Back in April, Intuit began rolling out an update for their QuickBooks Online subscription plans’ terms. In the new update, the Simple Start, Essentials, and Plus plans now have a maximum number of classes, locations, chart of accounts entries, and users.
As a result, users raised their frustrations on both social media and on the QuickBooks’ online forums. One user goes as far as calling this update as an ‘unnecessary way to bilk users out of more money’. On the other hand, according to Intuit, only 5 percent of QuickBooks Online users are above the usage threshold.
If you’re one of the small-to-medium businesses or start-ups that used QuickBooks Online to manage your accounting, it’s highly likely that you’ve been affected by this change. If you haven't felt these changes in your software, there's also an explanation behind that.
QuickBooks Online's Update
To give you a better look, here are the most recent updates in QuickBooks Online’s plan limits:
As you can see, only active accounts, classes, and locations count towards the limit. The user limits on the other hand, count pending invites that you’ve sent, until they're automatically removed after a 90-day period.
What does this mean for you?
If you’re currently beyond the limits, you can continue using QuickBooks Online as you usually do. However, this means that you will no longer be able to add to what you currently have.
Despite the flak that Intuit has taken from their users, they pushed through with the update as it was necessary for their clients to grow alongside their product. As Intuit explains it, they are adding these limits to make sure that as their customers’ businesses grow, the version of QuickBooks that customers use is the one that best fits their business size; with the necessary tools needed to get deeper insights, save time, and be more productive.
In essence, Intuit wants their QuickBooks Online users—especially those directly affected by user limits—to upgrade to plans that fit their needs; whether this is one with no limits or a completely different software altogether.
Ways to Maximize QuickBooks Online Utilization
Now that the update has been implemented, you might be wondering if there is anything you can you do. Especially if you’ve already hit the limit and would still like to add more classes or location. Well, there is.
You can clean up your books and stay under limits. To do this, there are four steps you’ll need to take according to Intuit:
- Check Usage
You should periodically check the new Usage Tab:
- Select the Gear icon on the Toolbar.
- Under Account & Settings, select Usage.
- From here, you can see exactly just home many Billable Users, Chart of Accounts, Classes, and Locations you currently have and see which ones are over the limits.
- Manage Billable Users
Take note that only “billable” users count toward the usage limit. First, you must be an Accountant user, Master administrator or Company administrator in order to add, delete, or change a user’s access. For audit log integrity, it is best to delete the out-going users then add a new users.
- Manage the Chart of Accounts
QuickBooks Online allows you to “hide” or “make inactive” accounts that are not in use. When an account is inactive, that account does not count against usage limits.
You can review the Chart of Accounts to make sure there are no unnecessary or duplicated categories. If you find duplicated categories, you can merge the two into one.
- Manage Classes and Locations
To add, delete, and modify classes or locations, you must be an Accountant User, Master Administrator, Company Administrator or the appropriate Custom User access. Managing these lists is quite easy. If you need to make changes, navigate to GEAR > Lists > All Lists.
QuickBooks Online Pros and Cons
Since its launch in 2012, QuickBooks Online has grown to 2.2 million users worldwide. The software has seen some significant changes and advancements, with one of the most recent being a long-awaited project management feature.
However, some disadvantages with using QuickBooks Online include navigational difficulties, a somewhat steep learning curve, and, at times, drawn-out support waiting time. These reasons—along with the recent changes with the user limits—make it a costly choice for some smaller businesses.
Despite the issues, QuickBooks Online has some great things going for it: powerful reporting, customizable invoices, inventory capabilities, multiple currencies, and nearly 600 integrations.
There are several features offered by QuickBooks Online that you can’t get with the more traditional, desktop version of QuickBooks: automatic sales receipts, split transactions, scheduled invoices, and location and class categories. Many customers are also convinced that QuickBooks Online’s mobile functionality is worth the upgrade.
Lastly, despite the minor navigational difficulties, the online version is still much easier to learn and use than its desktop counterpart.
Things to Consider Before You Switch
Before making your next move, it's important to evaluate your options and stack them against what you currently enjoy in QuickBooks Online. You might have started your company with QuickBooks and would like to stick with the platform for as long as you can. Loyalty is not a bad thing and a simple upgrade wouldn't hurt your business.
If this is you, then you can choose to upgrade to the 'Advanced' version of QuickBooks Online which has no limit on classes, locations, and chart of accounts. Alternatively, you can also consider switching to other Quickbooks offers like the desktop version. While not as mobile as QuickBooks Online, in terms of managing large amounts of inventory and job costing, the desktop version is a great accounting option for retail stores.
However, keep in mind that the pricing for QuickBooks Desktop is different than QuickBooks Online, where the former is paid in a one-off transaction ranging $299.95 (Pro) up to $1155 (Enterprise). Another consideration is that there are a number of features supported by QuickBooks Online that you can’t find in any version of QuickBooks Desktop, such as:
- Automatically scheduling and sending transactions
- Attaching documents, images, signatures & more to transactions through mobile and desktop
- An audit log to review actions and track changes over time
- Tracking by location in addition to (or instead of) by class with multiple location labels
- Relabeling your customers with seven additional label options
- Automatic nightly bank transaction sync with undo option
- Custom banking rules by dollar value, percentage, class, and location
- Auto-add bank rule option
- Unlimited time tracking
- Unlimited reports-only users
- Delayed charges and delayed credits to schedule future transactions
- Journal entries with multiple AR/AP lines
- Multiple budgets per fiscal year
- Management reports create presentation-ready packages of reports
Lastly, you may consider leaving Quickbooks and switch to one of its competitors. One viable candidate for your next accounting software would be Xero.
Much like QuickBooks Online, Xero is a cloud-based, internet-hosted business accounting software option. It's also offered in monthly subscription tiered plans which ranges from $9 to $60 a monthly—slightly lower than what QuickBooks Online is offering. Do take note that QuickBooks Online is currently offering a 50% discount on their plans. What Xero lacks the mobile functionality that QuickBooks Online thrives at. It's pretty much like QuickBooks Desktop but is paid through monthly.
A Time for Change
A lot of QuickBooks Online competitors, like Xero and even QuickBooks Desktop, have yet to reach the ease-of-use and mobility that QuickBooks Online offers. The software remains to have an obvious advantage and is continuously growing, despite the numerous criticisms it’s been receiving since the update on limits rolled out.
Whether you decide to keep using your current plan or choose a QuickBooks Online competitor is totally up to you. Change is, after all, the one constant in the universe, and this update on QuickBooks Online usage limits may just be the next push you need for your business to grow.
Here at Sweet, we have partnered with Intuit and created robust integrations with Quickbooks Enterprise and Intuit’s other Desktop-based accounting products, so that you can use them with our highly rated B2B eCommerce portal and inventory software. To find out how we can help your business with implementing QuickBooks, start your free trial today.