and other key performance indicators
  • Accelerated invoicing - duplicate similar invoices for multiple customers
  • You get a dedicated support manager from Intuit

In all of these versions, there are going to be bells and whistles that you think you may need. But for doing your business bookkeeping and reporting, you really don't need all of these features that are included in all of the versions. 

choosing best version of quickbooks for your small business


As long as you start with the Simple Start version, you can easily upgrade as your business grows and you need more features that are included in a different version. 


Note: Whenever I get asked which version is the best for small business owners who have an online only business, I always respond with the Simple Start version. It has everything that you need to run your business and do your bookkeeping for your small business.

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About the Author Clarissa

Clarissa Wilson is a financial strategist and online educator who holds two master’s degrees in Forensic Accounting. Also creative and spiritual, she is an intuitive empath and introvert. Clarissa is the host of The Prosper + Profit Podcast, where money conversations occur on a daily basis -- as she believes that money shouldn’t be a taboo subject. After growing up on a dairy farmand learning to work hard for money, Clarissa awakened to a path that allowed wealth to flow easily to her. Clarissa currently lives in Pennsylvania with her two cats.

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