Quick Books Online Conversion
We recently did our first conversion of a client from Quick Books Desktop (QBD) to Quick Books Online (QBO). With only a couple of hitches, it went off pretty well.
Our client is a building contractor with 8 employees. The in house bookkeeper has a low to moderate skill level. The client was using all the functionality of QBD including payroll and job costing and wanted to retain all functions after conversion.
Licensing was quick and easy. A telephone call to QB sales with the credit card information was all it took and we were up and running.
Uploading the QBD data file to QBO was intuitive. It only took a few minutes and all historical data was intact. Payroll was the only tricky part of the conversion. You need to enter some employee information (such as date of birth) manually. Also, the year-to-date payroll and source deductions information does not come across in the conversion. Make sure you have the year-to-date employee information from the QBD file handy.
We also ran into problems with the province of employment (default was Ontario) and removing inactive employees but Technical Support got us sorted out and on our way painlessly.
The screen shots in QBO are significantly different than the bookkeeper was used to in QBD. And the commands are set up quite a bit differently. So the bookkeeper had to go through a bit of a learning curve getting used to what he was looking at and how to do things in the program. However, once that learning curve has been overcome, we find that QBO gives you the same basic functionality as QBD but in a hugely simplified way. The navigation is good and two mouse clicks gets you almost anywhere you want to go in the program
Customer invoicing is slick. It is easy to create and email invoices to clients. If you have emailed the invoice to the customer, the accounts receivable system shows you whether the customer has looked at the invoice. And receiving payments against invoices is much easier than with QBD.
The accounts payable and bill payment systems were easy for the bookkeeper to learn on his own without my help. As were the general journal and bank reconciliation features.
My only caveats are with the payroll and job costing systems.
The payroll system is a lot less flexible than QBD. You can’t over-ride employee deductions or process employee advances without source deductions. QBO technical support counters that this is appropriate because the source deduction tables are established by statute and payroll advances without source deductions are not “technically” correct. But that ignores the practical reality that some clients still pay advances and manually adjust their deductions. We did run into a problem being unable to enter a manual payroll cheque issued by the owner. Technical support admonished me and entered it off-line.
If it is important for the client to manually override automatic deductions or issue mid-month payroll advances without deductions, then I would suggest staying away from the payroll module. On the other hand, this might be an opportunity to train the client in proper payroll accounting as we have done in this case.
QBO does not allocate payroll expenses to jobs. In QBD we entered the employees’ time and QB did the project allocation. In QBO, we are entering the time but it does not automatically allocate the payroll expense to the job. QBO technical support confirmed that this is the case but was unable to provide an estimate of when this functionality will be developed. We have created an Excel solution for payroll allocation but that is taking an extra hour every pay period to prepare.
Therefore, I do not recommend for QBO for contractors who require job costing unless they have the internal accounting horsepower to manually calculate and journalize the payroll allocation.
Finally, the part I like best is that QBO allows the client to invite their accountant (myself) to collaborate on the file. As a QBO Accountant, I can look on-line at what is happening in my client’s general ledger. This was especially helpful during the training phase as I could collaborate with the bookkeeper from my office instead of going out to the client’s premises to resolve minor training issues. Also, my office is doing the payroll job cost allocation for the client now so it is really handy to have the product online. And we can now eliminate the need for manual data transfer at year end.
Overall, I have no hesitation recommending QBO to our clients.
Written by Doug Johnstone, CA, CPA