Migrating to QuickBooks Online

Regardless of whether you are currently using another form of accounting software or spreadsheets to manage the books for your business, you will need to gather a few key documents and bits of information to migrate over to QuickBooks Online (QBO), a list of which we gave you at the start of the previous chapter. In addition, the date on which you decide to start implementing QuickBooks will also determine what information is required for a smooth migration. Providing all of the information required will ensure that QuickBooks is properly set up prior to you using it to track your business income and expenses. Otherwise, you could encounter inaccurate and unreliable financial statements, which will make it hard to know your business’ overall health and make filing taxes difficult.

In this chapter, we will help you determine if QBO is right for your business and discuss questions you need to answer before conversion regarding how you will run...

Deciding if QuickBooks Online is right for your business

It’s important to make sure that moving your business to QBO is the right thing to do. While QuickBooks Online is ideal for many businesses, if one or more of the following is true about your business, you may want to reconsider:

• Multiple businesses: If you have more than one business to manage, you need to know that you will need to purchase a separate QBO subscription plan for each business that has its own federal tax identification number. For example, let’s say I have a tax preparation business and I have a few luxury properties that I rent on Airbnb. These are two separate businesses, which means I would need to purchase two QBO plans. The good news is you can easily create a new QBO account within an existing account and simply toggle between the two as opposed to having two separate logins.
• Comprehensive inventory accounting requirements: If your business manufactures products that require...

Questions to ask yourself in preparation for data conversion

When setting up your QuickBooks company file, you will need to determine whether you want to bring over any data from your existing accounting program. Additionally, you need to know what features you want to use in QuickBooks. Answering the following questions will help determine what type of setup you need to manage your day-to-day business activities:

• How much historical data do you want to bring over to QuickBooks?

  If you are converting in the middle of the year, you need to determine whether you will bring over all the transactions that have occurred thus far, or just start from the current month you are in. The benefit of bringing over transactions that go back to the beginning of the year is that it will allow you to run financial statements in QuickBooks for the entire year, as opposed to only part of the year. Keep in mind that it will be more time-consuming to do this, so you will need to weigh the...

Converting QuickBooks Desktop data to QBO

Now that you are familiar with most of the limitations of converting data from QBD to QBO, we will walk through the steps for doing this. There are seven primary steps involved with converting data from QBD to QBO:

1. Checking the target count
2. Creating a QuickBooks Online account
3. Backing up your QuickBooks Desktop file
4. Checking for updates
5. Running the QuickBooks Desktop conversion tool
6. Logging in to QuickBooks Online
7. Verifying that all of your data was converted

Let’s take a look at each of these steps, one by one.

Checking the target count

In order to convert your Desktop data to Online, your target count must not exceed 750,000.

To check your target count, open your QuickBooks file. From the home page, press Ctrl + 1 on your keyboard, which will open the Product Information screen. On this screen, you will find your product license number, the location of your company...

Alternatives to converting a QuickBooks Desktop file to QBO

If you are unable to convert your existing QuickBooks Desktop data to QBO, you have a few other options to choose from:

• Option 1 is to export all of your lists (vendors, customers, accounts, products and services, etc.) to Excel and then import that data into QBO. From there, you can connect your bank and credit card accounts and start using QBO to manage your business without bringing over historical data. The good news is that you can always refer back to the backup file for QBD if you need to.
• Option 2 is to import all of your lists and record a summary journal entry of historical data in QBO. This option is ideal if you need to have the historical data in QBO but you don’t have a lot of time to enter all of the details or you don’t want to pay someone to do it.
• Option 3 is to import all of your lists and record the details of historical data into QBO. This option would be ideal if...

Deciding if QuickBooks Online is right for your business

It’s important to make sure that moving your business to QuickBooks Online is the right thing to do. While QuickBooks Online is ideal for many businesses, if one or more of the following is true about your business, you may want to reconsider:

• Multiple businesses: If you have more than one business to manage, you need to know that you will need to purchase a separate QBO subscription plan for each business that has its own federal tax identification number. For example, let’s say I have a tax preparation business and I have a few luxury properties that I rent on Airbnb. These are two separate businesses, which means I would need to purchase two QBO plans. The good news is you can easily create a new QBO account within an existing account and simply toggle between the two as opposed to having two separate log-ins.
• Comprehensive inventory accounting requirements: If your business manufactures products that requires...

Questions to ask yourself in preparation for data conversion

When setting up your QuickBooks company file, you will need to determine whether you want to bring over any data from your existing accounting program. Additionally, you need to know what features you want to use in QuickBooks. Answering the following questions will help determine what type of setup you need to manage your day-to-day business activities:

• How much historical data do you want to bring over to QuickBooks?

If you are converting in the middle of the year, you need to determine whether you will bring over all the transactions that have occurred thus far, or just start from the current month you are in. The benefit of bringing over transactions that go back to the beginning of the year is that it will allow you to run financial statements in QuickBooks for the entire year, as opposed to only part of the year. Keep in mind that it will be more time-consuming to do this, so you will need to weigh the cost versus the...