Not sure how to choose between QBO and QBD? Julie DeLong started using Quickbooks desktop many years ago and today primarily uses Quickbooks online, at Backyard Bookkeepers, the virtual bookkeeping and payroll company she founded with one of her best friends. So she is the perfect person to have a discussion about the differences between Quickbooks Online and Quickbooks Desktop.
From the Backyard Bookkeepers website:
At Backyard Bookkeeper, we don’t just offer traditional bookkeeping and payroll services. Our bookkeepers empower clients with valuable financial information about their own businesses. Whether you are a startup with a lot of questions, behind on your books and don’t know where to start, or an experienced business owner who just needs “a couple things done,” we are here to help.
Typically, my conversations with the Accountants and Bookkeepers I’m speaking to fit easily into one of these articles. This conversation was different. Julie has such as wealth of information in the accounting and bookkeeping space, and in understanding how to choose between QBO and QBD, that I not only asked a lot more questions than usual, but because of the depth of Julie’s answers, the article was extremely long. But the information was too good to leave out.
So I decided that the conversation with Julie would be broken into two parts. Enjoy the conversation below, and look out for the next instalment.
Spending more time playing with Quickbooks than Facebook
Eric: Julie, we’ve been speaking to each other for a couple of years now. It’s really a pleasure to hear more about your background. How you got into the accounting and bookkeeping space. And what you’re doing with your current business. To start off with, tell me about what made you get into accounting and bookkeeping? And what led you to your current business venture?
Julie: That’s a fun question. It was kind of an accident how we got into the accounting space. Accounting was not something I ever intended to study or take up as a career. I took a job right out of college that included some bookkeeping. I really fell in love with bookkeeping. Bookkeeping in particular is really interesting. A lot of people think you need maths skills or you need formal training in accounting principles in order to do it. I would say the main prerequisite for being a good bookkeeper is being organized. That ability to organize information and understand how one piece of information affects another. That’s the skill that bookkeepers need.
I really enjoyed working in quickbooks. I started teaching myself. I started taking some accounting courses on my own. I took a couple part time jobs as a bookkeeper. My best friend started making fun of me. She thought I was spending more time playing with quickbooks than I was in Facebook. Facebook was just starting to be a thing. If I like quickbooks that much, why don’t we make some money out of it. That’s how Backyard Bookkeeper was born. In the beginning we had an image of a traditional accounting firm. You have a nice office. And clients come to your office, and you meet with them. At that point we really didn’t understand the direction of the market.
Within about two years of getting started, it became clear that a traditional accounting firm was not a good business model. It was expensive. And also, no-one wanted to come into the office. They just wanted you to get the work done and leave them alone. We also had a key employee threaten to quit, because the commute was too long. When those things happened, we decided we were going to test out this remote arrangement. I think a lot of people have been forced into that model, especially now.
We started experimenting with working remotely. We eventually got rid of the physical office. It turned out to be a much better way to run the business. Learning all the tools. It made us better at communication with clients that maybe weren’t in the same geographical areas as ourselves. Its been really interesting to just observe the trends in the accounting industry. To see how things have been changing over the last couple decades.
Running a virtual bookkeeping business for American businesses
E: You’ve just cleared up a lot of mystery points I had in my mind, because when I first started speaking to you, I remember you were living in some part of the world. I think it was Europe. And then after awhile you were living in America. Now after speaking to you, I understand you are running a virtual bookkeeping business and that allows you to have the freedom to be wherever you want. Are your clients all over the world, or are your clients mainly US based?
J: All of our clients are here in the US, except for one Canadian client. We don’t strictly do anything with income taxes but we are familiar with US laws. Doing a good job of bookkeeping does require at least basic familiarity with how tax laws work. So we haven’t wanted to branch out internationally, at least not yet, so we can provide good service to our existing clients.
How has a virtual bookkeeping business adapted due to Corona
E: Are all your bookkeeping and payroll clients in a specific segment or specific industry? Or do they vary across different industries?
J: We have clients across lots of different industries. Everything from construction to non-profits to retail, both in physical locations and in online retail operations. We do have around a quarter of our business as law firms. A side market that we service there. Law firms have some special bookkeeping requirements because of their trust accounts. These need to be treated differently from normal bank accounts. And so we handle the law firms accounting requirements in different accounting software. Otherwise we do bookkeeping for any kind of business except for publicly traded companies and government entities. Those are the two segments we don’t service.
E: So you said you have a virtual bookkeeping company. Now in times of Corona people are working from home. Doing virtual bookkeeping, do you need to adapt in any way, or does business just carry on as normal for you?
J: Absolutely, there’s been huge adaptation all the time. All of our employees are stay at home parents. That’s great – they’re use to working from home. But most of the children are school age. Suddenly the parents had to work while overseeing home schooling. That was a major adjustment for everybody. If that wasn’t enough stress for our employees, a day or two after everybody started home schooling, in March, Utah, which is where most of our employees are, had a 5.7 percent earthquake. That sent everyone spiraling into a panic.
So it’s been quite stressful because your living circumstances and your daily routines are all totally upended. Everybody has to find ways to be more resilient. To be more flexible. And so even though we already had the setup to be working from home, it has still been a huge adjustment. We’ve done okay though. We’ve continued to provide good service to our clients. But I won’t say it hasn’t been without challenges or without stress.
How to start a virtual bookkeeping business
E: I recently wrote an article on how to start a virtual bookkeeping business. One of the areas that I found interesting is that a lot of the process could become virtual. From document collection to processing to sending the management accounts to the clients. But the one area that still seems to require face to face was meeting the clients for the first time. Before Corona, did you still meet your clients for the first time by having face to face meetings with them? Or was that even done on zoom or by telephone calls?
J: I would say that only in maybe 10% of cases did we actually meet someone in person. When we got started, we got pretty good at the client onboarding process, providing information over the phone to the point where the client felt comfortable enough to get started. So meeting clients in person was not strictly necessary. Although there were a few here in Utah and the Salt Lake area that really wanted to meet someone face to face. However in early March, a couple weeks before the government actually acted, we decided as a company that we were going to suspend all in-person client meetings.
We do have a handful of clients that like the person-to-person interaction, so they were giving us bank statements in person. The bookkeeper would drive by and pick them up, and say hi. So we forced the issue there and got them to give us the bank statements and other financial documentation electronically, whether by scanning them or giving us online access. That actually turned out to be a good move, because within two weeks of making that company policy, we actually had a couple of people get sick. So I’m glad we made that decision. Anyway, since everything happened with Coronavirus, we have utilized Zoom a lot more. Our team leaders have got in the habit of setting up Zoom meetings with the bookkeepers and the clients. To establish the relationships.
I think that has become a lot easier over the last couple months, because so many people are being forced to use video conferencing. They are a lot more comfortable with the idea. So a lot of people that have never used video conferencing before in their lives are being forced to, and so the technical barrier is not as significant as it used to be. It’s now accepted that you just have to do it. People are figuring out how to authorize the program to use the microphone, and to turn on the video, and how to turn off the video. That’s helped a lot.
And it made it easier for us to conduct business virtually even with people that were resistant to that in the past.
Choose between QBO and QBD
E: Lets take a step back to something you said a bit earlier. When you started learning how to become a bookkeeper, you fell in love with Quickbooks and you started playing around with it. Was that Quickbooks online (QBO) or was that Quickbooks desktop (QBD)? And did you try any of the other accounting software, or cloud accounting software, like Freshbooks, or Xero, or Accounting Suite, or any of the other accounting software platforms at that stage? Why specifically Quickbooks?
J: At the time it was Quickbooks Desktop. This was 2007 to 2009 when this was going on. Quickbooks online was an inferior product at that point. Quickbooks desktop was much more robust. Easier to navigate. Faster to use. There was no lag. In Quickbooks online, everytime you entered a transaction you had to wait for the page to refresh. It was clunky to use. I got started personally by using Quickbooks desktop, becoming familiar with that.
I can’t tell you the year, but a few years ago they made significant updates to Quickbooks online, that made it much easier to use. It’s some of the simple things. In the accountant interface to Quickbooks online, you now have the ability to have multiple windows open at once in the same company. So you can have one report open in one tab, and then you have a second tab where you are actually entering some transactions or editing existing transactions. And then you can see how the numbers change.
It’s changes like that, that have made Quickbooks online much easier to use.
Eventually, around five or six years ago, we started experimenting a little in other kinds of software. We do have a handful of clients in Xero. We’ve adapted as our clients have needed it. If a client comes to us, and they’re in Xero, and they want to stay in Xero, then we use Xero. I will confess that Xero is not my favourite. I don’t think that the bank reconciliation functions in Xero are very good.
If a client comes to us, and they’re in Xero, and they want to stay in Xero, then we use Xero.
There are some other accounting software platforms that we have worked with. Zoho just a little bit. And Wave accounting. Sunrise is a newer accounting software platform that just entered the market a year or two ago that’s also up and coming. Those are appropriate for very small businesses that are cash based, money in, money out. You don’t need to worry about too much else.
The other platform that we also got started with maybe four years ago is Cosmolex. That’s the cloud based accounting software that we use for most of our law firms. Some have preferred to stay in Quickbooks, but most of the law firms we work with use Cosmolex.
So software really depends on the features that you need. Do you need inventory tracking? Do you need accounts payable tracking? Do you need something good enough to handle your trust accounts if you are a lawyer? It really depends on the situation.
Which accounting software packages are best
E: So you need to know all these accounting software packages quite in depth? You need to know which accounting software packages are best suited for specific type of customers?
J: I wouldn’t say that you need a lot of depth. I don’t think you need to be an expert in the software to be able to make the decision about what is best. The client usually has a strong opinion about which accounting software to use as well. Not always, but many times they do. Maybe they work with a CPA that refuses to use anything but Quickbooks because that is what they know. Maybe they have POS software, or some other type of software that only integrates with Quickbooks online. So there are some factors like that, that kind of tend to override other factors.
Beyond that, it’s bookkeeper preference, and client preference, and what features are needed. I will say that with some of the other kinds of accounting software, like wave accounting, and sunrise accounting software, for example, those are limited in their features. They can’t do inventory accounting. It is pretty clear when you look at the website which is going to be more appropriate. In what we’re doing, Quickbooks is still the gold standard. It has the most features. As long as you know what you’re doing, Quickbooks is the most versatile.
Quickbooks is still the gold standard. It has the most features. As long as you know what you’re doing, Quickbooks is the most versatile.
Quickbooks desktop and Quickbooks online enhanced
E: Interestingly, I heard a few weeks ago that Quickbooks desktop is still growing in the US, even though Quickbooks online is growing dramatically. Quickbooks desktop has the inventory side, which I still don’t think that QBO includes, at least not to the level of QBD. When do you think QBO is going to be at the same level as QBD is?
J: I don’t know. Maybe never. Maybe the industry will segment a little bit more, and there will be some industries that will prefer to stay in Quickbooks desktop.
Quickbooks online, within the last year, released a more heavy weight version, Quickbooks online enhanced, for $150 per month, that has far more features than Quickbooks online has ever had before. I haven’t played with it very much so I don’t know if the inventory option will compete with what is available in Quickbooks desktop. And the price point is hard for a lot of businesses. That might be the reason that Quickbooks desktop continues to grow.
The idea that you have to have a monthly subscription in order to have access to your software does not appeal to everybody. Intuit has even tried to push Quickbooks desktop towards the subscription model. Pay us a monthly fee and then you can get all the software updates every year. But a lot of people still walk into Office Depot and buy the box. That works for a lot of people. And it does have online features. It still connects to bank feeds. A lot of people are more comfortable using it.
But a lot of people still walk into Office Depot and buy the box
Cost difference between QBO and QBD
E: When I’ve spoken to accountants and bookkeepers in the past, it sounds like cost is one big difference between QBO and QBD. With QBO you have a monthly subscription and pay monthly where with QBD you pay once, and maybe never again. And the other big difference is the manufacturing module. Is there a lot of other big differences between these 2 accounting software packages?
J: Quickbooks online went through two price increases within a year. Quickbooks online plus went from $40 to $70. I think that was a big enough shift that a lot of people were unhappy. I don’t know if people switched back to Quickbooks desktop. Maybe fewer people signed up for the higher price point. I certainly wasn’t happy about it. It is almost double the price. That was disappointing that Intuit had made that choice.
Especially when you look at the other simpler online accounting software’s that price point for Quickbooks online plus is significantly higher. I understand that it has more features. And more people are familiar with Quickbooks. But it still seemed unjustified to me. Cost is the big thing. The manufacturing modules, that is mostly available in Quickbooks enterprise, which blows the cost out of the water. Last time I looked at those prices they were $3000 and up to buy the Quickbooks enterprise versions. So that’s a different discussion.
Quickbooks enterprise version for manufacturing
E: That’s interesting. You’re saying there isn’t that much difference in the functionality between the regular QBD version and your Quickbooks online version. If you want the more enhanced functionality in Quickbooks desktop, you need to then buy the enterprise version which is a lot more expensive.
J: The Quickbooks enterprise version is great for companies that do manufacturing. Where you have to take multiple inventory items, and put them together to create one item to sell. If you’re using Quickbooks to manage that, then that becomes a significant job. That’s where Quickbooks enterprise would come in. The other thing is that some clients are forced into using Quickbooks enterprise because of the amount of data that they have. The number of list items and things like that.
We had one client in that position and he actually hired a third party service to reduce his Quickbooks file size and convert it back into Quickbooks premier format. Once he did that he was happy. He was able to consolidate things into such a degree that he didn’t need the Quickbooks enterprise version anymore.
The discussion with Julie DeLong from Backyard Bookkeeper continues…
E: As I mentioned at the beginning of my discussion with Julie, my questions were long, and her answers detailed, so I decided to make this a two part article. Look out for Part 2, where we’ll discuss more about automated accounting, how to choose QBO vs QBD, how to start a virtual bookkeeping business and a lot more
Do you think Accounting will be the same in 2027?
This is a series that DOKKA is running where we explore the thoughts of Bookkeepers, Accountants, CFO’s & others involved in the Bookkeeping & Accounting space throughout the world.
See some of our previous discussions:
Mary McBlain from McBlain and Davis Accountants – Understanding the Bookkeeping & Accounting industry in the UK
Hossein Dadkhah from DataDrivenCIOs – Factors Accounting companies should consider when dealing with client data
Lisa Cervantez from PureSpeed Lightwave – Why an internal Finance Team chose SAGE 300 as their Accounting Software
Jeffrey Levine from Persofi – Bookkeeping differences between Israel versus the UK
Zane Orton from M-inent – Future of Bookkeeping
Akiva Brett from KB Tax – A South African Tax Practitioner
Julie DeLong from Backyard Bookkeeper – Part 1 – Choose between Quickbooks Online and Quickbooks Desktop
Julie DeLong from Backyard Bookkeeper – Part 2 – Advice from a Virtual Bookkeeping Company
Holly Dunn from Accountable Bean – SAGE versus Intuit
If you have strong opinions on the Bookkeeping & Accounting industry, we’d love to have a discussion with you.