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The Pros and Cons of Migrating to QuickBooks Online

I am an advocate of cloud-based accounting and tools, perhaps even more so considering the “new normal” we’re living in today, however, even I recognize that there are limitations to a cloud-based approach, and, I know, I know... most people hate the caveat of “it just depends”, but it does!

It depends on what works best for you and your organization. As with anything, there are advantages and there are disadvantages, “what goes up must come down”, yaddi yaddi yaddi.

As the world makes the move over to the cloud, make sure that you have the right tools so that you’re not left behind in the “days of old”. So, let’s explore the pros and cons of QuicksBooks Desktop (QB Desktop) and QuickBooks Online (QBO), specifically as it relates to the nonprofit sector; the good, the bad, and...the ugly?

“So what is QuickBooks and what’s the difference?”

Quick note (no pun intended) before we get started, for those who may not know, QuickBooks is a product created bu Intuit and is an accounting software for businesses and nonprofits that provides tools to manage your finances. It allows for integrations and provides an entire ecosystem for financial management. The key difference between QB Desktop and QBO is that QBO is cloud-based software running via the internet with monthly pricing and QB Desktop is locally installed with a license pricing model.


QBO is Not Identical to QB Desktop

I feel as if some people have the notion that QBO is simply the cloud-hosted version of QB Desktop, not so. QB Desktop will have certain features that QBO won’t, QBO has a more streamlined intuitive user interface, whereas QB Desktop has a flowchart style menu. Managing expectations will be key here.

Some common complaints I hear from people once they actually migrate is that they don't know how to access certain features, they can't run certain reports, or they're unsure of how to account for certain transactions. I think this stems simply from not having a clear understanding of QBO, so prior to migration, have a clear strategy in place as to how you're going to manage your QBO account.

QBO Unstreamlined Payroll

Payroll is a huge pain, especially for nonprofits, mainly due to allocating payroll and managing those costs. If you're familiar with QBO, you know classes and locations are used for different items, usually for functional expenses.

With QBO, the payroll option is just not as robust QB Desktop. For example, there’s the extra step of having to create a journal entry in order to assign specific staff to certain classes in locations. Because you're typically allocating specific staff who have worked directly on these items, you have to create this journal entry. Making this piece with QBO a bit of a pain.

QBO Inventory Tracking is Not as Robust

I personally don't get too involved with inventory or retail, but I do know that when you're using QBO, the benefits you get and the features that you can use as it relates to inventory are very limited.

You already know that you should be specifically tracking the quantity and the different types of products being sold, so you want to be sure that you can actually get the level of detail that you need when making the switch. And while there are certain integrations, Square being a popular one, I just want to note that I've personally, read, seen, and heard a lot of complaints as it relates to the integration between QBO and Square, such as problems connecting your Square account.

If integrating QBO with Square is your answer to not being able to track inventory the way you like, then you may want to take the connection issues and other complaints into consideration.

Bottom line, if your organization does a lot of product sales and tracking of inventory, then QBO may not be the best option for you.


QBO Real-Time Access

Now let's get into some of the pros!

QBO’s real-time access, I truly enjoy this aspect of QBO. With an internet connection, you can access your reports and your numbers 24/7. That’s a big deal for me to be able to modify, update, etc. in real-time.

You will always have access to those changes and the effect they may have on your financials (assuming you have paid your internet bill and the zombie apocalypse isn’t upon us... it could happen, right?).

Having real-time access to your reports, real-time insight into your numbers makes for quicker decision making, as well as simply being an overall more efficient process.

For example, and I’ve seen this happen, your old bookkeeper left, QB lives on their desktop, and you didn’t have a process in place to transfer it over prior to.

With QBO, no more waiting until the end of the month to get your actual reports from your bookkeeper because you can't access the QB Desktop file. As long as you have user access, you can log in, you can run the reports, and you can view them yourself. Self-sufficiency, adulting at its finest!

Collaboration and Control

With QBO, you have the ability to collaborate, as well as exercise some control. Now, don’t get too crazy wielding your “power” around, but you will have the ability to add and remove users as you see fit, as well as control their access and views; you're not limited to the people in your office or the person sitting next to you. It opens up the talent pool and gives you the ability to outsource if need be because now you simply grant access to your software.

Being able to manage user access and place limits on that access helps with data integrity as well as having internal controls.

Third-Party Integrations

First let’s take a new approach, instead of thinking “Great, one more thing I have to install.”, think of integrations as helpful efficient conduits that will enhance your reporting, and ultimately your organization.

If there are certain features that QBO doesn't have, there’s an app for that 😬 rather there’s an integration for that, and QBO’s third-party integrations are truly unmatched. And not all of the integrations cost money, some are free, it's simply a matter of linking them.

I talk often about creating your back office ecosystem using third-party integrations and ensuring that those integrations and your devices/installed software, actually “talk” to one another.

I know for me when my back office ecosystem is “talking”, the quality of my reporting is enhanced and gives me a bit of an edge in gaining deeper insights into my financial data.

Here at Visionary Accounting Group, we're huge advocates of cloud-based solutions, being tech-forward, and creating a back-office ecosystem that supports you in your daily operations so that you can have those forward-facing conversations with the board and with your funders. And while there are pros and cons (as with anything) those cons are not insurmountable, they can be mitigated by understanding the needs of your organization, the depth of reporting needed, and being clear on the level of insight you're looking for.

You need to know your “why” and you need to know your “hows”.

Why are you migrating? How do you feel about it? How will you do it, what’s your strategy? How will third-party integrations fit in or not? How does your organization benefit from this move?

Know the answers to these questions, map out a clear strategy so that you can make an informed decision.

You don’t want to be “that guy” on the FB group complaining about migrating over, wishing they could go “back” to QB Desktop, because they failed to have a plan in place; that’s not you, right?

So, if you are not getting the most out of your accounting software right now, if you're not loving the current setup, or if you feel like there are some gaps, some loopholes in your current financial process, then I invite you to book a call with us. We’d love to talk about your next steps!


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