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How do you know if Quickbooks Small Business (AKA Quickbooks Online) or Quickbooks Self-Employed is right for you and your company?
If you are in the market for new accounting software, there are quite a few different options. With each one having so many features, however, it can be seriously overwhelming to decide which is best for you.
I mean, what is the difference, and does one of these solutions fit your needs? This is a question that I, as someone who has recently delved into self-employment and entrepreneurship, have had to answer myself.
And it seemed tough.
But don’t worry. In this article, we’ll be taking a look at two of them – QuickBooks Small Business and QuickBooks Self-Employed and breaking it down so it’s easy to see what you need for your business.
These applications have entirely different target markets, but as we’ll see, both of them generally do an excellent job. Neither is perfect, but if perfection is what you seek, you’ll never be satisfied with anything you find.
In this article, we’ll examine these two business accounting solutions to help you decide if they have everything you need – or if they fall short.
History of Quicken
Quicken has been arguably the most well-known name in the accounting industry for years. If the company were a person, it would just barely be a Millennial. The company was founded way back in 1983, one of the first years of the Millennial.
So it won’t come as a surprise that a company that is ancient by tech-world standards has seen many changes throughout its history, with its flagship products being no exception.
Quicken initially launched in 1984, QuickBooks first appeared in 2002, and QuickBooks Online came two years later, in 2004.
Even though this might make you feel old, 2004 isn’t exactly recent history anymore. Even less so in the tech world. Technology changes so fast and Quicken has even more offerings in its product line today.
For instance, the company has realized that with all the different businesses, independent contractors, and freelancers out there, it needed products that could cater to the needs of all of them. Salesforce is another company that more recently started catering to smaller businesses, vs the giant behemoth companies needing a CRM.
Unfortunately, a one-size-fits-all solution is rarely a good one, and Quicken’s products are no exception. Just like not everyone can wear one size of shoe, not everyone can use the same software.
This gave rise not only to different pricing tiers but also to entirely different use cases: small business and self-employed. As a result, we now have QuickBooks Small Business and QuickBooks Self-Employed. They sound super similar, right? Well, they’re definitely not.
QuickBooks Small Business vs. QuickBooks Self-Employed
A self-employed person has different needs than a small business, so, of course, it makes sense to have a solution for each of these situations. The small business option has more features, but it’s also more expensive on a monthly basis.
Each variant also caters to different needs, though, as small businesses and self-employed individuals have different things to worry about on a daily basis.
But does QuickBooks do a good job of separating these needs, and does each software satisfactorily serve each market segment?
QuickBooks Small Business Features
QuickBooks Small Business (also known as QuickBooks Online) is mostly meant for businesses with a few people. Specifically, depending on the plan you choose, you can allow up to 5 users to have access to the “books.”
Just within its small business tier, QuickBooks has four different plans:
- Simple Start
Each one increases in price while including all of the features from the previous tier(s), and then some.
All of these tiers are cloud-based, meaning they can be used anywhere, on any computer. If you’re like me and have multiple devices, this is a huge plus. There are even mobile apps for Apple and Android for when you’re on-the-go.
So next time you’re catching an Uber, you can do your bookkeeping while you ignore the driver completely. I know I’m not the only one who does that!
Simple Start Plan
The Simple Start plan is only good for a single user and has a cost of $12/month. Here are some of the features that price point affords:
Income & Expenses
You can import transactions from any way you take payments, like your bank, credit cards, PayPal, Square, and other sources. It also syncs bank transactions. Such a helpful feature!
Track your income and expenses on paper? What on Earth are you doing? Just kidding, QuickBooks lets you take pictures of your receipts and upload them, or send them by email. Then, they’ll be matched to existing categories (or added to new ones).
Invoicing & Payments
Invoicing is easy, allowing you to accept bank transfers and credit cards directly in the invoice itself.
Sales Tax & Deductions
Both tracking sales tax and managing deductions are easy in QuickBooks. Your taxes will automatically be categorized and can easily be shared with your CPA. Sales tax will be calculated automatically based on where your business is located.
You can easily send estimates to customers, accept signatures, and convert estimates into invoices.
If you travel for business, QuickBooks will let you automatically track business travel by using your phone’s GPS.
The Simple Start plan costs $12/month
As mentioned earlier, each plan includes all of the features of the one below it, plus additional features. Thus, the features above can be considered the “core” features. The Essentials plan, however, adds a few features that may be useful if you have a growing business:
Easily manage bills and create recurring payments. You can also pay multiple vendors simultaneously, and create checks from anywhere.
Up to 3 Users
Yes, one of the main reasons for upgrading to this plan is that you have a growing business. If you (or whoever manages your books) can no longer do so on their own, this tier allows you to have up to 3 users. There is also collaboration and user-level access.
QuickBooks Small Business allows you to track billable hours and automatically create invoices for them. You can either enter hours yourself or give employees protected access which allows them to do so.
Quickbooks Plus Plan
The Plus tier includes all of the features of the tiers below it plus a couple of additional features for businesses that are growing even more.
Up to 5 Users
Like having up to 3 users, except now, you can have up to 5.
Allows you to quickly see project profitability in easy-to-read reports.
Track products and receive alerts when inventory is low. You can also sync with services like Amazon and Shopify, and see which products are popular.
Intuit has added another tier for businesses that are still small but are growing. The Advanced plan lets you have up to 25 users and includes even more features not seen in other plans:
Manage & Pay Bills
20 free bank transfers for two months, plus track multiple vendors and sync payments from anywhere.
Business Analytics & Insights
Reporting & analytics are provided by Fathom and allow you to see both financial and non-financial key performance indicators (KPIs). You can also create presentations and customizable reports, plus see comparisons and benchmarks for your organization.
Batch Invoices & Expenses
Does anyone love invoicing? I know I don’t. Luckily, the Advanced plan lets you save time by batching your invoices and expenses.
Customize Access by Role
Finances are sensitive information; the Advanced plan lets you give custom access to different groups of users. Plus, you can assign work to specific groups and create custom permission for deposits, expense reports, and sales transactions.
Dedicated Account Manager
This plan gives you a Priority Circle membership, which means you have a real person who understands your business and can help find you the right resources. You can call, email, or schedule an appointment with your account manager.
On-Demand Online Training
Want to brush up on your bookkeeping skills? You’ll be covered for that, too. In fact, you and your team will have access to online training that Intuit says is valued at $2,000.
Enhanced Custom Fields
Add additional fields to reports, then search, sort, and filter to find your data more easily. Up to 10 custom fields can be created.
With this feature, you can automate certain tasks such as reminders and triggers to help you save time and improve cash flows.
Small Business Overview
The Small Business plan has a simple, easy-to-use interface with all of the relevant sections you need to manage your business bookkeeping effectively. Each section has a clean layout, with a few at-a-glance reports.
The options you have within the dashboard may vary depending on your plan, but you’ll find everything you need to do your daily bookkeeping here.
When you open your dashboard, you’ll immediately be greeted with reports showing profit & loss, expenses, bank account balances, sales, and invoices. There’s also a search bar to find the feature/section you’re looking for and a settings cog you can use to customize your dashboard.
In the same area, you’ll find a button where you can ask for help as well as talk to the chat bot. You’ll also notice a pencil icon under bank accounts which lets you add/remove accounts.
In the banking section, you’ll find all of your banking information conveniently in one place. That includes not only a summary of transactions, but also different types of accounts: checking, savings, and your credit card. Under each category, you’ll see how much of that balance is reflected in QuickBooks.
You’ll see in which category each expense falls, and update the categories if necessary. In addition, you can add new accounts here, search, or even add transactions manually.
QuickBooks Small Business makes invoicing a breeze. It has several invoice templates and lets you generate invoices. The invoice generator has a number of customizations including your logo, the font and font size, accent color, and which pre-built template you prefer. And it has plenty of fields to be sure all your information is included.
Expenses in Quickbooks
Although QuickBooks automatically syncs with your accounts and pulls in expenses, you do have the option to add expenses manually. When doing so, you’ll select the category where that expense should be filed.
Another option that may be useful (especially when on the go) is mobile expense capture. You can enter expenses from your phone, or even take pictures of your receipts, and QuickBooks will capture the data for you.
QuickBooks includes a wide variety of reports that vary depending on your plan.
Many different metrics are covered, such as A/R, budget, profit/loss, cash flows, and more. Reports are also customizable so you can be sure to only see the information that is relevant to you. Plus, you can quickly pull up the reports you run frequently.
Tracking Your Taxes
Save multiple sales tax rates, plus set default tax rates on a per customer/client basis. QuickBooks also helps you maximize deductions, track sales tax, and prepare 1099 forms.
Desktop and Mobile Apps
QuickBooks has its own app store with dozens of apps to let you do even more in Quickbooks. You’ll find dozens of apps here that help you complete all kinds of tasks, such as making payments, sending invoices, and tracking inventory and expenses. Not all apps are free, but may come with a free trial.
In addition to the pricing above, QuickBooks includes add-ons that can be tacked on to any of its small business plans. The main add-on is payroll; if you bundle it with a QuickBooks plan, you get a 50% discount on the payroll add-on.
There are also three levels of payroll plans, which include:
- Federal & state taxes are filed automatically
- Payroll runs automatically
- Employee benefits, such as worker’s comp and health benefits
Price: $22.50/month (after 50% discount)
- Additional employees for $4/employee/month
- Automatic time tracking
- Same-day direct deposit
- User-level access
Price: $37.50/month (after 50% discount)
- Additional employees for $8/employee/month
- Resolution of filing errors, plus, QuickBooks pays any penalties
- Help with hiring practices and compliance
- Get help from a real payroll professional
Price: $62.50/month (after 50% discount)
- Additional employees for $10/employee/month
It goes without saying that tracking your business finance is important. I know that, when I started self-employment, the process seemed foreboding. So, if you choose, you can have an expert help you set up QuickBooks Small Business for $50.
For that fee, you’ll be able to meet with a certified bookkeeper who will help connect your bank accounts and automate common tasks. Keep in mind that this setup applies to the online version of the application, so they will essentially just be helping you set up your dashboard.
Pros and Cons of Small Business
QuickBooks Small Business is generally revered among its users. If you go looking for QuickBooks Small Business ratings, you might be thrown for a loop by the 2.3/5 rating from ConsumerAffairs. However, note that this rating is specific to the Simple Start plan, and not the software as a whole.
Moreover, this one page, despite painting a rather bleak picture of the software, is more the exception than the rule. After all, nearly every other rating you’ll find rates the application at a 4 out of 5 or higher.
However, some users do have some complaints about the application, citing long wait times for support. In addition, some people much prefer the desktop version of the software.
Pros of Quickbooks
- Robust feature set
- Ease of use
- Lots of customization
- Automatic mile tracking
- Invoicing flexibility
- App integration
- Support sometimes slow to report
- Some users prefer the desktop version
- A bit expensive
Self-employed folks will find a simpler layout in front of them with just the items they need. Of course, there is some overlap as well. But, as expected, there is more emphasis on items like taxes, invoices, and miles.
The dashboard within Quicken Self-Employed doesn’t have quite as many items as the Quicken Small Business dashboard, and it puts more emphasis on the needs of self-employed individuals. As usual, you’ll see several reports that give you an at-a-glance view of how you’re doing financially.
At the top of this report, you can quickly see your business income, spending, and business profit. Below it, you’ll see a running log of all of the transactions related to your business. Transactions can be filtered by type, account, and date range.
Within the log, you’ll see the date, transaction description, amount, type, and category of the transaction. You can also search your transactions if you need to find a specific item.
Tracking Your Milage
Under Miles, you’ll see a number of items that will prove useful if you often travel for business. You immediately see the dollar amount of your mileage deduction has well as your cents per mile. In addition, you have the option to track mileage automatically using the mobile app with your phone’s GPS.
The ability to track miles automatically is an incredibly nice feature. No more adding miles manually. Deductions are based on the suggested IRS rates.
The ease with which you are able to track your business taxes is one of the best features about Quicken Self-Employed. Because you are tracking all of your business expenses within the application, QuickBooks will automatically tell you how much you’re eligible to deduct. This includes expeneses such as home office, vehicle, and general business expenses.
In addition, you’ll see your taxes broken down by quarter, when your quarterly estimated taxes are due, and your projected annual taxable profit. If you have one of the tax bundles, you can also pay quarterly taxes online directly from QuickBooks by using the “Pay now” button.
This is my personal favorite section. You (or your accountant) can setup templates for reports that you can run at any time. This is great for profit and loss statements and helping you see how much actual profit you’ve brought in after taking expenses into account.
The reports section lets you see several reports to help you better grasp your business finances. The reports you see above are all of the reports available: mileage log, profit and loss, receipts, tax summary, and tax details. You can also customize the date range for each report before downloading it.
Quickbooks has great functionality for invoicing clients.
- Recurring Payments – You can set up recurring payments so you don’t have to remember to send an invoice for everything.
- You can turn off credit card payments – this helps you save money on transaction fees. If a client really wants to use a card, they’ll let you know and you can turn it on later.
- Clients can save payment methods to use again – Your clients can save their bank account or card number to their online account so they don’t have to enter it every time they go to pay you.
Invoicing is not nearly as robust in QuickBooks Self-Employed as it is in QuickBooks Small Business, but it still gets the job done. They aren’t customizable and there is no template generator, nor are there multiple templates to choose from.
However, you are still able to add all of the relevant information and add a note for your clients. This is a great option for those of you just getting started with invoicing clients.
Quickbooks Self-Employed Features
Quicken has a completely separate product for those who are self-employed. Like its small business plans, it also has three tiers for self-employed individuals, all with different price points and features. In this section, we’ll cover QuickBooks Self-Employed (QBSE) features and how they differ.
While QuickBooks Self-Employed also has three price points, they are different from QuickBooks Small Business. In this case, the tiers are:
- Self-Employed Tax Bundle
- Self-Employed Live Tax Bundle
We can already see how Self-Employed might be different.
As expected, the basic tier, Self-Employed, has everything self-employed people need when they are first starting out. Here’s what it allows you to do:
Separate Business and Personal Expenses: I know that when I first ventured into self-employment, this was a headache for me. It’s very important to keep the two separate come tax time, and QuickBooks lets you do just that. You can easily import transactions from your bank, credit card, PayPal, Square, and other sources, and keep them separate.
Automatic Mileage Tracking: Growing a business often involves a significant amount of travel. You can track your business mileage automatically by using your phone’s GPS, and, according to QuickBooks, find 45% more deductions on average.
Send Invoices on the Go: Specifically, you can send invoices right from your phone – no need to sit down at a computer every time you need to send one. Plus, with online payments, you can get paid more quickly.
Tax Optimization: QuickBooks helps you maximize Schedule C deductions and estimate quarterly taxes automatically.
Self-Employed Tax Bundle
As you can probably guess, the additional features in this plan are all about further optimizing your taxes. In addition to the tax features you get with the “regular” self-employed plan, you’ll also have these features:
Pay Quarterly Taxes Directly from QuickBooks: No worrying about having to calculate taxes, then pay them separately, elsewhere. Tax Bundle lets you do so directly in QuickBooks.
Easily Transfer into TurboTax: If you prefer to prepare your taxes in TurboTax, that’s not a problem if you have the Self-Employed Tax Bundle. It integrates with TurboTax so preparing your taxes there is a breeze.
Simplified State and Federal Filing: When you have the Tax Bundle, there’s no need to fill out separate tax forms for state and federal returns. Fill out one form and, if you choose, opt for direct deposit for faster refunds.
Self-Employed Live Tax Bundle
When the going gets tough, sometimes nothing beats talking to a real person. And that is exactly what you get with the Self-Employed Live Tax Bundle.
Talk to Real CPAs: With this bundle, you can get answers from real CPAs, on-demand. CPAs have 15 years of experience and will review your return line-by-line before you file.
Unlimited Help: There’s no limit to how often you can get help, and it’s available year-round.
Self-Employed Pros and Cons
Like QuickBooks Small Business, QBSE is well-received by many users. One user on TrustRadius said, “If you’re a freelancer or solopreneur, Quickbooks for Self-Employed is a must.”
Overall, the software scores an 8.8/10 on this platform, with users citing its expense tracking, income, and tax tracking being its strong points.
Of course, despite its pros, QBSE isn’t perfect. Some users found learning the software daunting if they hadn’t used it previously, and others found the QuickBooks site to be slow and/or glitchy.
In addition, limited integration and lack of invoice customization are pain points for some. And a major pitfall is that it lacks support for filing state taxes.
Overall, ratings for the application are overwhelmingly positive, with it also receiving a 4/5 or 8/10 or better, depending on the rating system.
- Easily track expenses, income, and taxes
- Great for freelancers
- TurboTax integration
- No invoice customization
- Can’t integrate apps like Mint and TripIt
- Some users find it has a steep learning curve
How Much Does QuickBooks Cost?
Pricing for QuickBooks Small Business vs. QuickBooks Self-Employed is fairly straightforward; each has three pricing tiers. Here is a quick table that compares the pricing tiers of each:
|QuickBooks Small Business
|QuickBooks Self Employed
Who is QuickBooks For?
As implied by the products mentioned here, QuickBooks is meant primarily for self-employed individuals and for small businesses that need up to 5 users doing the bookkeeping. That said, Intuit has recently added an Advanced plan which is suitable for up to 25 users.
In either case, QuickBooks is right for you if you want a complete solution that lets you handle all of your business finances in one place. It’s never fun having to piece together a bunch of disjointed solutions, and QuickBooks eliminates the need to do so.
Which QuickBooks Version Do I Need?
Choosing the first version of QuickBooks generally depends on the type of business you run. For instance, those who provide contract services directly to clients will be best suited to QuickBooks Self-Employed. On the other hand, those who have their own business with a few employees should opt for a Small Business plan.
Beyond that, choosing a plan comes down to your individual needs (and your budget). Are you self-employed but struggle with taxes? You might want to go for one of the tax bundles. I know taxes are definitely not my forte!
The Small Business plans, on the other hand, are meant to scale to the needs of a growing business. When you are first starting out, the Simple Start plan might be perfect for you. As your business grows (as well as your number of employees), the Essentials and Plus plans will probably make your life a whole lot easier.
Wrapping Up: QuickBooks Small Business vs. QuickBooks Self-Employed
Whether you are a small business owner or you’re flying solo, there’s a pretty good chance QuickBooks will do most, if not all, of the things you need it to do.
Indeed, while there are a few free solutions out there, the idea that you get what you pay is true when it comes to bookkeeping. When I first started doing my own bookkeeping, I looked for free products because I wasn’t making a lot of money. However, that turned out to not be the best move.
Sure, it’s always good to cut costs, but sometimes, shelling out some cash is the right move.
QuickBooks Small Business (AKA QuickBooks Online) shines as one of the best overall bookkeeping solutions for small business owners. It has a ton of features, highly customizable invoices, and excellent app integration. Support can be slow at times (though it now has a chat bot), and some users found the application to be a bit slow or glitchy.
For those trying their hand at self-employment, QuickBooks Self-Employed (QBSE) does an excellent job, especially if you pay for a subscription for the tax bundle, which makes taxes exceptionally easy. As well, it seamlessly integrates with TurboTax if you choose to file that way. However, keep in mind that state filing is not supported in QBSE.
While QuickBooks serves two completely different markets with these two software suites, both are excellent overall. If you decide to take the plunge, be sure to pay close attention to pricing, as Intuit currently has limited-time pricing that should increase in the near future.
In addition, there are free trials for both Small Business and Self-Employed, so you can always try it and see if you like it before fulling committing. Give it a whirl and let me know what you think!