QuickBooks is an accounting software program that allows you to track your business' income and expenses. One of the benefits of using QuickBooks is having access to key financial reports (such as profit and loss) so that you can see the overall health of your business at any time. Having access to these reports makes filing your taxes a lot easier. QuickBooks has been around for almost three decades, and it is the accounting software used by millions of small businesses around the globe.

QuickBooks comes in two formats: software that you can install or download on a desktop computer, and a cloud-based program that you can access from any mobile device or desktop computer with an internet connection.

The cloud-based version, QuickBooks Online (QBO), is available in four editions: Simple Start, Essentials, Plus, and Advanced. The desktop version, QuickBooks Desktop (QBD), also comes in four editions: QuickBooks Mac, Pro, Premier, and Enterprise. We will discuss each of these in detail next.

QuickBooks Online (QBO) comes in four editions:

• Simple Start
• Essentials
• Plus
• Advanced

Each edition varies in terms of the price, the number of users to which you can give access, and the features included.

The following table gives a summary of QBO pricing and features for each edition of QBO:

As you can see from the preceding table, all four editions of QBO include the following features:

• Track income and expenses: Keep track of all sales to customers and expenses paid to vendors.
• Connect bank and credit card accounts: Connect all business bank and credit cards to QBO so transactions automatically download into the software.
• Manage accounts receivable: Invoice customers, enter payments, and stay on top of unpaid invoices.
• Accept online payments: Allow customers to pay their invoices online with a debit/credit card or by wire transfer.
• Send estimates: Create a quote or proposal and email it to prospective clients for approval.
• Track sales tax: Keep track of sales tax collected from customers, submit electronic payments to state and local authorities, and complete required sales tax forms and filings.
• Maximum number of users: With the exception of the Advanced plan, which includes three accountant users, each plan includes two accountant users, plus one or more additional users. For example, you can give a bookkeeper and your certified public accountant (CPA) access to your data.
• Capture and organize receipts: Use your phone or mobile device to snap a photo of a receipt and upload it to QuickBooks. You can also link expense receipts to transactions.
• Mileage tracking: Automatically track miles with your phone's GPS and categorize them as business or personal trips.

The Simple Start plan is the most economical, at $20 per month. It includes one user and two accountants.  The Essentials plan is the next tier and starts at $25 per month. It includes three users and two accountants. Unlike Simple Start, you can track accounts payable (A/P) with the Essentials plan. The Plus plan is $70 per month. It includes five users and two accountants. Unlike the Simple Start and Essentials plans, you can track your inventory with the Plus plan.  The Advanced plan is the top-tier QBO plan. It starts at $150 per month and includes up to 25 users and 3 accountant users.

We will discuss the features of each plan in more detail, and how to choose the right QuickBooks Online version for you, in the next section.

QuickBooks Online is ideal for solopreneurs, freelancers, and mid-to-large-sized businesses with employees and 1099 contractors. 1099 contractors are also known as independent contractors, who you may hire to provide services for your business. Since they are not employees of the business, you must provide a 1099 form at the end of the year to any contractor you have paid $600 or more to in the calendar year.

The needs of your business will determine which edition of QBO is ideal for you. The following provides some additional insight into the ideal businesses for each edition of QBO.

QBO Simple Start is ideal for a freelancer or sole proprietor that sells services only, and no products. You may have employees that you need to pay or 1099 contractors. The majority of your expenses are paid via online banking or wire transfer, so you don't need to write or print checks to pay bills.

Similar to QBO Simple Start, QBO Essentials is ideal for freelancers and sole proprietors that only sell services and no products. You have employees but you do not hire contractors. Unlike QBO Simple Start, you pay most of your bills by writing checks, and you need the ability to keep track of your unpaid bills, also referred to as accounts payable (A/P).

Unlike QBO Simple Start and QBO Essentials, QBO Plus is ideal for small businesses that sell products, since it includes inventory tracking. Similar to QBO Simple Start and QBO Essentials, you can pay employees. QBO Plus also allows you to keep track of payments made to 1099 contractors so that you can complete the required 1099 reporting at the end of the year.

QBO Advanced is ideal for businesses that have more than five users needing access to their data. QBO Advanced is QBO Plus on steroids: it includes all of the features found in QBO Plus, along with some great bonus features, such as on-demand online training for your entire team, and Smart Reporting with Fathom.

The bonus features that you will find in QBO Advanced are as follows:

• Dedicated account team: With a QBO Advanced subscription, you will have access to a team of experts who will learn how your business works in order to answer your questions. They will also provide additional resources that will help you to better manage your business financials.
• QuickBooks training for staff: With QBO Advanced, on-demand online training videos help you and your staff get up to speed on how to use QBO. This training has an annual value of $2,000.
• Smart Reporting with Fathom: With this reporting feature, you can measure profitability, cash flow, and other key performance indicators (KPIs). This feature is not available in any other QBO edition.
• Batch invoices & expenses: Allows you to enter, edit, and email hundreds of invoices, checks, expenses, and bills instead of entering them one by one. 
• Custom user permissions: Provides a deeper level of user permissions that allows you to manage access to sensitive data, such as bank accounts.

For more in-depth information about the features and benefits of QBO Advanced, head over to Chapter 2, QuickBooks Online Advanced. In that chapter, we take a deep dive into all of the features available in the top-tier QBO plan.

Depending on your business and individual circumstances, you should now be able to determine whether you will need QBO Simple Start, Essentials, Plus, or Advanced. It is important to pick the right version for you so that you have access to the appropriate features you will need. Next, we will provide a brief overview of the QuickBooks Desktop product line.

QuickBooks Desktop (QBD) comes in four editions:

• Mac
• Pro
• Premier
• Enterprise

Each edition varies in terms of the price, the number of users to which you can give access, and the features included.

The following table provides a summary of the cost and features included in each edition of QBD:

As you can see from the preceding table, all four editions of QBD include the following features:

• Track income and expenses: Keep track of all sales to customers and expenses paid to vendor suppliers.
• Connect bank and credit card accounts: Connect all business bank and credit cards to QBO so transactions automatically download to the software.
• Manage accounts receivable: Invoice customers, enter payments, and stay on top of unpaid invoices.
• Manage accounts payable: Track unpaid bills, and pay them by check or through online banking before they are due.
• Accept online payments: Allow customers to pay their invoices online with debit/credit card, or through Automated Clearing House (ACH).
• Send estimates: Create a quote or proposal, and email it to prospective clients for approval.
• Track sales tax: Keep track of sales tax collected from customers, submit electronic payments to state and local authorities, and complete required state tax forms and filings.
• Give other users access: Give other users—such as a bookkeeper or an accountant—access to your data.
• Time tracking: Track hours worked by employees and contractors, so you can easily bill customers for completed work.
• Inventory tracking: Track inventory costs and quantities, using the average cost inventory method.
• Pay 1099 contractors: Keep track of payments made to independent contractors, and file the required tax forms at the end of the year.

QuickBooks Mac and Pro versions are priced at $299.95 and are identical when it comes to the features included. If your business falls into one of five industries (nonprofit, manufacturing and wholesale, professional services, contractor, or retail), you should consider choosing QuickBooks Premier, which starts at $499.95.  Finally, if your business has extensive inventory requirements, QuickBooks Enterprise includes mobile inventory barcode scanning and the Enhanced Pick, Pack, and Ship feature that none of the other editions offer.

You now have a better understanding of the QBD product line. This information will go a long way to help you determine which desktop version is right for your business. In the next section, we will go into more detail about what is included in the four QBD versions.

QBD is ideal for small-to-large-sized businesses that sell products or services, have employees and contractors, and are looking for a robust desktop accounting solution. If you have a Mac, QuickBooks for Mac is going to work best for you. For small businesses that use a PC or a Windows computer, you've got three versions to choose from: QuickBooks Pro, Premier, or Enterprise. Let's look at these in more detail.

QuickBooks Mac is ideal for any sized business on an iOS platform that has less than $1 million in annual revenue and doesn't need to give more than three users access to QuickBooks. When it comes to the features included, QuickBooks Mac is almost identical to QuickBooks Pro. You can connect your bank accounts, invoice customers, and pay bills, just like you can in the Pro, Premier, and Enterprise versions. Unfortunately, QuickBooks Mac does not come in industry-specific versions like QuickBooks Premier and Enterprise do.

For 2021, QuickBooks Mac has added a number of new features that you won't find in QuickBooks Pro, Premier, or Enterprise: 

Listed below are the new and improved features included in QuickBooks Mac 2021:

• Automatic Payment Reminders – set reminders for customers when their invoices are due
• Statement e-Payments – send statements with payment links
• Combined Invoice Emails – send multiple invoices to customers in a single email 
• Sales Tax Codes – track sales using specific sales tax codes for out of state, non-profit, and so on
• E-File 1099s – electronic filing of 1099 forms
• Email Templates – save and store multiple email templates
• Credit/Debit Card Refunds – refund merchant credits from within a Credit Memo transaction
• Company File Search – easily find and open company files
• Restore Backup Workflow – a simple to use restore company files wizard

QuickBooks Pro is ideal for a business of any size that is on a Windows platform, has less than $1 million in annual revenue, and does not need more than three user licenses. It includes all of the features found in QuickBooks Mac, plus it includes more than 100 customizable reports. You can also track hours worked by employees and contractors, to bill back customers as work is completed. Unfortunately, QuickBooks Pro does not come in industry-specific versions like the QuickBooks Premier and Enterprise versions do.

QuickBooks Premier is ideal for small-to-medium-sized businesses that fall into one of the following industries:

• Nonprofit
• Manufacturing and wholesale
• Professional services
• Contractor
• Retail

Unlike QuickBooks Mac and Pro, QuickBooks Premier includes a customized chart of accounts, a custom products and services list, and reports customized for businesses that fall into the industries listed above. QuickBooks Premier also allows you to purchase up to five user licenses, and it includes a forecasting tool.