What is Quickbooks, and how does it work? Top guide

Panna Kemenes
13.09.21
10 minute read

QuickBooks is accounting software designed for keeping track of income and expenses.

Many small to medium business owners use QuickBooks. As of 2019, there were already 3.3 million QuickBooks Online subscribers, 40% of which were small businesses.¹

QuickBooks Online has several subscription levels you can choose from. Most of the QuickBooks Online subscription levels also offer multi-currency features. This is useful for businesses working with international customers and suppliers.

Connect QuickBooks and Wise:
Automatically sync all your bills in real-time

This article will focus on what is QuickBooks Online, but you can also find information on the Desktop and Mac versions.

📝What you’ll find in this article:
This piece has been written in collaboration with Esther Friedberg Karp, an esteemed bookkeeper and QuickBooks ProAdvisor.

What is QuickBooks, and how does it work?

QuickBooks is an accounting software package created by Intuit, which offers solutions for managing personal, business, and tax finances.

It is available as a desktop software for Windows, with several editions. You can also choose the Mac, or Online version.

Businesses can use QuickBooks to automate processes such as invoicing, payments, accounting, and more. These features make it easier to manage and track business finances.

How does QuickBooks work?

QuickBooks Online works with either the monthly or annual plan. Once you sign up, you’ll be able to use features that accommodate the type of business you own. Desktop versions are also available.

Features are geared towards freelancers, small, and medium-sized business owners.

QuickBooks Online integrates with other Intuit software. These include TurboTax (for preparation of personal income tax returns) and ProConnect (tax software for accounting professionals).

It also integrates with many other software packages and apps.² These include ones that manage charitable donations, scheduling, time tracking, document management, payment processing, and inventory management, to name just a few.

These integrations and compatible tools allow users to manage and automate a wide variety of business processes.

There’s a free 30-day trial option you can take advantage of before you have to part with your cash. This is a good opportunity to discover what QuickBooks Online is for, and whether it can help your business.³

What is the difference between Quicken and QuickBooks?

As they are both popular finance tools, people often draw comparisons between Quicken and QuickBooks. They do not serve the same purpose, however.

  • QuickBooks is accounting software designed for business owners.

  • Quicken is a personal finance software, for individuals and families looking to track their finances.

QuickBooks versions

QuickBooks is compatible with most devices, but each version has slight differences that you should know. Before you decide, check if the software is compatible with your operating system and device.

QuickBooks for Mac

QuickBooks for Mac is a version of the accounting software designed for Mac users. It is not identical to the Desktop and Online versions, as some features are optimized for the Mac platform.

The Mac 2021 version is available for a one time-payment of $399.99.⁴

QuickBooks Desktop

QuickBooks Desktop is designed to run with Windows. It offers most of the accounting software’s main features.

Users can choose between three different packages. The largest package contains extra features such as enhanced granular user permissions and automatic data encrypted backups.⁵

QuickBooks Online

QuickBooks Online is designed for convenience, as you can access it from your internet browser or mobile device.

One of the standout features of QuickBooks Online is the QuickBooks Multicurrency feature. This feature is useful if you do business on an international scale. Multicurrency is available with the Essentials, Plus, and Advanced subscriptions.⁶

Track your bills automatically with QuickBooks Online and Wise
    If you have international bills to pay, not only can you pay them at the real mid-market rate with Wise, but now you can also sync Wise with QuickBooks.
  • See your unpaid bills in real time and pay them seamlessly from your ‘Bills’ page on Wise.
  • Your bill payments and any other Wise transactions will be synced, matched and categorised in QuickBooks for simple reconciliation.
  • Once connected, all bills you create in QuickBooks Online will automatically sync in real time to Wise, where you can choose which ones to pay.
  • All bill payments you make with Wise will be matched to the original bill in QuickBooks. They'll also be categorized into the right accounts. If no bill is found, each payment will simply be added as an Expense.
    Sound amazing? See for yourself how much time and hassle you can save.

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What is the difference between Online and Desktop?

You will only be able to use QuickBooks Desktop (as well as QuickBooks for Mac) on the device on which the software is installed.

As the software requires installation, there are certain system requirements. You can check the full requirements on the QuickBooks site.

QuickBooks Online is a cloud-based subscription service that gives you access to the software from wherever you are. You can use any device that has internet connection to login to your account.

As a cloud-based service, all your data will be backed up automatically to Intuit’s servers, along with the data of all other QuickBooks Online users. This means you will not need disk space as you would with the desktop version.

QuickBooks online or desktop

What is QuickBooks good for?

QuickBooks offers customers many finance-related features. Each can help small-to-mid-sized business owners get a handle on their company’s accounting.

So, what does QuickBooks do exactly?

Here are some of the features you can expect when you sign up:

⚠️ Not all subscription levels contain these features. You can check each subscription, and select the one which includes the features your company needs.
Tips from QuickBooks ProAdvisor at EFK CompuBooks
    QuickBooks Online can be the center of a paperless office. Document images incorporated into the accounting data make paper filing and storage a thing of the past.
    Paired with integrated apps, QuickBooks Online holds all your administrative tasks together.
    Your accountant or bookkeeper can access data at any time to run reports, make year-end entries, and file your company’s taxes. All this happens remotely in real time. There is no need to install software or upgrade it.
    There is also no need to verify or rebuild data. There is no need to take copies of your data file to give or send to your accounting professional. Everything happens in the same software and data that everyone is accessing.
    The audit log is very robust, indicating who made what changes and when. In addition, though, I always advise that clients use a backup software that allows them to restore their data to a previous point. This is in case they need to undo deletions or unintended changes.

Invoicing

One of the biggest problems with invoicing is that it can be time-consuming and can even slip your mind if you aren’t careful.

The way QuickBooks tries to solve this issue is by automating the invoicing process.

You can set up recurring invoices and also schedule them so that the recipient receives them on your timeline. What’s more, you can even have the software send out automatic reminders if your customers are overdue on payments.

Get free invoice templates from Wise

Accounting

You can take care of most of your bookkeeping needs with the tools on offer.

For example, you can manage both your cash inflow and outflow activities. You can also print out financial statements to get a visual of your company’s financial health at a glance.

You can even scan and store receipts and track mileage through the mobile app. This allows you to keep track of any potential tax deductions and store all the information in one place.

Customers of QuickBooks can also make the most of the many integrated tools and services that come with the software. Some worth noting are inventory management and time-tracking.

Payments

Managing payments can be stressful as a business owner. You’ll be relieved to know that QuickBooks offers flexible payment solutions.

Whether you run a virtual business or a brick-and-mortar store, QuickBooks can help streamline the payment process.

QuickBooks offers invoice payment with credit and debit cards online. Contactless payment is available through the mobile app and card readers. It also facilitates ACH and eCheck payments. As such, the customer can pay how they prefer.

There are fees associated with the various forms of payment, but QuickBooks’ fees stack up well against the competition.

For example, an invoice paid with a credit or debit card is 2.9% of the payment sum plus 25¢ with QuickBooks.⁷ This fee can be compared to 2.9% with an extra charge of 30¢ with competitor Square.⁸

But the greatest unique advantage of using QuickBooks Payments is that payments and fees are automatically entered for you in QuickBooks Online. Your accounting is done!

Payroll

QuickBooks doesn't only equip small business owners with the tools to process customer payments. It also allows them to pay their employees with several payroll features.

Once you’ve selected a QuickBooks Online subscription level based on your needs, choose a payroll service that suits you (extra fee applies).⁹ This leaves you with more time to focus your energy on running the business’ day-to-day.

What’s more, you can also have your payroll taxes completely taken care of with the software. Putting the software in charge should ease any tax-related stress as it will calculate, file, and pay the taxes.

You can even incentivize your team through the software by managing HR and employee benefits in your account.¹⁰

Multicurrency accounts

If you’re a small business owner with global ambitions, you may need assistance with international payments.

The QuickBooks Multicurrency feature helps you track transactions in different currencies.

Multicurrency is available in the following QuickBooks Online versions:¹¹

  • QuickBooks Essentials
  • QuickBooks Plus
  • QuickBooks Advanced

You may have customers and suppliers with whom you transact using a currency different from your country’s default (“home”) currency. With QuickBooks, you can set up profiles for them in each currency.

The software will also keep you abreast of any currency exchange gains or losses you might incur.

There is a caveat, though, since QuickBooks uses the IHS Markit exchange rate.¹² But your bank may charge you a different rate, to add to their bottom line. Foreign transaction fees may come on top of that. As such, the numbers you receive might not add up until you factor in the extra fees.

This is where Wise can step in and save you money by doing away with nasty hidden fees.

With Wise Business, you can have up to 10 local account details. This way, the customer or supplier can pay your invoice in their local currency.

Multicurrency

Is QuickBooks easy to learn?

QuickBooks is quite intuitive; that’s why the company is called Intuit! But it works differently from other accounting software packages.

Consequently, some traditional accountants and bookkeepers find it complicated at first, because it doesn't “behave” the way manual ledger bookkeeping used to.

There is a learning curve to mastering it, as there is for other accounting software options.

However, the software has been around since 1983, so they have gained a vast amount of user experience and feedback over the years.¹³

There are a wealth of resources and knowledge base articles on the QuickBooks website, with many Q&As and tutorials that answer questions about the software.¹⁴

With hundreds of thousands of articles, there’s a strong chance that any question you may have about QuickBooks has already been answered.

If not, then you can ask the QuickBooks community, where you can find over one million contributors to answer your questions.

QuickBooks pricing

QuickBooks Online offers various pricing plans for different business needs.

For freelancers, the ‘self-employed’ plan covers everything from tax deductions to basic reports. Then there are two other plans that include various tax services.

For small business owners, there are four different QuickBooks small business price plans.¹⁵

Users can often take advantage of time-limited promotional pricing. There’s also the option of a 30-day free trial you can take advantage of to try before you buy.

It’s important to note that if you choose the free trial, you will lose the promotional pricing. You will have to choose between the promotion or the free trial in this case.

⚠️ The prices shown here are the full price subscriptions. These prices can be subject to change, so please check the QuickBooks site for any promotions.

Small business pricing

PlanPrice¹⁵Features
Simple Start$25/month
  • 1 user + 2 accounting firm users
  • Track income & expenses
  • Invoice & accept payments
  • Maximize tax deductions
  • Run general reports
  • Capture & organize receipts
  • Track miles
  • Manage cash flow
  • Sales and sales tax tracking
  • Send estimates
  • Manage 1099 contractors
Essentials$50/monthSimple start features, plus:
  • 3 users
  • Manage and pay bills
  • Time tracking
Plus$80/monthEssential features, plus:
  • 5 users
  • Inventory tracking
  • Project profitability tracking
Advanced$180/monthPlus features, plus:
  • 25 users + 3rd accounting firm user
  • Business insights and analytics
  • Invoice and expenses batching
  • Customizable access by role
  • Exclusive premium apps
  • Dedicated account team, on-demand online training
  • Automated workflows
  • Company data restoration

Self-employed pricing

PlanPrice¹⁶Features
Self-employed$15/month
  • Separate business and personal expenses
  • Optimize Schedule C deductions
  • Quarterly tax estimates are automatically calculated
  • Automatic mileage tracking
Self-employed Tax Bundle$25/monthSelf-employed features, plus:
  • Pay estimated quarterly taxes directly through online QuickBooks
  • Transfer information to TurboTax
  • One state and one federal tax return filing
Self-employed Live Tax Bundle$35/monthSelf-employed Tax Bundle features, plus:
  • Real Certified Public Accountant (CPA) on hand to provide assistance
  • Unlimited advice year-round
  • CPA final review of your return

Payroll

Once you select your business plan, you can also optionally add a payroll plan. There are three different packages to choose from. These also work with a monthly subscription fee.

PlanPrice¹⁷Features
Payroll Core$45 + $4/employee/month
  • Full-service payroll
  • Includes automated taxes and forms
  • Auto Payroll
  • Health benefits for your team
  • 401(k) plans
  • 1099 E-File & Pay
  • Expert Product Support
  • Next-day direct deposit
Payroll Premium$75 + $8/employee/monthPayroll Core features, plus:
  • Same-day direct deposit
  • Workers’ comp administration
  • HR support center
  • Expert review
  • Track time on the go
Payroll Elite$125 + $10/employee/monthPayroll Premium features, plus:
  • Expert setup
  • 24/7 expert product support
  • Track time and projects on the go
  • Tax penalty protection
  • Personal HR advisor

QuickBooks pricing

Can I get QuickBooks for free?

Yes and no.

You can get a 30-day free trial to use the software (if you do so, you won't receive any time-limited promotional pricing for new users). Once it expires, you will no longer have access to the information, unless you pay for a subscription.

If you’re planning to try out the software for free and find that you like it, you need to start one of the pricing plans to keep your data.

To continue using QuickBooks after the trial, you will need to provide your credit card information for authorization. A monthly fee will be applied according to the plan you choose.

The 30-day free trial is only available to new QuickBooks customers and cannot be combined with other offers.¹⁸

Save hours on admin when you connect QuickBooks with Wise

Next time someone asks 'what is QuickBooks?' you will be equipped with all the answers, as well as some handy tips.

But it's also worth knowing how you can use other services, such as Wise, with Quickbooks.

Business often deal in currencies other than their own.

For example, if you do business in USD, but live overseas, getting paid and paying others is complex and can take up a lot of time. Not to mention the costs involved.

Luckily, you can use Wise Business to pay and get paid like a local, at the real mid-market rate.

You can also add your Wise account details to your QuickBooks invoice templates. Customers can pay in their preferred currency, which can help your invoices get paid faster.

What's more, you can sync your Wise account with Quickbooks Online to track your bills in real-time. This could save you hours of admin.

Open a Wise Business account in minutes 🚀

Image
    Esther Friedberg Karp, MBA, is an internationally-renowned trainer, writer, business consultant, and speaker with advanced certifications in both QuickBooks Desktop and QuickBooks Online.
    She has been named twice to the list of Insightful Accountant’s Top 10 QuickBooks ProAdvisors worldwide, with the titles “Top International ProAdvisor” and “Top Trainer/Writer ProAdvisor.”
Sources:
  1. QuickBooks And Intuit Statistics Every Accountant Should Know
  2. Lighter Capital Announces New $15 Million Fund to Help Developers Grow Apps Designed for Intuit QuickBooks Platform
  3. QuickBooks® Online Pricing & Free Trial
  4. QuickBooks Desktop for Mac 2021 Accounting Software
  5. QuickBooks Desktop Pro 2021 Accounting Software
  6. About Multicurrency
  7. Accept Credit Card Payments | Process Credit Cards for Small Businesses
  8. Square Invoices Fees
  9. QuickBooks® Online Pricing & Free Trial
  10. Online Payroll Services for Small Businesses
  11. About Multicurrency
  12. Learn about exchange rates in QuickBooks Online
  13. Intuit history
  14. QuickBooks Learn and Support US
  15. QuickBooks® Online Pricing & Free Trial | Official Site
  16. QuickBooks Self-Employed | Save More with QuickBooks + TurboTax
  17. QuickBooks® Online Pricing & Free Trial | Official Site
  18. QuickBooks® Online Pricing & Free Trial | Official Site

All sources checked 31 August 2021.


This publication is provided for general information purposes only and is not intended to cover every aspect of the topics with which it deals. It is not intended to amount to advice on which you should rely. You must obtain professional or specialist advice before taking, or refraining from, any action on the basis of the content in this publication. The information in this publication does not constitute legal, tax or other professional advice from TransferWise Limited or its affiliates. Prior results do not guarantee a similar outcome. We make no representations, warranties or guarantees, whether express or implied, that the content in the publication is accurate, complete or up to date.

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