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Which is Better for a Small Nonprofit or Church: QuickBooks Online or Desktop?

QuickBooks® Online or desktop? Your nonprofit or church may be considering using the popular accounting software program, but how are you to know which version would work best for your specific needs?

Both QBO and the desktop versions are geared towards businesses, not nonprofits. (The Nonprofit desktop version has very minor tweaks, including some specific reports and the ability to change the names of customers to Donors or Members, but is still a business product.) Both QuickBooks Online and the desktop version require some extra steps to track grants, funds, and programs, but they are popular with the not-for-profit world because they are low-cost and fairly intuitive. Therefore, I’d like to explore the differences between these programs; not compare them to other nonprofit accounting options.

Let’s start with the advantages of QuickBooks Online:

1.The biggest advantage QBO has is the convenience factor. You can log into your accounting system anywhere you have internet access. QBO also has a mobile app so you can work from your phone or tablet. No more worrying about backing up, updating your system, or working in the file at the same time as someone else in the office. Bank accounts are updated continually, and reports can be scheduled for automatic mailings. The Executive Director or Pastor can pull up reports from the road or their homes while the bookkeeper is working in the office. The volunteer treasurer can review data in the evenings instead of having to take time off work during the day. Convenience is the primary reason why QBO has become so popular.

2.QBO makes it easier to transfer data to your accountant. Each subscription of QBO comes with two complimentary accountant users. Your CPA or offsite accountant can log into your system and make changes directly into your files. In the desktop version, you have to send them a backup file or a special “Accountant’s copy” file.

3.Intuit, the company that makes QuickBooks, is dedicating more resources to the online program, but are unlikely to forget the desktop version completely. The Motley Fool has an interesting article about the lessons Intuit learned when they tried to push too hard to get users to switch to QBO http://www.fool.com/investing/general/2016/05/01/intuit-learned-a-valuable-lesson-in-its-plan-to-sh.aspx.

But even if it can’t compete with the convenience, QuickBooks Premier has some strong advantages over the online version.

1.The reporting capabilities are substantially better. Keep in mind QBO is being revised regularly, so this may change in the future, but for now, the desktop version has much more robust capabilities. Nonprofits who are tracking mission trips or have member accounts that need to track both money raised and related expenses should be aware you cannot record in QBO the transactions as discussed in my blog post, http://accountantbesideyou.com/blog/mission-trips-tracking-members-accounts/ . Instead they will need to use a separate worksheet.

2.Tracking restricted cash is also easier in the desktop version. In Using QuickBooks for Nonprofit Organizations, Associations, & Clubs, I explain how to set up a report that will allow you to differentiate your restricted versus unrestricted cash even if an organization only has one bank account. You cannot run the same report in QBO, but will need to export data to a spreadsheet to manipulate. You can still get to the same information in QBO, but it will take mores steps.

3.Cost should also be considered. If you are an eligible organization, www.TechSoup.org is a website that allows you to purchase either QuickBooks Premier Nonprofit or QuickBooks Online for a fraction of their suggested retail costs. If your organization is not eligible for the discounted price, the desktop version is substantially cheaper than the online version over a three-year period. Please note: readers tell me the Intuit QBO salespeople will say the cheaper Simple Start option will work for a church or nonprofit, but they do not realize you need the class tracking that is only an option in the more expensive Plus version.

4.The desktop version does not require internet access to be functional. If you work in an area with slow or irregular internet service, QBO will be very frustrating.

5.QuickBooks Premier has a more intuitive feel for most people. QBO will probably get there, but Intuit has been making the desktop version more user friendly for years and that is why it is the top selling accounting program.

So which version should your organization use? If the convenience of the automated and remote capabilities outweighs the more limited reporting, try QBO. In Eulica Kimber and my just-released book, Using QuickBooks Online for Small Nonprofits & Churches , will give you the details you need to get started .

If you have lots of mission trips or specialized reporting needs, you’ll probably want to stick with the desktop version. My books, QuickBooks for Churches & Other Religious Organizations and Using QuickBooks for Nonprofit Organizations, Associations, & Clubs include sample charts of accounts and hundreds of screenshots to assist you in setting up your accounting system.