QuickBooks Online - How the CLOUD Works With Your BOOKS

By David J. Ferrell

I began using QuickBooks on my office computer in 1997 when I learned that my $1,000 a month accounting firm was using this program to do my books and payroll. I researched in-house use of this accounting software because of frequent payroll mistakes made by that accounting firm and a major foul up in the trust account. I learned that our payroll and trust account was being administered by the most junior non-CPA secretary of the accounting firm. I went to the firm with a box of floppy disks and “acquired” my law firm’s data. I then went to Computer City and purchased QuickBooks for less than one hundred dollars and within two hours I setup the law firm’s books on my computer and discovered what a horrible job the accounting firm had done with my firm. As I remember it, we had been set up as a trucking company, that was why our trust account was fouled up. QuickBooks had/has a module that sets up a business with the regular accounting codes for certain types of businesses, INCLUDING law firms.

As good as QuickBooks was/is I became disenchanted with the frequent need to update the tax tables for payroll. QuickBooks required that I purchase a “plug in” module for my desk top version for payroll tax computations and the yearly fee began at $249 and went up every year. QuickBooks also kept “upgrading” the desktop software, when the old version worked perfectly well for my small firm, but there were veiled threats that my QuickBooks software would be inadequate soon, and more onerous, it would not be supported by “tech support” which I used occasionally but when I did, it was critical.

In January, 2010 I got my bill for the yearly renewal of the tax tables and it was about $350. I was also informed that I needed to upgrade the desktop software again. I was irritated, to say the least, so, I began researching other ways to keep my books. I did not want to go back to an accounting firm, bad memories don’t go away easily. So I went to QuickBooks online and downloaded the free trial version of their “cloud” accounting software.1

Initially, I was worried about having my books in the “cloud” where maybe the world had access to my accounting information but having read the QuickBooks online materials and being assured that my data was secure, confidential and protected I decided to go ahead. QuickBooks Online is a VeriSign Secured™ product, which means they use the same data-encryption technology that banks rely on for data security. I was able to setup an online account, upload my law firm’s data and my accounting codes and try the software FREE for 30 days. The transition was simple and I kept my desktop version and data (just in case) and began using the online version. My main motivation was to eliminate the incessant update and plug in costs AND the time I had to put in each time the updates/plug in’s were needed.

I did not need 30 days to evaluate the online version, I was sold after just a week. I still got my first month free but I did not have to use my desktop version anymore. I did not have to pay the $199.95 for 2010 QuickBooks Pro (upgrade to the desktop) and I applied for a refund of the $350 that had been automatically charged to my credit card for the tax table plug in. I saved $549.95 for 2010.

What did it cost me? QuickBooks online charges a monthly fee which includes updates to the software and for the payroll tax tables plug-in. AND, I don’t have to install the upgrades nor the new tax tables, QuickBooks does that. What do I pay now? $46.82 a month.2 That’s for three users, I only use two, myself and my administrative secretary. So, in reality, I would have paid $549.95 for the new desktop 2010 version of QuickBooks and the tax table plug-in, but now I am paying $46.82 a month which totals $561.84 a year, a difference of $11.89. AND, I don’t have to bother with updates, they come with the online version automatically.

I have an accountant that prepares my 940 and 941 reports and my annual tax return and she has access to my QuickBooks online from her home office, and she is not counted as one of the three users. If I have a question about some tax/accounting issue my accountant can get online while I am online and we can discuss these issues on the phone. When she prepares my 940/941, W2's and my tax return she can do it from her home office. With QuickBooks, I can prepare these documents myself BUT I feel better having a CPA review what I am doing.

The online version of QuickBooks has many bells and whistles that are easy to use and the software adapts to the user’s needs. It works for small firms and large firms and tech support can help you set up how you want the program to display. A detailed log is created showing who is using my accounting software (me, my secretary and my accountant) and what they did (write checks, make a deposit, review my data, etc.) and when. I can access my QuickBooks from any Internet enabled computer and I often review/work on my books at home. As a matter of fact, I created my payroll checks from home for the April 15th payday, went to my office at 6:30AM, printed the checks and put them in my secretary’s drawer and proceeded to the courthouse where I had hearings for most of the morning and my staff had their paychecks when they came to work. This software computes the tax payments and sends me an e-mail of when they are due. Tax payments are made online the day before they are due.
1. http://quickbooksonline.intuit.com/
2. Base Product for up to 3 users $34.95
Online Payroll: $19.95
Subtotal: $54.90/month
20% off QuickBooks Plus
20% off Online Payroll
Current price: $43.92
Tax $2.90
Total: $46.82/month