QuickBooks Online is the market leading cloud accounting software in the USA for SMEs. They’re now a big player in the UK market too.  We take a look at the main features.

QuickBooks Online (“QBO”) from Intuit has been heavily marketing in the UK recently, with a strong presence at accountancy trade show Accountex, lots of internet, radio and TV advertising, and a reportedly costly sponsorship of Premiership titans Aston Villa FC. (Remember to update – Ed.)

OK, so you can’t plan for everything.

But what does QBO actually offer?  Let’s get in to it…

Give Me The Headlines

 

A market leading cloud accounting platform in the US, now with a strong presence in UK.  Provides easy accounting to small business owners.
Who’s It For?

Interestingly, Intuit have recently signed a partnership deal with TaxAssist and QBO will be the cloud accounting solution exclusively recommended to TaxAssist’s clients going forward. Most of TaxAssist customers are at the smaller end of the SME market, so this deal suggests Intuit are using QBO to target this segment, though many features of QBO are suited to growing up to mid-sized SMEs.

In fact, although QBO has a version that is aimed at freelancers and sole traders, it also has (for an additional cost) versions that should, along with the add-on apps that are available, cater for larger businesses through to a turnover of around £1m.

OK, Give Me More Detail

Before we proceed, relevant disclosures. We are a certified Silver Pro-Advisor for QBO. However, at the heart of our service is the commitment always to provide impartial and tailored advice on all the relevant products in the market. We only recommend products we believe are suitable for our customers’ requirements, and not just because it’s one of our platform partners.

So let’s take a look at those features.

What Does It Cost?

The pricing is dependent upon what type of business you are, the number of users and the level of features that you require.

  • The Freelancer / Sole Trader package for 1 user is only £6 per month.
  • The most basic Ltd company package, called Simple Start, again for 1 user is £7 per month.
  • The Essentials package is £15 per month and offers more features than the Simple Start package and 3 users.
  • The fully comprehensive option which allows 5 users is the Plus package at £25 per month.

Payroll costs an additional £1 per month per employee.

The pricing appears very competitive to us.  Recently QBO have been having more sales than a sofa shop reducing the price further usually for an initial period to get you signed up.

A summary of current pricing and features is available HERE.

You probably won’t be surprised to hear that we strongly recommend you subscribe to QBO (or indeed any other package) through your accountant.  This will ensure you receive the appropriate support, accountancy advice, tax filing and associated subscriptions to automated book-keeping and other add-ons.  If you don’t yet have an accountant, details of our own services can be found HERE.

Core Accounting

LEDGER

QBO has at its core a fully modifiable chart of accounts and you can also input journal entries. For both these features we’d recommend you take some care before diving in and, unless accounting is your skill, turn to your accountant for assistance in this area (of course we would say that, wouldn’t we?).  Accruals and prepayment are dealt with too.

SALES & PURCHASES

When dealing with customers you can provide quotes which can be monitored, declined or accepted and converted to invoices.

QBO has standard sales invoice templates that can then be personalised ans this ensures the invoices show everything they are meant to – but it can still look the way you want it to.

Discounts can be added as a separate line item, or can be automatically calculated as a discount on the whole invoice, though you can’t automatically do discounts on individual line items. This may not initially seem a big deal but, for example, it makes it more difficult to give discount on goods whilst charging for delivery in full. One area we think could do with some improvement.

QBO can produce recurring invoices to the same customer, which is great if you have a customer subscribed to a product or service each month, though it can’t so easily produce multiple invoices of the same product to different customers.

With Essentials and Plus packages QBO allows the production of foreign currency sales invoices and deals with foreign currency purchases and bank accounts too.

QBO has recently closed down a feature which would enable you to accept online payments from your customers (and we thought the 2.25% charge did seem too high). We think this ties in with the opening up of the eco-system to third-party applications – something which Xero has embraced more readily – and this is a sensible move as most businesses, we feel, would prefer to choose their own payment processing methods and integrate these into the accounting platform.

You can issue purchase orders on the system, and it also deals with expenses, general purchases, payment reminders, credit notes and repeat purchases. When it comes to making payments QBO can assist with payment reminders, schedule payments and batch payments.

A couple of things QBO doesn’t have: functionality for simple automated chasing of invoices (some rivals do offer basic auto-chasing emails), and workflow for approving transactions – for larger businesses, this can be a trigger point for starting to consider a more comprehensive accounting or ERP system.  It doesn’t deal with CIS and workarounds are required – though to be fair we haven’t seen a decent CIS solution on any of the major platforms so this is not unique.

OTHER

You can record fixed assets and schedule your recurring depreciation chargers easily enough on QBO, though an asset register isn’t a core feature. If you’re adding or disposing of assets regularly, you’ll need an add-on (or, horror of horrors, a good spreadsheet).

Banking

QBO receives bank feeds from almost all UK banks. These appear to be free (some rivals such as Xero charge for some direct feeds).  Some feeds update on request, some automatically. If you don’t want to use direct feeds, or your bank isn’t catered for, then you can import your transactions through a trusty CSV file.

As with most cloud accounting packages, transactions are allocated as the bank reconciliation is performed. QBO makes this nice and easy, and we really like the user experience around this part. QBO suggests allocations for transactions and learns from previous entries. It also allows you to set up rules so that all transactions with a certain supplier, say, go to a certain code. Whilst this works very well, we still think Xero is marginally ahead and gets a narrow gold to QBO’s silver in the Reconciliation Olympics.

Reporting

In our opinion the most important feature of cloud accounting software is the reporting.  If the business’s financial data can be quickly collated, understood and interpreted, the business can operate better and ultimately more profitably.

One of QBO’s biggest strengths is in the reporting.  It has a large selection of customisable reports, significantly ahead of many rivals.  Export of these reports is available to CSV for further revision if required.

In our Xero blog we noted that Xero’s reporting capability is quickly catching up with QBO. This is true, and there’s not so much between them now, but if we were going to pick we would say that QBO still has the edge.

Support

There is a large searchable knowledge base with help articles – sometimes difficult to navigate, but it’s all there. There are some training videos available but we’d probably not be the first to observe that the production quality and voiceovers are not top notch. Maybe we have been spoiled by some of the TED-like rockstar videos coming out from Xero these days…

We like to talk things through when we get stuck and QBO has a great phone support available 8am – 8pm on working days. A great feature is Live Chat, which is available 9am – 5:30pm on working days, and we use it ourselves almost immediately we need help. The knowledgeable guides on the other side of the chat take us through exactly what we need to do much quicker than we could ever find it on the knowledge base articles.

Payroll

QBO has payroll functionality – strictly speaking, it is tightly integrated with Paysuite, a separate cloud-based payroll platform which Intuit bought in 2014. The additional cost for payroll is £1 per month per employee.

As it originates from a specialist standalone payroll platform, payroll on QBO is actually much better than on many of its cloud accounting rivals who really only deal with simple payrolls.  QBO of course calculates everyday pay and tax and makes the required reports to HMRC, but it can also deal with specialist adjustments such as redundancy, sick pay or maternity pay where other rivals require manual calculation and input.

QBO allows you to run several payrolls for your business be they monthly, weekly, or fortnightly. Hourly paid employees can submit timesheets and QBO also can monitors holiday requests.

Tax

QBO makes it easy to calculate and complete VAT returns.  When it comes to filing with HMRC you still need to copy the data from QBO form and paste it into HMRC form – sort that out! Rivals such as FreeAgent and Xero integrate this final step and allow filing of VAT returns at the click of a mouse.

With Sole Trader package you get an ongoing self-assessment estimate, useful to make sure you don’t have an unexpected bill at the end of the year.

Inventory

On the Plus package QBO has a basic inventory management where the value and quantity of inventory can be tracked (on a FIFO basis). In line with other cloud accounting platforms at this level, it doesn’t deal with manufactured goods or provide full inventory management (eg where stock is, low inventory warnings, optimal buying indicators, track individual items, etc), and you’d need a specialist add-on for this.

Other

QBO have a great mobile app which is more limited in functionality than the main site but developing all the time. We haven’t got the space to go into great detail here – maybe one for another blog.

As we alluded to earlier, Intuit have begun to recognise that there’s a world of oppotunity out there beyond their own firewall and there is a large and growing ecosystem of add-ons for QBO. Those of you at Accountex 2016 may have seen that this was one area QBO were keen to push with visitors. Just a note of advice though: when you’re looking through the app store, make sure you’re not looking at USA add-ons that aren’t localised for the UK.

What it doesn’t do

Nobody’s perfect, right?  Well there are areas that even a comprehensive cloud accounting platform like QBO has not prioritised and we think could be developed further.  We’ve noted some of them above and think QBO should look at workflow first. We also think that, along with Xero, a rounded accounting platform at this level should have the function to calculate, issue and minute dividends – something a lot of small business owners need to do as a routine.

What’s coming next

Intuit are continuing to heavily market QBO both with adverts and discounts. The discounts are great at the moment. Intuit are also keen to improve the number of add-ons. For example GoCardless, a leading money collection platform, has recently announced a Beta integration with QBO. The app store is also grouping recommended apps together based on industry to try and assist you finding the right add-ons for your business – a nice touch.

We’ll update this blog post periodically to reflect the latest position (latest version: August 2016).

U

In a Nutshell

QBO is the biggest selling cloud accounting platform in the world with an impressively comprehensive offering. There are some areas of development required, but there are many positives with great user interface and experience, excellent reporting and payroll equal to specialist software.

A superb cloud accounting platform for mid-sized SMEs.


About Aiteo Consulting

We support motivated career professionals, start-ups and scale-ups by handling everything to do with accounting, finance and tax. You develop your business while we take care of the numbers. Get in touch today!