Small Business | Finance | QuickBooks | Money | Self-Employed | Entrepreneur | Bookkeeping | Tips | Self-Employed

Are you ready to take the plunge with QuickBooks Online but you’re not sure which version you should buy? True story- it’s confusing to sort out the differences between all FOUR versions of QuickBooks Online.

But I got your back.

This week on the Andi Smiles Show I’m talking about the differences between the 4 versions of QuickBooks Online, telling you what type of businesses need which version, and offering some insider tips on how you can save money with QuickBooks Online.

Join me every Wednesday 12pm PST on good ‘ol Facebook for the next episode of The Andi Smiles show!

Don’t want to remember things (‘cause- ugh- things)? Get a reminder when I go LIVE by clicking here and I’ll send you a message via Facebook Messenger right when the shows starts (plus you’ll have the replay link in your pocket!).

Why You Need to Choose Wisely (2:39)


Don’t pay for things you aren’t using


Let’s be honest. Money doesn’t actually grow on trees no matter how much we wish it would. You don’t want to be paying for features in a bookkeeping software that you aren’t using. I know. It’s really hard not get sucked into the tunnel of shiny QuickBooks features. It’s easy to hear about all the amazing features that QuickBooks has to offer, get excited, and sign up right away.

The cool thing about QuickBooks Online plans is that you can upgrade your version at any time.  So, for example, if you have the QuickBooks Simple Start version to begin with, you can upgrade to a higher version as your business needs grow.

What about if you need to downgrade after signing up for a version that has more than your business needs? With QuickBooks Online, you can now downgrade your plan as well. Hooray! If you sign up for a plan at the highest level and then you realize after a couple months you’re not using any of the high-level features, you can downgrade and save yourself MONEY!!!! (because- yay- money)


You Cannot Convert QuickBooks Self-Employed to any other QuickBooks Online Software


Now here’s an important reason why you want to choose wisely. Intuit, the makers of QuickBooks Online, thinks of QuickBooks Self-employed as a product that stands alone from the other QuickBooks Online systems in the product suite. They actually think of the self-employed version as a SEPARATE product than QuickBooks Online.

If you are working with QuickBooks Self-Employed you can’t convert your data from QuickBooks Self-Employed into any of the other online versions.

In this case, you have to be really sure that you want to stay in QuickBooks Self-employed for the long run. Like really sure. Like REALLY REALLY sure. And keep in mind, we use our historical data to do higher level financial analysis and understand trends in our business finances. Don’t give up access to your historical data just because you want to save a few bucks right now.

Remember, this is an intentional decision you’re making because you don’t want to get stuck in a program that you’ll outgrow or won’t be able to able to use then have all your data stuck there. Choose wisely!

organize business finances

QuickBooks Self-Employed (5:50)

With the cost of $10 per month, QuickBooks Self-Employed is not meant for most self-employed people so don’t let the name fool you! The name actually makes it confusing but QuickBooks Self-Employed doesn’t work for small business owners. It’s really meant for independent contractors.


What are the features?


Here’s all the good that QuickBooks Self-Employed offers:

Sync with your bank account allowing you to easily see all your transactions in one place

Digital invoicing so you can send your clients invoices

Mileage tracking

Quarterly tax calculations (but to be totally honest, I don’t know how accurate these calculations are)

Profit-loss report


What’s not included in QuickBooks Self-Employed?


Now that being said, here’s what’s not included in QuickBooks Self-Employed.

No reconciliation feature: There is no way for you to double check that transactions in QuickBooks Self-Employed matches what’s in your bank account unless you do a very tedious manual reconciliation, which is HAAAARRRD. Let me tell you why this could be not-so-fabulous for your business…

I have a client that uses QuickBooks Self-Employed and for three months one of his credit cards was set up twice in the system and was syncing all the transactions twice. It took me hours to go through and figure out what the duplicate transactions were because there’s no reconciliation.

In Self- Employed, all your transactions are all mixed together so transactions can be hard to find. Had my client been doing his bookkeeping himself, he probably wouldn’t have caught this problem. He would have unknowingly been counting these deductions twice. Which means if he was ever audited, that would be an issue. Trust me. You don’t want that and you need reconciliation to make your life easier.

No category customization: This means that you cannot customize your expense or income categories with QuickBooks Self-Employed. If you have a lot of industry specific expenses, there’s no way that you can create a custom category name to put expenses that are alike in one place.

You also can’t categorize your income categories either. Not having this feature would be difficult for small business owners that have multiple income streams. For example, I have diversified income from providing services, selling digital products, doing consulting work, and teaching.

If I were using QuickBooks Self-Employed, I wouldn’t be able to create categories and be able to break down how much money I’m making from each area of my business each month or every year.

For me that would be awful because if I set a goal to make $X in teaching contracts in the first quarter of the year, there would be no way for me to know if I hit my goal or not.  If I can’t do that, what’s the point of having the program?

No invoice customization: While there is digital invoicing, you can’t customize your invoice itself. In this case, you have to be okay with using QuickBooks Self-Employed straight out of the box. If you have a way that you like your invoices to look or fields that you want in your invoices, this version is not going to work for you.

No third-party integrations: This means that you cannot integrate QuickBooks Self-Employed with anything else.

Wait. What? Yep. You heard me right. There’s a lot of apps that integrate with the other three QuickBooks Online versions but they will not integrate with QuickBooks Self-Employed. So again, you need to have a very basic business structure for this to work for you.

No additional reporting: There only three reports you can run in QuickBooks Self-Employed.  One is the Profit & Loss report and the other two reports are for your tax preparer. While there are three reports, there’s only one report that would be usable for you, which is a very basic Profit & Loss.


Who is QuickBooks Self-Employed best for?


It’s really best for contractors with one income stream. So if you have just one income stream and you don’t plan to diversify at all then this will work for you. For example, if you’re a contractor and you’ve had a contract with the same company for 10 years as your only source of income and you’re just are going to continue to have that same contract with this company for 10 years, then you can use QuickBooks Self-Employed.

Who is QuickBooks Self-Employed is not for?


Anyone with multiple income streams: If you have more than one income stream, the software is really not going to help you at all.

Anyone who plans to grow and to diversify their business: Maybe you only have one income stream now, but what happens if you grow your company to offer workshops and retreats?  In that case, the self-employed version would not be able to grow with you. As a rule of thumb, your bookkeeping system should grow with your business.

Anyone with industry specific deductions: If you have a lot of deductions that are specific to your industry and you need to keep track of those deductions, this is not going to work for you. To be completely honest, the category list that comes built into QuickBooks Self-Employed is super random and will probably confuse you.

I will just come right out and say it. I do not think that QuickBooks Self-Employed is a good fit for most business owners. Most of you reading this are self-employed, yes, but you probably also identify as a small business owner and not just a contractor. If you need to get higher level analytics or you’re in it for the long haul with your business, then a QuickBooks Self-Employed is not going to be a good fit for you.


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QuickBooks Simple Start (17:15)

In the QuickBooks universe, QuickBooks Simple Start is the first-tier, base version of QuickBooks Online. It costs $15 per month. 80% of you reading this can start your QuickBooks Online journey with QuickBooks Simple Start and be totally happy and fine with the feature set.  Let’s jump into what this version can do!


What are the features?


Syncs with your bank account

Digital invoicing that you can customize: You can customize the colors to look like your brand and have your logo present. You can decide what fields you want and don’t want to show.  You can make your invoices look really nice and that’s the amazing part about it!

Send invoice reminders for overdue invoices: If somebody doesn’t pay your invoice that you created for them, you can send an email reminder to them with a link to the invoice.  You can also send customer statements so if you need to send statements to your customers for multiple invoices that they have due, you can do it quickly and easily.

Send estimates to your clients to approve or reject: If the client approves your estimate, QuickBooks Simple start can allow you to manually convert it into an invoice without you having to do any typing work. You can also set it to automatically convert all approved estimates into invoices. If you’re somebody that does a lot of estimates in your business then QuickBooks Simple Start will streamline that estimate and invoicing process.

Reconciliation: I already got on my soapbox about why this is so important

Track 1099 contractors: This is a new feature in Simple Start. It used to be that you could only track your contractors in the highest-level version.  QuickBooks Online has introduced a tab that’s called Workers. There are two sections to this tab.  One is called Employees and the other is called Contractors.

You can start tracking your vendors, who are your 1099 contractors, and at the end of the year you can go into that tab and file your 1099s directly to QuickBooks Online. Since filing 1099s directly thought QuickBooks can be expensive, I print an information sheet and then I have all the vendor payments on one page. Once you have that, you can use an additional software to file your 1099s.

Customize your categories: You can have as many categories as you want. You also can have as many subcategories as you want. You can add in assets! You can add in equity accounts! You can add in liabilities! The category world is your oyster!!!! SO MANY CATEGORIES!!!

Import your data from QuickBooks Desktop: If you have any existing QuickBooks files that you or your bookkeeper are using on your computers and you want to switch to QuickBooks Online, it’s a breeze.  It’s super easy and can be done in one click.

Third-party integrations: You can integrate all the third-party apps that are available for QuickBooks Online. QuickBooks Online has an “app store” that has all the apps listed. Some third-party integrations are paid. Some are not. For example, using Square and QuickBooks Online together is a free integration that you wouldn’t be able to use at all with QuickBooks Self-Employed.


What’s not included in QuickBooks Simple Start?


Automatic recurring invoicing: If you have people that you want to invoice the same amount every month on the same day, QuickBooks Simple Start will not support automatic recurring invoicing. You could obviously create the invoice yourself and do it manually, but if you want it to be an automatic process that sends your invoice to the client for you, you’re not going to get that with QuickBooks Simple Start.

Recurring transactions: If you pay $15 per month for Dubsado, you can set it up in QuickBooks to automatically enter the transaction for you. Most people use recurring transactions to monitor cashflow. You can also set it up so that transactions are entered 10 days ahead. Doing this will allow you to monitor your balance, see an upcoming expense, and have time to allocate your funds.

Advanced invoice fields: With the QuickBooks Simple Start version, you cannot add custom fields to your invoices like a job name or project name.

No native time-tracking: There’s a hack for this- keep reading to find out how to get around this!

Billable Expenses: If you have expenses that you pay on behalf of your clients and need to have them reimburse you on an invoice, you can’t automate that in QuickBooks Simple Start.

Vendor Bills:  Vendor bills are for people who buy a lot of stuff from vendors and are given terms. For example, if I were to buy something from a vendor, they could give me 90 days to pay them. Being able to enter vendor bills into QuickBooks allows the business owner to keep up with their cash flow in terms of what outstanding expenses they will need funds for in the next 30, 60, or 90-day time frame.

Class tracking: This is an additional segmentation of your expenses.

Budgeting, location tracking, and inventory tracking are also not available with this version.


Who is this version best for?


QuickBooks Simple Start is best for most small business owners especially if you’re in the early stages of your business. You’re probably not going need all the bells and whistles for your accounting program. If you’re in the early stage of your business, your biggest concern right now is tracking your income and expenses, sending invoices, and being able to run reports to do some basic financial analyses. If this is you, you ‘ll be fine with QuickBooks Simple Start.

Who is this version not for?

Anyone who does a lot of recurring billing: If you have a subscription-based model or retainer clients that you send the same invoice to every month, you’re better off upgrading because the time you’ll save will offset the cost of the upgrade.

Anyone who need custom fields on their invoices: If you have clients with multiple, simultaneous projects and you need to distinguish between the multiple projects on your invoices, you’d have to upgrade to another version to get that capability.

Anyone with vendor bills or terms

Anyone with reimbursable expenses: If you have a business model where you pay for things through your clients and you need them to reimburse you, you’d need to upgrade in order utilize helpful automated features to streamline this for you.

Anyone who manages inventory in their business


What are the hacks?


Ladies and gentlemen, boys and girls, bosses of all ages, here are the hacks for QuickBooks Simple Start!

The Time Tracking Hack

The thing that’s missing in Simple Start that’s the most enticing feature is the native time tracking feature. But- this is easy to hack through a program called T Sheets, which is a time tracking software. T Sheets integrates with QuickBooks Online and has a free version for one user. Using this integration, you track your time and mark your time as billable to customers. T Sheets syncs your customer list and syncs your time into QuickBooks so that the time automatically shows up on your client’s invoice.

The Inventory Hack

To be totally honest I don’t really think that the QuickBooks Online Inventory tracking feature is all that special. Instead of doing inventory tracking in QuickBooks Online, use a POS system that syncs with QuickBooks Online. Now, the most obvious resource for that would be Square because it’s free for you to track your inventory and it syncs with QuickBooks Online.  Your inventory tracking stays in Square and every time you sell something the sales syncs into QuickBooks Online.

The Recurring Invoices Hack

This isn’t really a hack. This is more of a reminder. If you are using something like Dubsado, 17hats, or any sort of digital invoicing system for recurring invoicing, then you don’t really need to rely on that within QuickBooks Online.

For example, I use Dubsado for my invoicing in addition to Intuit’s invoicing. With Dubsado, I can set up automatic recurring invoices for people and also set up automatic billing. If you’re using QuickBooks Online in conjunction with a client management software, you won’t need to deal with upgrading.

Also, Dubsado syncs your invoices with QuickBooks Online. You can set up that integration so you can actually have them talking to each other which saves you the time, energy, and work of having to set up those invoices over and over each month in QuickBooks Simple Start.


QuickBooks Essentials (34:46)

QuickBooks Online Essentials is the second-tier of Intuit’s QuickBooks Online products. It costs $35 per month. This is a pretty big jump which is why I wanted to share those hacks with you because I don’t think having native time tracking or inventory tracking is worth $20 a month when you can do it for free somewhere else.


What are the features?


Let’s talk about the features. Everything that’s in QuickBooks Simple Start is in QuickBooks Online Essentials and QuickBooks Online Plus. You’ll get all of the features I’ve gone over in the lower-tier version plus some super sweet additional features.

Recurring invoices

Recurring transactions: It can be worth it to get recurring transactions. If you really need to pay attention to your cash flow or have a hard time managing it, this feature is key.

Custom invoice fields

Vendor bills: If you track your vendor bills, it’s worth the $15/month upgrade because it’ll help you take control of your cash flow.

Multiple currencies: If you process multiple currencies this version is great for you!


What’s not included in QuickBooks Essentials?


So, here’s what’s not included with QuickBooks Essentials…

Native time tracking: But we don’t care about that because we have our free hack.

Inventory management: Again- who cares?! We’ve got a hack for that.

Reimbursable expenses

Class tracking, budgeting, or location tracking


Who is this version best for?


QuickBooks Online Essentials is best for businesses tracking vendor bills and terms. If that is your business model then this version is really going to be a good fit for you.

This version is also great for people with retainer clients that have a need for recurring billing. Custom fields will also come in handy for anyone who needs or wants to customize their invoices by adding job names and other details. Finally, QuickBooks Essentials is for anyone who is working with multiple currencies.


Who is this version not for?


Anyone with reimbursed expenses: If you have the need to document reimbursable expenses, I’m sorry you’re going to have to move even further up in the suite to get what you want.

Businesses with multiple locations: If you’re a coffee shop or salon owner with multiple locations, you’ll need to move up a level.

Anyone who needs additional segmentation of their income and expenses

Anyone wanting to do high-level budgeting


QuickBooks Plus (40:43)

QuickBooks Plus is the highest tier of QuickBooks Online. This is the big guns version. At $50 per month, it has everything! Remember, this is a big jump from $15 per month and if you’re being seduced by all of these features I’m talking about but you don’t need them, start where you are now and know that you can upgrade as your business grows.


What are the features?


It’s feature time! So, not only do you get everything that you get in Simple Start and Essentials, but you also get even more with this version.

You finally get billable expenses: Yay!  Here’s an example of what you’d need this for. Let’s say that you’re a home organizer and you buy organizing supplies for a client’s home. You put it on your own credit card and then the client reimburses you on your invoice. When that reimbursable expense is downloaded from your bank account, you just click a box that says billable and you assign it to a client.

Later, when you start to make their invoice, a little window will pop up to remind you that you have billable expenses for this client and will give you the option to add it to the invoice. The beauty of this is that you never forget to add these expenses to your invoice.

If this is part of your daily business model, then upgrading is worth it. If you only have five reimbursable expenses a year, don’t worry about it. You can just enter those and manually on the invoice.

Location tracking:  You can assign a location to every income and expense transaction in QuickBooks. This is especially ideal for people who have rental properties or business owners with multiple locations.  If you’d like to know how profitable each location is, location tracking can come to the rescue. After you’ve tracked all of your income and expenses for each location, you can run a Profit & Loss report on each location and even run comparison reports between both locations.

Class tracking: Class tracking is another way to segment your income and expenses in your business. It’s similar and different from location tracking.  Location tracking is really about tracking different locations or rental properties. Class tracking gives you the ability to do any segmentation that you want.

One of the best examples of this is nonprofits.  Nonprofits often want to segment their expenses and know how much they’re spending on operations, fundraising, and mission-driven programs because a lot of grantors want to see this information.  You could document a business meal in a different class. You could assign a business meal to operations because it was charged by taking out a potential board member or assign it to programming because the expense was charged while taking out a participant for an interview about the program.

You can then run a Profit & Loss report based on the classes themselves and compare each class.

Budgeting: I have to admit that this feature is pretty awesome. You can create budgets by pulling the data from your previous year’s profit and loss report. It forces you to start your budget with actual numbers and then you tweak it from there. You can run a budget for the fiscal year, by month, by location and even by class!


Who is this version best for?


QuickBooks Online Plus is best for people with billable expenses. If you have more than 20 billable expenses a month, switch to QuickBooks Plus.

This version is also for people with multiple locations and need to understand the profitability of each business location.

If you need class tracking and additional segmentation of your income this is for you! If you need high-level budgeting for your business and your business is making a quite a bit of money, then you will definitely want this version.


What are the hacks?


The DIY Budget Hack

You can totally DIY your budget. You can definitely create your own business budget. If you were even willing to do this you could enter your actual numbers every single week. If you are interested in creating your own DIY business budget use my spreadsheet. It actually has a place where you could enter your actuals and calculate the differences between your actuals and your budget for that month. It’s really helpful!

If you’re getting into serious budgeting where you have to do department budgeting then you probably just need to upgrade your software. But if it’s just you in your amazing small business and you’d like to make a budget to help yourself out, you’d need to upgrade to QuickBooks Online Plus.

Final Thoughts

Remember. Don’t get distracted and overwhelmed with all the features. Start small with what is most needed and best for your business right now. You can always upgrade. If there are a few things that you really want in version that the other doesn’t have try the hacks and save your cash. Your bank account balance will thank you.

Now that you’ve chosen which version you’re going to roll with, how in the heck are you supposed to set all that up? I’ve put on my superwoman cape and I’ve come to rescue you with my QuickBooks Online Set up Guide! It will help you make sure everything is ready to go when you actually start doing your bookkeeping in QuickBooks instead of trying to do these things as you go because usually it will just turn into a mess. Take advantage of the QuickBooks Set Up Guide. It will be your knight in shining armor.

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