QuickBooks Online vs QuickBooks Self-Employed

How do you know if QuickBooks Online or QuickBooks Self-Employed is the best bookkeeping software for your business?

This is a question we’ve seen asked quite a bit here at Careful Cents — especially since QuickBooks Self-Employed is much cheaper.

When Intuit rolled out QuickBooks Self-Employed (also called QBSE for short), freelancers and independent contractors rejoiced!

There was finally had an easy way to sort business transactions from personal ones, as well as estimate and pay quarterly taxes online with TurboTax Self-Employed.

Something no other tool did at the time.

But while QBSE gets most of the attention from freelancers, QuickBooks Online (or QBO for short) has three other packages that cater to small businesses as well.

In order to accurately answer the question of whether or not you should switch from Quickbooks Online vs. Quickbooks Self-Employed, let’s start with the basics.

Then we’ll dive into an in-depth comparison of QBO vs. QBSE so you can find out which one is right for your small business!

Quickbooks Home

I jumped at the chance to find the best solution to this question! After all, I’ve been using QBSE for almost a year and can’t imagine my business without it!

While doing my research, I found that making the decision to switch to QuickBooks Self-Employed from QuickBooks Online isn’t as simple as it first seems.

It really depends more on your business structure than saving money. And not all freelance businesses will do well on QBSE.

If you’re using QBSE and planning to scale your business next year, you’ll want to keep reading.

What type of business should use QuickBooks Self-Employed?

QuickBooks Self-Employed was created exclusively for freelancers and independent contractors who have a simple business structure. This includes some, but not all, solopreneur businesses.

If you’re reading this, you likely fall into this category.

However, it’s also intended for contractors who work for other entities like Uber and Lyft drivers, and Upwork and Fiverr freelancers.

If you’re a sole-proprietor or single-member LLC who files a Schedule C, along with your personal taxes each year and does not have a complicated accounting structure (have employees or inventory), then the Self-Employed version is perfect for you!

Since QBSE was created exclusively for the simplest of business structures, it does not allow users to manage and pay bills or integrate with e-commerce apps.

What type of business should use QuickBooks Online?

If you intend to grow your business within the next year, possibly hiring team members or employees, or selling digital (or physical) products through e-commerce tools like Square or Shopify, then you should consider one of the three QuickBooks Online packages.

In comparison to QBSE, QBO allows you to integrate with other apps, send custom invoices, track inventory, and more.

Features Comparison: QuickBooks Self Employed vs. QuickBooks Online

Many of Intuit’s family of products have overlapping features, but not all of them will be the best choice for your particular business entity.

Let’s start by comparing the features between QBSE and QBO.

QuickBooks Self-Employed features

As you see, QBSE is a tool for freelancers and solopreneurs who are just getting started with their small business.

It also comes at a very budget-friendly monthly price of just $5 per month (for the first 3 months) — literally half the cost of the QBO Simple Start package.

QBSE - Dashboard

You can send non-customized invoices to clients, manage all your money in one place, and more:

  • Stay on top of quarterly taxes
  • Invite one accountant to help during tax time
  • View, manage, print or download profit and loss reports
  • Manage both personal and business transactions in one place
  • Estimate and pay quarterly taxes from your dashboard
  • Track your business mileage
  • Send non-customized invoices to clients
  • Print out reports for end-of-year tax preparation

Related: Read our in-depth review of QuickBooks Self-Employed.

QuickBooks Online features

QBO - Dashboard

QBO includes a more structured system for business owners who are ready for long-term growth. This bookkeeping software has features like sending estimates, managing multiple bills and vendors, hiring employees, or running multiple budgets.

It comes in three packages:

  • Simple Start – $10/month for 6 months
  • Essentials – $17/month for 6 months
  • Plus – $30/month for 6 months

QBO supports sole proprietor, LLC, partnership, corporation, and nonprofit type small businesses.

1. Simple Start

Some freelancers may need a few more features for their business than what QBSE can offer. If that’s the case, then Simple Start is your best option.

It’s perfect for freelancers who need to track more than just income, expenses, and quarterly taxes. You can integrate e-commerce apps, manage bills, and more:

  • Allows 1 user 2 accountants
  • Track sales tax by month, quarter, semi-annual, or yearly
  • Integrate e-commerce tools like Shopify, WooCommerce, Gumroad, SendOwl, and others
  • Mobile app
  • Import and export data
  • Create customized estimates
  • Create up to 20 different types of business reports (see below)
  • Create custom invoices with your business logo
  • Track sales and expenses
  • Accepting credit cards and payroll capability are add-on features
  • Does not track miles or timekeeping
  • Includes everything offered in the QBSE platform but does not track mileage

2. Essentials

The Essentials package was created for small-to-medium service-based businesses that do not have physical inventory. It allows for multiple users, employee 1099, payroll management, and more:

  • Up to 3 users and 2 accountants
  • Timekeeping – track time and projects
  • Create custom invoices with your business logo
  • Up to 40 different types of business reports (see below)
  • Manage recurring transactions
  • Manage and pay bills, to include the ability to pay later
  • See business trends for your industry
  • Permissions control for other users
  • Get a company snapshot and sales/profits reports
  • Accepting credit cards and payroll capability are add-on features
  • Includes everything from Simple Start but does not track mileage

3. Plus

This package is for businesses with physical inventory and/or multiple brick-and-mortar locations. This one has the most features out of all the QBO packages and is the online version of QuickBooks Desktop Pro.

  • Up to 5 users and 2 accountants
  • Create custom invoices with your business logo
  • Create 65+ types of business reports (see below)
  • Location tracking
  • Class tracking
  • Create and manage budgets
  • Time tracking
  • Purchase orders and inventory management
  • Billing by customer
  • Accepting credit card payments and payroll capability are add-on features
  • Includes everything from Essentials but does not track mileage

Take the Quiz: Just for fun, use this checklist to see which QBO package is right for you.

QuickBooks Online Reports

Depending on which package you’re using, QBO allows you to create many different types of reports so you can spot business trends and make better business decisions.

QBO Manage Multiple Report Types

Price Comparison: QuickBooks Self Employed vs. QuickBooks Online

Intuit’s QuickBooks pricing is a little tricky if you don’t read the fine print so I’m sharing the highlights.

You can try both QuickBooks Self-Employed or one of the QuickBooks Online packages free for 30 days, no credit card required.

If you opt for the free trial when first starting one of these packages, please note that you will not be able to take advantage of the introductory discounted 6-month pricing (see small print).

  • There is no contract, you can cancel at any time
  • QBO Simple Start, Essentials, and Plus come with a 60-day guarantee
  • QBSE comes with a 30-day money-back guarantee
  • The pricing and discounts are different for each package, please read carefully
  • Don’t forget, your subscription is a deductible business expense!

QuickBooks Self-Employed pricing

If you decide to purchase a subscription of QBSE instead of trying the 30-day free trial, you will get 50% off the regular price for 3 months when you first sign up.

If you decide to purchase the QuickBooks Self-Employed and TurboTax Self-Employed bundle without the free trial, you will get 29% off for 3 months.

This is incentive to jump right into a subscription, bypassing the free trial option (fine print: you don’t get the discount if you opt for the free trial first).

QBSE pricing chart 2018 - save 50% for 3 months

  • $5/month for 3 months; $10 per month after that
  • $12/month for 3 months; $17/month after that

The TurboTax Self-Employed bundle which lets you pay quarterly taxes online and automatically transfers your Schedule C information into TurboTax at tax time.

Get a bonus if you’re an Ebates user!

When you sign up and purchase a new subscription of QBSE using your Ebates link, you get $37.50 cash back.

I’m not sure how long this deal will last, but it’s been available since 2017 (please be sure to read the fine print in your Ebates account). Don’t have an Ebates account?

QuickBooks Online pricing

The QBO packages have a different discount structure. If you decide to purchase a subscription instead of trying the 30-day free trial, you will get 30% off the regular price for 6 months when you first sign up.

  • QuickBooks Simple Start – $10/month for 6 months
  • QuickBooks Essentials – $17/month for 6 months
  • QuickBooks Plus – $30/month for 6 months

QuickBooks Online pricing plans 2018

How to make the switch

If you’re ready to move from one of the QB Online packages into QBSE, there are a few things you need to know first.

You won’t be able to transfer your data history into your new account because QBO AND QBSE are considered separate platforms (I know, weird right?!).

This means you’ll have to create a new account.

Because of this, it’s probably best to wait until the New Year to make the switch so you can start fresh.

The same holds true if you want to move from QBSE to QBO Simple Start.
Here’s what you need to do to make the switch:

1. Download all QuickBooks transactions and tax data from your dashboard or reports section and save it to your computer or a separate hard drive.

2. Cancel your subscription the month before you’re ready to start using the new account. You’ll be able to access your information in QuickBooks until that subscription runs out, which is usually 30 days.

3. Create a new account on the QBSE (or QBO) platform. You don’t have to wait until your other subscription is finished.

4. Disconnect your banking apps from your old QuickBooks account and reconnect them with your new account.

What will happen to my data if I stop using QuickBooks Online and move to QuickBooks Self-Employed?

If you decide to downgrade to QBSE from one of the QBO packages, you’ll be able to backup your data on an Excel sheet and save it to your computer. However, you won’t be able to import that information into your new QBSE account.

Once you cancel your current subscription and disconnect from your banks, your QuickBooks Online data will be deleted after 30 days (once your last subscription month runs out).

The good thing about QuickBooks Self-Employed is that you’ll get access to the last 90 days worth of bank transactions. Once you sync your bank accounts and credit cards, it will pull the last 90 days of account history.

You won’t be able to take your QBSE transaction history into your new QBO account but you can download your profit and loss report, tax summary, and tax details to save on your computer.

What if I want to switch from QuickBooks Simple Start to the Essentials Package?

If you decide to upgrade into one of the QBO packages, your QBSE information will be deleted after 30 days.

The great thing about switching between one of the QBO packages though is that this process is super easy. All your data will transfer seamlessly to your new package once you upgrade.

You can move between all three packages (Simple Start, Essentials, Plus) without many problems.

How to cancel your current QuickBooks subscription

In most cases, you should be able to cancel your subscription right from your account. But, this QuickBooks support page that walks you through canceling your subscription.

If you’re in the U.S. and you’d rather talk to someone on the phone, call (800) 624-1377 to speak with a customer service representative.

Tips for switching to QuickBooks Self Employed

Because switching between QBO and QBSE means having to create a new account, it’s best to wait until the New Year to make the switch.

If you decide to switch before the New Year, by default, QBSE will import up to 90 days of bank transactions.

However, if you need to go back more than 90 days QuickBooks has a Web Connect feature that lets you import transactions if your bank allows you to save a file for the date range you need.

Always print out and save a copy of your tax information (including quarterly payments made and Schedule C information) to your computer and keep it safe for at least three years.

That way, if something comes up or an accountant needs more information from you, your tax data is readily available.

The most significant difference between QBSE and QBO is that they are on different platforms. To switch between them, you’ll need to create a new account as data will not move with you.

Are you ready to make the switch?

Choosing to upgrade or downgrade a business tool is not always a matter of going with what’s cheaper. If a tool adds a ton of value to your business by saving you time to do other things, it may just be worth the price.

Take a look at what you plan to do with your business next year. Does QBSE have all the features your business will need without the extra fluff?

If so, it’s time to make the switch!

But, if you’re planning on scaling your business next year, could Simple Start be the better choice as far as value?

Which QuickBooks package is right for your business?

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