Pros & Cons of QuickBooks Online: All You Need to Know

As a small business owner, you may have heard about QuickBooks Online when researching the best small business accounting software. It has robust accounting, invoicing, inventory management tools, and other features and is known by many accountants and bookkeepers. However, QuickBooks Online has disadvantages, including its pricing and user limits per account.

This guide will discuss QuickBooks’ pros and cons in depth, giving you all you need to know when considering it for your small—to medium-sized business. We’ll also discuss its pricing, features, and some robust alternatives to QuickBooks Online.

Read on to learn more.

Key Advantages of QuickBooks Online

Robust Core Accounting Features

Unlike other accounting software, QuickBooks Online offers various features to streamline your accounting tasks, like bookkeeping, invoicing, financial reports, bank reconciliation, expense tracking, etc. Here are some of its best core tools:

Bookkeeping and Detailed Accounting Reports – QuickBooks Online lets you record and track business expenses accurately, allowing you to add expense categories and insert attachments, memos, and reference numbers. It also allows you to close books at year-end to prevent modifications to your financial data.

Note: QuickBooks Online doesn’t use intelligent data capture for its receipt scanning feature, which makes your pre-accounting process less efficient. For a more robust solution for tracking expenses, try Envoice. It has SmartExtract and ExactExtract backed by Human-in-the-loop review for automating data extraction tasks, eliminating manual data entry, and ensuring 99.9% accuracy of extracted data. Sign up for a free trial now.

As for accounting report generation, QuickBooks offers different built-in reports, such as balance sheets, income statements, profit-and-loss statements, and trial balance reports. It allows you to create custom reports to track business performance and quickly get needed insights.

QuickBooks Online also offers advanced features for job costing and project budget forecasting and oversight, helping business owners track project profitability and plan for future projects. You can also create automated workflows for payment reminders and facilitate recurring invoices. To learn more, read on how QuickBooks Online can automate accounts payable (A/P).

Inventory Management – QuickBooks has robust inventory tracking tools for Plus and Advanced users. It allows you to manage vendors and inventory and create purchase orders on the platform. It also makes stock inventory management through automatic updates and on-demand reports, allowing you to see which items are selling and what to reorder.

Invoicing – QuickBooks Online has powerful invoicing features, making it a popular accounting software for accounts receivable (A/R). You can create professional invoices from scratch or use its templates to invoice customers seamlessly. It can automatically calculate sales tax when making a sales receipt, regardless of where you’re running your business.

Feature Add-Ons – QuickBooks Desktop and Online offer multiple add-ons to streamline business processes. You can use QuickBooks Time to automatically track employee time and their real-time location for easier time-tracking. Its payroll feature (QuickBooks Payroll) can help you manage employee payments, payroll taxes, and other HR tasks.

QuickBooks offers assisted bookkeeping through certified bookkeepers, streamlining your bookkeeping tasks so you can focus more on your business and prepare for tax time. You can also pay vendor bills using the software through QuickBooks Bill Pay.

Diverse Third-Party Integrations

Quickbooks Desktop and Online offers a diverse set of third-party integrations (over 750 apps), allowing you to automatically sync data between other apps. It includes project management platforms, e-commerce stores, CRM software, payroll tools, and more. It supports notable platforms like PayPal, Gmail, Stripe, Square, Shopify, WooCommerce, and Zapier.

Portability and User Support

Since it is cloud-based, you can use QuickBooks Online on any computer as long as you have a stable internet connection and are logged in to your online account. It has an intuitive user interface and main dashboard where you can easily find its core features and access reporting data. However, due to its vast feature set, you might experience a steep learning curve if you’re a newbie user with little accounting knowledge.

When moving from the desktop version to Online or experiencing minor issues, you can access QuickBooks’ online support for help articles, troubleshooting guides, video tutorials, and community discussions about specific features. The platform offers phone support, live chat, email, and an AI support chatbot.

Where QuickBooks Online Fails

Limited Account Users

QuickBooks Online’s highest pricing plan (Advanced at $235/mo.) only allows up to 25 account users. On the other hand, QuickBooks Desktop Enterprise ($4,668.50/year) allows up to 40 simultaneous users. While both pricing tiers are already expensive, they’re minimal compared to other accounting software (e.g., Xero) that allow an unlimited number of users. Check out our QuickBooks vs. Xero comparison to learn more.

Expensive Pricing Plans

QuickBooks Online’s starting plan (Simple Start) costs $35 monthly and only allows one user plus account access for two accountants. The plan has limited expense tracking tools besides receipt capture and mileage tracking. It also doesn’t include advanced features like time-tracking, multi-currency support, and inventory management, which can only be accessed in the Essentials and Plus plans, costing you $65 and $99 per month, respectively.

How to eliminate repetitive bookkeeping tasks?

Book a demo

and we will show you how

Regarding its add-ons, QuickBooks Online provides them to users at different pricing schemes, potentially increasing your costs as you need more features. So, if you’re subscribed to Simple Start as a small business owner, you’ll need to pay more to access services like time-tracking (starts at $40 per month) and payroll ($50 monthly, $6 per employee/month). More advanced features like Live Bookkeeping and tax help require an additional $50 on top of your monthly subscription.

Lacks Industry-Specific Features

QuickBooks Online lacks niche features that are only available in QuickBooks Desktop versions. These include tools for growing companies in manufacturing, wholesale, construction, and other professional services. For instance, industry-specific features such as inventory management, job costing, payroll, and mobile barcode scanning are readily available in QuickBooks Desktop Enterprise.

On the other hand, QuickBooks Online is a one-size-fits-all accounting solution for small businesses, mainly focusing on services like bookkeeping, expense tracking, accounting reports, and invoicing.

QuickBooks Online Pricing and Features: At a Glance

These are QuickBooks Online’s pricing tiers, which include a free trial for 30 days. They also offer a 50% discount for new users for the first three months. Add-ons (e.g., QuickBooks Time, Live, Bill Pay, and Payroll) have their separate pricing plans:

Final Thoughts

QuickBooks Online is a robust cloud-based accounting software for small business owners. It provides many advantages to your business, primarily in keeping your accounting process streamlined. However, the platform has its cons, like limited account users, minimal industry-specific features, and expensive pricing as your business scales.

If you’re looking for a cost-effective alternative to QuickBooks Online for your pre-accounting and expense-tracking needs, consider Envoice. It offers more advanced features (e.g., multi-level approvals, invoicing, payment processing, etc.) and allows an unlimited number of users at an affordable price. It can also help your business by digitizing and automating document handling, effectively reducing clutter and manual tasks.

Ready to streamline your pre-accounting process and enhance productivity? Try our automation features today and transform how you manage your accounting tasks. Contact us to get started!