Revised: 5 April 2012
A QuickBooks hosting service or QuickBooks Online...which should I choose?
by: Mark Wilsdorf
Flagship Technologies, Inc.
Preface: Each year Intuit releases new editions of
QuickBooks, and the features offered in the various editions usually get shuffled around a bit. A
particular reporting feature available only in QuickBooks Premier
last year might be included in QuickBooks Pro this year. In fact, the mix of features offered in different editions changes so
frequently that it's difficult to stay ahead of them, year to year.
I tell you this to emphasize that the purpose of this article
is to describe general product differences. It is not
intended as an up-to-the-minute listing of current features of the
various QuickBooks editions. Where feature differences are mentioned,
understand that the
information here may not necessarily be current, particularly if it's been a while since this article's
most recent revision date (shown at the top of this page). For specific feature comparisons
of current QuickBooks editions, I suggest you go directly to its Web
site: www.QuickBooks.com, or
call Intuit at 800-4-INTUIT.
If you've chosen to use QuickBooks
as your accounting system, there's at least one more decision to
make: will you use a desktop installation of
QuickBooks program is installed on your own computer or network--or
an online version, in which case QuickBooks is installed on a server
computer somewhere on the Internet?
Even if you've
been using QuickBooks on the desktop for years, there are advantages (and
disadvantages) worth considering, for accessing QuickBooks online. That's the purpose of this article: we'll take a brief look
at what's involved in using QuickBooks via an Internet connection,
what your options are for online access, and hopefully shed enough
light on the pros and cons of the options available to you, to help you make
an informed decision.
Note: this is a companion article to: Do I need Quicken or QuickBooks? QuickBooks Pro or
Premier? An Online version or hosted access?, found here: http://www.goflagship.com/articles/ckgen1.htm.
A quick update note (5 April 2012):
originally wrote this article I was not convinced Intuit
had a sincere, long-run commitment to QuickBooks Online (QBOL),
and my comments below reflect that opinion. Since then
however, I've seen evidence of a renewed commitment from
Intuit to QBOL in the form of several improvements.
OBOL is still a considerably different product from the
desktop versions of QuickBooks, and has lesser capabilities
in some areas; however, a number of features have been
improved or enhanced, making it a more viable alternative
to the desktop versions (hosted or not). Someday I'll do a
full rewrite of this article to explain the changes. For
now, just understand that I'm "less negative"
with respect to QBOL.
For a good overview on recent QBOL
changes/improvements see Stacy Kildal's blog article, Have You Used QuickBooks Online Lately?
What is QuickBooks hosting?
A software application's host
is the computer where that
software is executed or "run". The term generally
applies to software running on a network of some kind: you may
be accessing (using or operating) the application from your computer
but it's actually running on another computer somewhere across the
network. That other computer is
referred to as a server
in this case, because it is
"serving" the software or data to your computer.
hosting you can pay a company--a hosting
service--a monthly fee to maintain a copy of a
desktop edition of QuickBooks on their server and give you access
to it from across the Internet. Your QuickBooks data is secured from unauthorized
access, by the fact that anyone using it must log into your area (folder or directory) on the
hosting company's server, using your private user ID and password.
With hosting, you can use QuickBooks almost exactly as if it were
installed on your computer. But you're really using it across a
network: the Internet is the network that provides
the connection between your computer and the server.
How do you find vendors of QuickBooks hosting services? Intuit
maintains a list of certified Commercial hosts on its Web site. Go to www.quickbooks.com/franchisesolutions,
then click on Intuit Hosting Program.
How application hosting works
Online hosting is a possibility for many
software applications, not just QuickBooks. While there are minor differences in
the way hosting vendors provide access to an application, here
are the basics.
Choose a hosting service. Hundreds of companies provide hosting services, so they're
easy to find. Only a handful are certified to host
QuickBooks though. (See Intuit's list, mentioned above.)
Purchase or lease a license for the software
you'll be using via hosting. If you already have a license (for
example, a license for a desktop version of QuickBooks) that will usually be
fine. In some cases you'll be able to lease a software
license, paying a monthly or annual fee instead of buying the software up
Sign up for an account with the hosting service. You'll
provide them with your software license information (or agree to
rent licenses), payment details, and so on, and you'll be given
the account information necessary for accessing your assigned
file folder area on their server--a user ID and password,
connection instructions, etc.
(Sometimes) provide the installer for your
software to the hosting service. You may or may not need to do
this for QuickBooks-- the hosting service may already your
version of have QuickBooks available to install. But if you want to use a
add-on with QuickBooks, you'll likely may have to send them the installer for
that software...unless they allow you to
install the software yourself, via your hosting connection.
Log in to your account, and you
should be ready to get to
What is QuickBooks Online (QBOL)?
Online--let's call it QBOL--is a version of QuickBooks designed
for access over the Internet. (It's from Intuit,
the developer of all QuickBooks software products.) QBOL has features
nearly identical to desktop editions, with slight
differences here and there.
Signing up for a QBOL account and paying Intuit a monthly
subscription fee gets you access to QBOL, where you can enter
transactions, add customers and vendors, get reports, and so on--similar
to the things you can do in a desktop edition of
QuickBooks. QBOL "runs" inside any Web browser, like
Internet Explorer, Firefox, or Google Chrome. So you can access your QuickBooks
essentially any computer with an Internet connection.
Like any online service which stores private data,
your QuickBooks data is protected from unauthorized access by the
fact that you must log in to the QBOL server using your personal
account information (user ID and password).
By the way, the term "hosting service" also
applies to Intuit, because QBOL is hosted on their servers (Intuit is
the only source for it). Intuit does not currently offer hosting
for desktop editions of QuickBooks.
Why would anyone want
to use QuickBooks via the Internet?
Working with QuickBooks across an
Internet connection may appear to make little sense at first. It
typically involves fees of $20 to $50 or more per month, which you could avoid by just installing
QuickBooks on your own computer. But there are a number
of advantages, so let's take a look at some of them.
Access to QuickBooks from
anywhere. You'll have the ability to access your accounting records,
enter transactions, print reports, and so on, from virtually anywhere--anywhere
there's a computer
connected to the Internet, that is.
Multi-user access. You can be at home, and your employees or a
partner can be at the office or in another city, and all of
you can be working in QuickBooks. All that each of you needs is a computer, an Internet
connection, and the account information required for logging in to
your online QuickBooks account.
Reduced hardware costs
(sometimes). Small businesses who need to give more
employees access to QuickBooks may be able to avoid spending to
expand their network--and the time and costs involved in
maintaining a larger network--because the Internet "is"
the network when you access QuickBooks online. Small businesses
which aren't networked may be able to do without setting up a
network altogether, or at least postpone that expense for a while.
Reduced software maintenance costs.
When someone else hosts QuickBooks you avoid the time and effort
involved in (1) installing QuickBooks, (2) applying QuickBooks
software updates, (3) solving software problems that may crop up
such as having to re-install QuickBooks due to a hard drive crash
or a corrupted program file. You can "wash your hands"
of those jobs, because they become the responsibility of
the hosting provider--whether that is Intuit or a third-party
Daily backups. Every hosting
service I know of provides at least daily backups of your data. If
you're like most people--who don't get backups made as frequently
as they should be--having someone else responsible for
making and keeping multiple sets of daily backups would be a
significant boost in the security of your accounting data. Or if
you are someone who is diligent about making backups, having
someone else do it should save you time.
Professional software support.
Something not working right? ...Can't access QuickBooks? ...then
email or call the hosting provider. Part of what you're paying
them for is access to their support personnel who can solve
problems with the software or access your account, can restore data from
backups for you, and such.
Lower up-front cost. Both QBOL
and QuickBooks hosting with a leased QuickBooks license (discussed
later) are "pay as you go" plans. Instead of
purchasing a copy of QuickBooks you just pay a monthly fee.
Risks and trade-offs
Around every silver lining, somewhere there's a cloud: using QuickBooks via
an Internet connection is not without some trade-offs. Whenever
you put something as sensitive and mission-critical as your accounting
data on a public server, additional risks are involved--risks
which, in fact, are shared by nearly all forms of "computing in
- Cost. I've already mentioned that using an online version
of QuickBooks can be expensive. Those monthly fees add up in a
hurry, making online access typically more expensive than installing
and using QuickBooks on your own computer or network. Any technology that has
significant potential benefits usually involves significant costs.
- Speed. Using QuickBooks over an
Internet connection can be a bit sluggish, though not always. Speed of your
Internet connection, time of day, and other factors are involved, but a
desktop installation of QuickBooks will always be fastest.
Using QuickBooks via a hosting service can be surprisingly fast, because
the hosting software is based on technologies (Citrix or Windows Terminal Server)
optimized for speed in delivering programs over a remote (Internet)
connection. QBOL is usually much slower because it operates within your Web
the same speed as any other Web page.
- Data access security. Let's face it, security is never
perfect. Your own computer or network may not be as secure as you
would wish, and probably is not secure as you think it is.
But at least with your own system you are in control: you can
limit access to trusted employees or partners, you control who has
access to data backups, and so on. For most small businesses, even
if your computer or network were victimized by mal-ware or a cyber
attack, the likelihood that the hacker would specifically target
your QuickBooks accounting data is very small.
Contrast that situation with having hundreds or thousands of
QuickBooks company files hosted on single publicly accessible
server, by either QBOL or a hosting service. Though high-grade
security measures should be in place to protect your data,
all you can really do is hope and trust that the service provider
has implemented the level of security they claim.
Where does data theft occur most?
Percentage wise, almost no
identity thefts occur from computers operated by "mom and
pop" businesses. The big losses occur more on publicly
accessible servers operated by large businesses--banks, credit
card companies, large retailers--where a successful hack can
yield hundreds of thousands of sets of address and credit card
Computer systems storing hundreds of thousands of
customer records in a single large database are a much more
tantalizing target for data thieves than are the computers in a
typical small business where only a few hundred customer
records are likely to be found.
- Data loss protection. Once your data
is hosted "somewhere in the cloud" you may give up direct control over protecting it from
loss, though that isn't always so. Usually you have to trust
that the hosting provider is performing daily data backups as they
claim to be. If you use a QuickBooks hosting service you should be
allowed to download a backup of your QuickBooks data to store locally,
giving your some additional protection. With QBOL, you can export
your online data to have a copy on your local PC or elsewhere. (Note
that because QBOL's features are not identical to desktop editions,
data exported from QBOL is not 100% compatible if you should need to
load it into a desktop copy QuickBooks. Still, most of your
important data will be intact.)
Accessibility of your programs and data. If your hosting
provider's servers go down (aren't accessible due to
malfunction, etc.) or your local
Internet connection goes down, you cannot access QuickBooks. Most
hosts have systems in place (server redundancy, hard drive
mirroring, backup power systems) to minimize the length of outages,
but they do occur. Vendors have different track records for outages,
so choosing the right vendor helps in this regard. If the potential
for a day-long
server outage sounds scary, think back to the most recent outage
you've had with your own computer or network: it's not uncommon
for users to be without their computers for a day or more
due to a virus, a hardware crash, or other problem. The difference
is that with your data hosted by someone else, you have no
suggesting here is that professionally-run hosting service may be no
less reliable in terms of uptime than are the computer systems of individual users and small
"Cloud computing" and QuickBooks
You've no doubt heard the phrase
"cloud computing" thrown around a lot, and may or may
not understand what it means. Basically the "cloud"
simply means the Internet--or all of the computers connected to
the Internet. Nothing new there.
What is new, and is the
central concept behind "cloud computing", is the idea
that instead of installing and running software on your own
computer, you can access and run software installed on someone
else's server computer, somewhere across the Internet. For
that, you pay the company which operates the server a fee,
usually on a monthly subscription basis.
Paying someone to host a desktop
edition of QuickBooks is actually about as "plain
vanilla" as you can get. The bigger idea involved in cloud
computing--and where even greater benefits are
possible--revolves around the concept of Software As A Service
SAAS refers to
purchasing various kinds of software and data access services from a
variety of different vendors. Each vendor's server will
typically be independent of that of other vendors you buy
services from, and of course their servers may be located
anywhere on the Internet. The "holy grail" of the
SAAS idea is to have data and programs residing on one vendor's
server be compatible with those of other vendors, so that you
can just buy services from whichever vendors appear to
offer what you need, at the best price.
An example will illustrate
this better. Suppose you pay one vendor to host your
customer database, and you want to hire another vendor to send
out a promotional mailing to part of your customer list. So
long as the mailing services vendor can access data in a format
provided by the database hosting vendor, you should be able to
purchase those two kinds of services (data storage, and
mailing) from two independent vendors.
And suppose that next month you
find out about a different mailing service that can provide the
same services for 10% less than what you're paying now.
Again, so long as this third vendor can accept data in a
format provided by your database hosting vendor, you can switch
to the new mailing service quite easily. What's different about
the SAAS model as compared with the desktop computing model*
is that you aren't locked into using a
particular service or software, because you have no fixed investment in
a particular software package--you're just paying monthly for
the services you need. (Because of differential pricing arrangements and marketing
tactics it doesn't always work that way, but that's the
theory at least.)
A number of SAAS products have been developed
for QuickBooks--both desktop editions and QBOL--and more are on the way.Visit the Intuit App Center ( http://appcenter.intuit.com
) to see what's available.
"desktop computing model" involves purchasing,
installing, and operating a software product on your
own computer...and sometimes feeling "locked in" to
using that software package because of how much you
paid for it up front. But cloud computing isn't simply a
"bed of roses without thorns", and the desktop model
still has greater advantages in some situations. It all depends
on your computing/software needs and the different options
available to you for desktop vs. online software and data
QuickBooks hosting: things to consider...
Features of different vendors' QuickBooks hosting services vary. Here are a few things to consider or ask about when comparing
- Which type of host, Commercial or Self? These two types
of QuickBooks hosts are defined by Intuit.
Commercial hosts undergo a rigorous
certification process, while Self hosts do not. The Self hosting
program is designed so that QuickBooks
Pro Advisors and QuickBooks
Solution Providers may provide hosting services
to their clients. For instance if your CPA or tax preparer is a
certified QuickBooks Pro Advisor, he or she could provide hosting
services to you and to other clients.
There's nothing particularly "good" or "bad"
about either type of host. Commercial hosts tend to offer a
broader range of hosting-related services--they might be willing to host many
different kinds of software products for you, such as the
Microsoft Office suite. And because they are certified by Intuit
they may offer better data security and safeguards against data loss,
and a higher level of support for their customers...but there's no guarantee of
Self hosts may perform just as well in these areas, though without
certification the quality of the services they provide is likely
to be more variable. But if you trust a
CPA firm to do your taxes, you'll likely be comfortable
with trusting them to host your QuickBooks data as well. And because their business relationship with you is based on more than
just providing hosting services--they provide accounting services
and advisement--Self hosts are likely to offer
additional, unique services which Commercial hosts do not. For
instance a CPA firm might offer data entry services (say, entering QuickBooks
transactions from paper sales tickets each week),
monthly reconciliation and reporting, or other services based on
having easy access to your QuickBooks data files and accounting records.
- Capacity. Hosting plans can vary in the amount of disk
space, memory, and Internet traffic provided. Generally, more is
better in all of these areas, but there's no reason to
purchase a more expensive plan if you don't need it. Most vendors
will let you start with a lower-cost plan, then upgrade to a
higher-capacity plan later if
- Uptime. Ask how
frequently their servers are down for any reason, and what their
longest server outage has been in the past year. Some can supply
you with a detailed uptime report, and their service agreement may
even guarantee a minimum level of uptime (percentage of the time
you'll be able to access your data on their servers).
- Server redundancy, mirroring, disaster recovery. If the server which is hosting your
QuickBooks account goes offline (their computers crash too!),
do they have a redundant server that will be switched to
automatically or within a short while? Does their storage system
use mirroring? Mirroring means that every change you
make--every QuickBooks transaction--is automatically duplicated on
at least one additional hard drive, so if the primary hard drive
develops problems, a mirrored drive can be switched to with little
or no loss of data. What is their disaster recovery plan in case
their data center is hit by a tornado, fire, flood, or long power
If timely access to your accounting data
is crucial--maybe you enter and print invoices while the customer
is standing there in front of you at the sales counter--then it's
worth paying more for hosting services that offer server redundancy,
mirroring, and guaranteed uptime.
- Backup frequency, retention, offsite backups. Every
hosting vendor I know of provides at least daily data backups as part of their hosting
plan. If the vendor also offers mirroring (see above) that's even
better: if there's a server or data problem you may only
lose the previous couple accounting entries rather than an entire
day's worth. How long do they keep backups? If you
have a major data or accounting error that calls for restoring
your data file to its state as of three weeks ago, will it
be available? Ninety days is adequate for most situations,
but longer is always better. Do they
keep backup sets at multiple physical locations (different sites).
Having backups at at least two locations is critical for
protecting your valuable accounting data from loss.
Keep your own backups, too
Because you'll be running a desktop edition of
QuickBooks, you should have the option
of creating your own QuickBooks data backups and/or copying
them from the host computer to your own computer. That's something you should do
periodically--once a month is good; more often if you have high
daily transaction volume or your hosting provider doesn't have
multiple backup locations.
Despite any hosting provider's contractual responsibility or
good intentions for protecting your data, there's no
substitute for having your own copy of
your accounting data in your personal possession.
- Owned vs. leased licenses. As I said earlier, the hosting service
will be giving you access to a desktop edition of
QuickBooks. But Intuit doesn't give away free access to their
software: you have to use a licensed copy...somebody has to
pay for that!
If you already own a copy of QuickBooks, you can provide your
QuickBooks license information to the hosting company and they can legally install
that version of QuickBooks in
your area of their server. If your license is for QuickBooks 2010
Pro, that's what they will provide.
If you don't own a copy of QuickBooks or want to use a newer
version, some hosts give you the option of using a leased
license. They'll install a current, licensed copy of QuickBooks
in your area of their server, and you'll pay an additional monthly
fee for using it. The cost may be roughly $10 - $30 per month depending on
version you are leasing and whether you want access to
features like payroll. Leased licenses aren't cheap, but their
cost needs to be weighed against:
- The flexibility of not having a fixed investment in software. You could try QuickBooks for a couple
months, then decide it's not for you and switch to some other
- Avoidance of software upgrade costs. A leased license
always gives you access to the most current version of
QuickBooks. If you own a QuickBooks license though, you'll have
to pay Intuit's fee if you want to upgrade annually. (It's worth
noting that many users of desktop editions of QuickBooks don't
upgrade every year. So the amount saved will vary, depending on
how often you would normally upgrade your QuickBooks license.)
- Cash flow benefits. Obviously, paying by the month is
easier on cash flow than the larger up-front cost of buying a
- Setup fees. Some vendors charge setup fees. That's
understandable, because there's work involved in getting your account set up,
verifying your software licenses, and installing
software that you provide to them. But high setup fees are at
least partly about deterring you
to a different vendor (because of the amount you already have
"invested"). Just be sure you know what the setup fees
are before you sign a service agreement or provide your credit
- Monthly service fee. There's a wide range here, so compare
several vendors' prices. Fees start in the range of $25 to $50
per month but can be much higher. When comparing vendors, be sure
you understand what you're actually getting: a higher-priced
hosting service may be offering a higher level of service or data
- Software add-ons hosting. Many hosting vendors will also
host any QuickBooks add-on software you use, such as my
company's products (sorry, I couldn't resist including just one little "commercial").
Be sure to ask what their policies and limitations are for
installing and hosting your add-ons on their server. That's true
even if you don't yet use any QuickBooks add-ons, because someday
you may want to.
- Is a free trial available? Many vendors will let you try
their hosting service for free for up to 30 days. If you need a
QuickBooks leased license during the free trial though, you may
have to pay a fee for that.
If you want details on QuickBooks hosting programs from Intuit's perspective, have a look at
Hosting Program FAQ.
QBOL: things to consider...
With QBOL there's no need to compare services offered by different
vendors, because Intuit is the only provider! Only a few different
- Monthly fee. Several QBOL service plans are
from minimal (Simple Start) to full featured (Online Plus), and with
or without payroll capability. (Payroll is an extra-fee feature in
QBOL, but the same is true of desktop editions). As this is written,
the plans range in price
from $12.95 to $78.95 per month. On the lower end, especially, QBOL is
less expensive than using a hosted version of QuickBooks.
- Number of simultaneous users. QBOL service plans allow
different numbers of simultaneous users, currently ranging from 1 user
for the lowest-priced plan to 5 users for higher-priced plans.
- Is a free trial available? Yes. You can try any of the QBOL
editions free for 30 days.
I won't spend time talking about data security, backups, etc. here.
The same considerations as I described for hosting services apply to
QBOL, so review that discussion for ideas about questions to ask if you
consider signing up for QBOL.
Pros and cons
Now you've gotten to the part of this article that's
mostly opinion--mine, of course. By this point you're probably eager
to hear somebody's opinion, to help cut through the clutter of
possibilities you face for online access to QuickBooks. So I offer my
opinions hoping they'll shed some light on the range of
specifications, alternatives, and hype you'll encounter as you decide
what's right for you.
First, understand that using a desktop version of
QuickBooks on your own computer or network is still the fastest, most
convenient, and most viable alternative for the bulk of QuickBooks
users. It also offers the best benefit/cost ratio (biggest bang for
the buck) for the way most businesses currently want to use
QuickBooks. But if your business can gain real benefits from accessing
QuickBooks across an Internet connection--and many can--then the monthly fee for
QBOL or a hosted QuickBooks solution may be well worth the added cost.
Next, I need to tell you up front that I'm not a fan
of QBOL. But let's start with a look at its positive points, then I'll
finish up with its negatives and reasons why I feel QuickBooks hosting
is usually a better choice.
First the positive...
Intuit doesn't publish sales figures so we can't know the
number of subscriptions they currently have for QBOL. Most people in the industry
will tell you that desktop editions still represents the lion's share of Intuit's QuickBooks
customer base and new sales. But QBOL has been around for several
years and some estimates put its subscription base at over 300,000.
That user count alone should answer the basic question, "Is QBOL a viable and useable system?"
with an absolute "Yes!". Here are some of the other positive
Simultaneous users. With QBOL the number of
simultaneous users permitted is built into the monthly fee. Because
QuickBooks hosting is based on
desktop editions of QuickBooks, you must buy a license for each additional
user you want to allow.
This can make QBOL's pricing a bit more attractive in some multi-user
Smartphone access. QBOL may have slight an edge in accessibility
when using "any" smartphone or similar device because it works through any Web browser. However
the advantage is slight, because most hosting solutions also support
access by the major smartphone operating systems. Many of the
smartphone apps in Intuit's App Center (see the next item below)
also work with QBOL.
Support by many cloud-based "apps".
The Intuit App Center (appcenter.intuit.com)
is the best place to find cloud-based applications for QuickBooks,
and many of them support QBOL.
SDK-based QuickBooks add-on programs. QBOL
works with many QuickBooks add-ons developed using the QuickBooks
SDK, though not all. (QBOL requires an approach to accessing data
that is slightly different from that used for desktop editions, and
also has some data format differences, so
not all developers undertake the extra programming required to make
their applications compatible with QBOL.) If you currently use a
QuickBooks add-on and want to switch to QBOL, chances are good that
you may be able to continue using that add-on with QBOL (but check first
to be sure).
What is the QuickBooks SDK?
SDK stands for "Software Development
Kit". It is software created by Intuit which allows
third-party programs to send and receive data to/from
QuickBooks. Before Intuit published the SDK, in 2002, developers
had no easy way to integrate their programs with QuickBooks.
In recent years Intuit has released something
called the Intuit Partner Platform, a system which allows
development of cloud-based apps which connect with QBOL and
desktop editions of QuickBooks.
OK for new or inexperienced QuickBooks users?
features are more limited than those offered by desktop editions,
and it implements some features differently. For these reasons,
people experienced with the desktop editions are less likely to like
QBOL. But those who haven't used a desktop edition of QuickBooks won't notice that
anything is missing, and are more likely to be happy with QBOL.
Now for the negative...
At least part of QBOL's deficiencies relate to its history. It was Intuit's first attempt at
online delivery of any QuickBooks
accounting product. At the time QBOL was being developed and when it
was first released, the technology for hosting desktop versions of
software existed but was still in need of improvement--it hadn't fully
"jelled" yet, at least not in the form that it exists today. Maybe more
important, it wasn't yet in vogue as part of the
information technology (IT) industry's view of what the
Internet's future would look like.
But things change rapidly in IT. As more and more
users began getting faster Internet connections, software which once
seemed to slow to use across an Internet connection suddenly became
fast enough for serious work.
That's exactly what has made hosted desktop
viable and appealing. Now hosted copies of QuickBooks, Microsoft Word,
Microsoft Excel, and many other programs has almost the same feel as
installing and using those programs on your own
So where did this leave QBOL? It was, and continues to be, a slower,
half-baked implementation of what every user of a desktop edition of QuickBooks experiences
daily. Here's my list of QBOL negatives:
- Missing/changed features. Payroll works differently. Sales tax-related features are not as
complete as in the desktop editions. In general, experienced users of
desktop editions will see QBOL as missing some features they expect to
- Anomalies...bugs or "features"? While all software
can have bugs, QBOL seems to have a larger than usual list of problems
than the desktop editions: Some reports don't work reliably.
Account reconciliation can fail. It's possible to delete an account
from the Chart of Accounts even if that account has been used in
transactions (something that should never be possible!). By the time
your read this, these may all be fixed. But then again, though QBOL
has been around for years Intuit seems to have been tardy or lazy
about paring down QBOL's list
of problems to an acceptably small size.
- Speed of access (a lack of it). QBOL is usually much slower than using a hosting edition of
Less efficient user interface (UI). Anyone familiar with desktop
QuickBooks editions is accustomed to shortcut keystrokes, right-click menus,
cursors that change shape, etc.--things that speed up program
operation and contribute to ease of use. Since QBOL relies on the UI
features available in a Web browser, it has not been written to
support the same UI features found in the desktop editions--the Web
browser acts like a layer of insulation that prevents experienced
QuickBooks users from having many of the little ease-of-use features
they're accustomed to.
A program's user interface (UI) is
the set of features it offers which (1) let you control and work
with the program and your data, and (2) provide you with
about what's going on in the program--usually in the form of
data windows, pop-up informational dialogs, and so
Desktop editions of QuickBooks have a
"rich" user interface, with lots of keyboard and mouse
commands, standard and context (right-click) menus, pop-up
windows and dialogs, and so on.
QBOL's user interface is constrained by the fact that
it operates in a Web browser. This could improve over time, as common
programming languages for describing Web pages become more robust and more
ubiquitous (HTML5, for instance). For now though, QBOL's user interface is behind
that of desktop QuickBooks editions in ease and speed of use.
- Server outages. Intuit's record for server outages is
abysmal. In 2010 and 2011 they had two outages which each lasted more
than a day, as well as several multi-hour outages. Any
hosting company with that kind of record would quickly lose customers to
their competition. Few businesses will accept repeatedly
being unable to perform normal daily business activities like enter
or pay bills, look up customer information to answer billing and
invoicing questions, or access other critical accounting records.
Intuit has released public statements giving reasons for some of
the outages, but as QuickBooks consultant Scott
Gregory notes, the reason "really doesn't matter to the
thousands of businesses that didn't have the ability to 'work
anytime, anywhere' as the QuickBooks web site touts."
The biggest concern is not that these outages happened, but that
Intuit apparently doesn't have its data center set up to prevent or
at least minimize them. Well-designed data centers have redundant
servers or at least redundant data storage, also known as mirroring.
As described earlier, mirroring means that an identical copy of everything written to a computer's storage system also gets written to one or more additional
hard drives. And a redundant server is simply a backup computer ready to be
brought online if there's a failure in any of the servers that are
currently online. (The switch to a backup server may happen
automatically when a fault is detected by monitoring software; or it
may be done manually, but in any case it should occur in a short
- Data portability. Once you are on QBOL it is now possible
your QuickBooks records back into a file that's readable by a desktop
edition of QuickBooks. (Until recently, even this wasn't possible.)
But QBOL's differences from desktop editions mean you cannot freely
move data back and forth between desktop editions and QBOL. So the
data backup you create by exporting your QBOL data is more for peace
of mind than anything else. In a true emergency, you'd be able to
import your transactions and lists into a desktop edition; there
would be some loss of information, but most of the data would be
Fewer SDK-based QuickBooks add-ons. I
mentioned this earlier: not all SDK-based add-ons support QBOL. It all
depends on whether the add-on's developer decided to make it
compatible with QBOL or not.
Not widely recommended by accounting
professionals. Assemble any random group of QuickBooks Professional
Advisors in a room and ask for a show of hands to indicate how many
of them recommend QBOL to their clients, and probably fewer than
one-fourth of them will raise their hands. This is not to say that
they won't provide support to a client who uses QBOL, just
that most of them avoid getting clients started on QBOL.
Why? Because most are aware of the QBOL problems I've mentioned
here, and many have experienced the frustration of dealing with
those problems first hand.
QuickBooks licenses: pay by the month, or not? In most
situations, owning a QuickBooks license is more cost effective than
paying the monthly fee for QBOL or for a leased QuickBooks license
(provided through a hosting service). Before you get too thrilled at
the prospect of paying "just a little bit" each month,
multiply the monthly fee by 12 to consider how much it will cost per
year--it'll be a little more scary when you look at the total annual
cost. With QBOL you can't avoid paying by the month, because that's
the only way it is offered. But if you choose to use a QuickBooks
hosting service, purchasing a QuickBooks license may be the best way
Of course, using QuickBooks on a pay-as-you-go plan can make
good business sense in the right situation. But for that to be true the added flexibility,
avoidance of upgrade fees, and easier cash flow management (all
described elsewhere in this article) have to produce real value--benefits
that improve your profitability. I believe many people overestimate
the value of these benefits out of laziness: making monthly payments is easy and
When you have a choice between pay-as-you-go
software pricing and the higher up-front cost of buying a software
license, buying a license will usually cost less in the long run. This
statement cannot really be generalized across all types of software; however, it's
often true for
mass-market products like QuickBooks.
So when is paying monthly for software licenses the better
choice? Usually it's best as a short-run strategy in the face of
uncertainty. If you are not sure you will stay with QuickBooks and
just want to try it for a few months, by all means consider a leased
license--you can always buy a QuickBooks license later, once you're
sure. Or if cash flow is especially tight, it may make sense to make
monthly payments now and buy a license sometime in the future.
And now, the crystal ball stuff...
If the section above is mostly my opinion, this one
is even worse: it contains not just my opinions but also my predictions
about a few things. (Run away! Save yourself!)
QBOL and hosted QuickBooks are
"cloud-based" solutions: they are software services
(programs) hosted on
someone else's computer somewhere on the Internet. But at this point
QBOL is not especially well implemented or managed; QuickBooks hosting
seems to be the faster, more full-featured, and more reliable choice.
My personal feeling is that, over time, QuickBooks
Online will change. (Wow, is this guy bright or what? He's
predicting that things will change!) More specifically, I mean that one of two things
is likely. Either: (1) QBOL
will be enhanced to the point of being equal to desktop editions--which
would only be possible with a significant rewrite or upgrade of the
improvements in Intuit's data center, etc.-- or
(2) there will be enough growth in hosted access to desktop
editions of QuickBooks that QBOL will eventually fade away.
At this point I believe the second event is more likely. By "fade away" I mean Intuit will starve QBOL for
development resources, and that will cause the slow demise of QBOL.
With a slowdown in the release of QBOL fixes and new features, other accounting software
choices will grow ever more appealing. The eventual result would be a
slow erosion in QBOL's user base, as most leave in favor of other
products, including hosted desktop editions of QuickBooks.
As with any new technology, there's a lot of money to
be made at this early stage in the push toward cloud computing. And
where there's money to be made by competing products or ideas there's bound
to be some hype generated. The goal of it is to increase revenue by getting
consumers to discard their "old" technology and spend big on
the new one; in this case, the hype involves telling everyone that
cloud computing is "the next big thing" and it's "what everyone
will be using soon...don't miss the boat!"
The truth is that
cloud computing is like any other technology or tool: it's an
improvement for some kinds of jobs, and for others it is either
too costly, or a poor fit, or has other negatives like the data
security vulnerabilities I've mentioned. With this in mind my final
prediction is that QuickBooks will continue to thrive as a desktop and
local-network computing product. The growth in QuickBooks hosting (of
desktop editions) makes that view of QuickBooks' near future
even more secure.
For more information
Have questions or want to discuss points from this article? Visit
our user forums and post your question or topic there, and
let's talk about it.
For detailed information on QuickBooks features,
versions, and pricing, visit www.QuickBooks.com.
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