buy and install on your local computer. In this chapter, we explore the QBO/QBOA software format, and I assume that you’ve read Chapter 1 and evaluated whether QBO can meet your needs.
It’s All about Subscriptions
QBO and QBOA fall into the category of Software as a Service (SaaS). As such, you don’t buy the software. Instead, you rent it; that is, you buy a subscription to use the software for a time period specified by the seller.
And, of course, a QBO user can pay varying amounts for a subscription, depending on the subscription level purchased.
QBO is available at four different subscription levels, and each subsequent subscription level costs more and contains more functionality. The QBO subscriptions available at this writing are
❯❯ Self-Employed
❯❯ Simple Start
❯❯ Essentials
❯❯ Plus
After you assess your needs as described in Chapter 1, use the following information to identify the lowest subscription level that will meet your requirements. At this point in time, you can upgrade to a higher level, but you cannot downgrade to a lower level.
Accounting professionals signing up clients for QBO and creating client companies originally couldn’t switch client companies from one version of QBO to another if the accounting professional created the client as part of the Intuit Wholesale Pricing program. However, that’s no longer true. So, you no longer need to anticipate your client’s requirements for more advanced features like the ability to track inventory or prepare 1099s.
The Self-Employed version
This version of QBO is aimed at freelancers and self-employed individuals, basically, those who receive Federal Form 1099 to account for the money they’ve been paid and pay their taxes using Schedule C of IRS Form 1040. Using the Self-Employed version, you can
❯❯ Separate business from personal spending
❯❯ Calculate and pay estimated quarterly taxes
❯❯ Track mileage and IRS Form 1040 Schedule C (the IRS form that most self-employed people must complete to determine business net income or loss) information
❯❯ Track income and expenses
❯❯ Download transactions from your bank and credit card accounts
Like the other versions of QBO, you can use a tablet, smartphone, or desktop computer to access your data. In addition, the Self-Employed version uses the same security and encryption as banks, and your data is automatically backed up online. As you might expect, this version has the fewest reports available – only three – and only one person can access QBO.
If you opt to include TurboTax in your subscription, you also can pay your estimated quarterly taxes online and export Schedule C information from QBO to Turbo Tax so that you can prepare your tax return more easily. With TurboTax as part of your subscription, you receive one federal and one state electronic tax return filing at no extra cost.
The Simple Start version
The Simple Start version of QBO is great for a new business with basic bookkeeping needs. With Simple Start, you can
❯❯ Track your income and expenses
❯❯ Download transactions from your bank and credit card accounts
❯❯ Create an unlimited number of customers
❯❯ Send unlimited estimates and invoices
❯❯ Print checks and record transactions to track expenses
❯❯ Import data from Microsoft Excel or QuickBooks desktop
❯❯ Invite up to two accountants to access your data
❯❯ Integrate with available apps
Although the Simple Start version supports Accounts Receivable functions, you can’t track bills due in the future in the Simple Start version because it doesn’t include any Accounts Payable functions. And, one other important consideration: The Simple Start version also has no general ledger.
Although the Simple Start version allows two accountants to work in the client’s company, Simple Start is still designed for a single user. Therefore, the accountant cannot create the client’s company for the client. At the time the company is created in QBO, whoever creates the company becomes, in QBO parlance, the Master Administrator.
In addition to the single-user restriction, the Simple Start version offers more than 20 reports. And Simple Start users can memorize report settings and produce memorized reports.
The Essentials version
The Essentials version of QBO includes all the features found in Simple Start. In addition, with the Essentials version, you can
❯❯ Set up invoices to automatically bill on a recurring schedule
❯❯ Take advantage of Accounts Payable functions, including entering vendor bills and scheduling their payment for later
❯❯ Compare your sales and profitability with industry trends
❯❯ Compare your sales and profitably with industry trends
❯❯ Create and post recurring transactions
❯❯ Control what your users can access
The Essentials version permits three simultaneous users and two accountant users. In addition, the Essentials version contains the reports found in Simple Start and 20 additional reports.
The Plus version
The Plus version of QBO is the most full-featured version of QBO. It contains
