Quickbooks Online or Quickbooks Desktop? This is the question we will be addressing in today’s article for Real Estate Investors.
Real estate accounting can be an overwhelming challenge for newbie investors and those who want to follow the DIY route instead of hiring an accountant or bookkeeper. However, there are a plethora of products offered by Quickbooks (Intuit) for real estate investors that come with a variety of in-built features, automation, and other advantages that allow for efficient and stress-free bookkeeping.
Once you have decided to make use of one of the Quickbooks products for your real estate accounting, your next step is to determine the right choice for you. Investors often find themselves comparing between Quickbooks Online vs. Quickbooks Desktop. The mind boggling question is, which one is better to efficiently manage all your real estate bookkeeping chores?
In this article, we will walk you through a detailed comparison of both products offered by Quickbooks for real estate investors so you can make a well-informed decision. The right choice for your real estate business depends on a wide variety of elements, including your chosen accounting method, the scale and size of your real estate business, and other preferences, such as features, level of automation, prices, security dilemmas and more.
Let’s take a detailed look at all the similarities and differences between Quickbooks Online and Quickbooks Desktop, shall we?
Small-scale and newbie real estate investors have exhibited a general preference for Quickbooks Desktop, mainly because of its cost-effective price rates. If you want to make a simple and budget-friendly decision, Quickbooks Desktop is available for a one-time payment while the Quickbooks Online requires a monthly payment.
Another key difference is the fact that with the Quickbooks Online , you get to enjoy automatic upgrades and updates to enhance the efficiency and user interface for a formidable experience. On the other hand, Quickbooks Desktop requires $299/year for its annual upgrade, assuming you want to upgrade to the newer version of Quickbooks Desktop, which for many of you will be unnecessary.
Another factor that needs to be considered while comparing the prices is the amount and quality of technical support provided by the two kinds of products. A Quickbooks Online subscription includes support from the parent company Intuit, which is not available in the Desktop version.
Your monthly and yearly cash flow is another aspect to consider, and if you are just starting out in the real estate investment business, choosing a monthly subscription method instead of the yearly model will give your real estate bookkeeping some buying power and flexibility. That said, implementing a real estate bookkeeping system is not something you want to change frequently, so while the monthly payment option offered by Online is lower initially, Quickbooks Desktop is generally the more budget-friendly choice.
Within each product (Online vs Desktop), there are different options to choose from. For example, Quickbooks Online offers ‘Simple Start’, ‘Essentials, ‘Plus’, and ‘Advanced’, whereas Quickbooks Desktop offers ‘Pro’, ‘Premier’, and ‘Enterpirse’. Quickbooks Online Essentials ($20/month), for example, allow 3 users to operate the database at one time, whereas Plus ($35/month) allows up to 5 users. For Desktop, Pro ($299 one-time fee) allows up to 3 users, whereas Premier ($499 one-time) allows up to 5 users. Online does offer an introductory budget friend option of $10/month (‘Simple Start’) for one user which may work for many of you, but that option comes with other limitations, Quickbooks Desktop allows you to setup a multi-user interface that will allow multiple users to work simultaneously on the same network on different computers. You can always set up it yourself, or hire a professional to help you set it up. On the other hand, Quickbooks Online is powered with a cloud-based system that allows users across the globe to work together on the same network, simultaneously.
Generally speaking, Desktop provides MORE product functionality than Online, though they are likely features you don’t need, such as inventory management. For the most part, both systems offer the functionality you need (e.g. creation of professional invoices, tracking sales and expense, and managing accounting receivable and accounts payable).
As you scale up and add properties to your portfolio, as we have written before, it is critical that you keep the accounting separate (e.g. different bank accounts, credit cards, etc) for these properties. While we generally think Online is a better product, this is probably the one area where Desktop can be superior, because you can create separate ‘company files’ for your different properties. You are only offered one company file per license with Online, so keeping property bookkeeping separate is accomplished through ‘Class Tracking’. While it is not as ‘separate’ as different company files, it does the job. Author disclosure: We use Online and class tracking in our business.
It would certainly not be an exaggeration to say that when it comes to real estate accounting, automation certainly works wonders at making your lives easier, simpler and more efficient. Automation can truly make an immense difference to how you record your transactions and process your cash inflows and outflows, delegating majority of the work to the automated algorithms.
Both the Online and Desktop versions are powered with bank feeds, which can be used to import the transactions directly from your bank, thus eliminating the need to manually record your transactions. This allows you to ensure greater accuracy, along with ensuring that your bank statements and Quickbooks records are 100% similar.
In Quickbooks Desktop, you have to ‘refresh’ the bank import manually, whereas Quickbooks Online automates the bank feed/import without user intervention and is thus more automated. While both get you to the same end-state, we have used both products, and the Online experience is much more enjoyable.
Better automation allowed by Quickbooks Online extends to other uses as well. For instance, you can set up “Bank Rules” and ‘Auto Add’, which will be employed as the system automatically records your transactions as they occur (e.g. machine learning). Quickbooks Desktop is not equipped with the Auto-add feature, even though the software does include Bank Rules. Bank rules and Auto Add will significantly reduce time spent on your bookkeeping, so we highly suggest you invest time setting these up.
As a busy real estate investor with a hectic schedule, the automated features of both Quickbooks products are indeed indispensable to maintain accuracy and keep track of your transactions, while doing so in an efficient matter. But in totality, Quickbooks Online certainly takes the prize when it comes to automation.
Flexibility and mobility are two instrumental features that are required in the case of real estate investing, and these two features need to be addressed carefully. The Online version provides greater flexibility and mobility as compared to the Desktop version, and this is probably the biggest and most critical difference between these two products.
Quickbooks Online allows you to review your real estate accounting transactions, business documents, and other data from anywhere in the world OR with any device with an internet connection. In fact, there is now an app for your phone (both Android and iOS) to stay connected with your bookkeeping anywhere/any time. Desktop, on the other hand, is only accessible on the actual computers where the software was installed, which is clearly a large limiting aspect.
The only benefit of Desktop when it comes to flexibility and mobility is that you can access your bookkeeping without an internet connection, whereas you cannot with Online. That said, Wifi hot spots are nearly everywhere at this point, so this shouldn’t be a significant limitation a majority of the time.
We have used both products, and we highly suggest Online. Furthermore, Intuit (Quickbooks parent company) is investing more money into Online. Nearly every software system is now in the cloud, which is how Online works. Don’t be enticed by the ‘one-time fee’ nature of Desktop versus the monthly fee on Online. Software is evolving/improving daily, and Quickbooks is no different. By implementing Online, it will provide the most flexibility to stay current with these trends.
If bookkeeping seems overwhelming and/or a time commitment that is taking you away from your revenue-generating activities, give us a call. We are both real estate investors and CPAs , so we understand your needs better than the average bookkeeper and can help you scale through automated reporting and collaboration.
To your success,
Adam and Mark