QuickBooks Desktop vs QuickBooks Online for Manufacturers and Distributors

Side by side

Sales orders, backorders and partial shipments

In Desktop, sales orders are in Premier and Enterprise. Intuit's Desktop workflow uses a sales order to track items on backorder until you can invoice them. Enterprise with Advanced Inventory adds the Sales Order Fulfillment Worksheet. It shows each order as open, picked, packed or shipped, and sends orders for picking and packing.

QuickBooks Online has sales orders in Plus and Advanced. Simple Start and Essentials need the Inventory add-on. A sales order doesn't post to your books, but it reserves stock and updates the committed quantity. You can convert it to an invoice or a purchase order, and one sales order can link to more than one invoice. You can also mark an order as shipped. Intuit's help doesn't describe a backorder report or a pick-and-pack worksheet.

For the Desktop steps, see how to convert a sales order to an invoice and how to handle backorders and partial shipments.

Inventory costing and warehouses

Desktop values inventory at average cost. With Advanced Inventory in Enterprise, you can switch to FIFO from a date you choose. QuickBooks then recalculates inventory transactions from that date, and you can switch back later. The switch changes your inventory valuation, balance sheet and profit and loss reports, so involve your accountant.

QuickBooks Online offers FIFO or moving average cost. You choose before you create your first inventory item, and you can't change it later. If you create an item first, Online defaults to FIFO. Intuit says both methods carry over in a migration.

For warehouses, Advanced Inventory tracks quantity by site and bin, moves stock with Transfer Inventory, and sets reorder points per site. Intuit's Online inventory help and plan comparison don't describe stock by site. See how to track inventory by site in Desktop.

Assemblies and manufacturing

Desktop builds products from Inventory Assembly items. A bill of materials can include another assembly, and a short build can be saved as pending. QuickBooks Online Plus and Advanced don't have assemblies. Intuit's migration notes say Desktop assemblies arrive as single inventory items, with components on detail lines. Online bundles group items on a sale but aren't tracked as inventory.

Intuit's manufacturing orders are currently in Intuit Enterprise Suite, which doesn't support multi-level bills of materials. See How to Set Up a Bill of Materials and Build Assemblies, and QuickBooks Desktop Enterprise vs Intuit Enterprise Suite.

Customer pricing, users and reports

Desktop stores customer pricing as price levels. Enterprise Platinum and Diamond add Advanced Pricing: price rules by customer, item, class or sales rep, plus quantity discounts. Turning it on converts your price levels into price rules. See how to set up customer price levels in Desktop.

QuickBooks Online has no price levels. They don't migrate, and neither does the price level on each customer. Online's price rules can set prices by customer, customer type or item. But they are a beta that only selected Plus and Advanced customers can turn on.

Users and permissions don't migrate; you invite each user from Online. Memorized reports, the audit trail and past reconciliation reports stay behind. If you report through Desktop Enterprise's read-only ODBC driver, plan to rebuild those reports. Online Advanced offers custom reports and Excel data sync.

Hosting, access and integrations

Desktop runs on Windows, and Intuit no longer supports it on Windows 10. To work remotely, you can buy Intuit's cloud hosting or run your own server with Remote Desktop Services. Microsoft server licenses and one access license per hosted user are sold separately.

QuickBooks Online runs in a browser, so there's nothing to host, but it needs an internet connection. Desktop Enterprise connects to more than 200 apps, per Intuit. Intuit's migration list doesn't cover connected apps, so plan to reconnect or replace each app that reads or writes your Desktop file.

What migrates and what doesn't

Moves to QuickBooks Online

• Customers, vendors, the chart of accounts and items. Item and sub-item hierarchies keep up to five levels.
• Open and closed sales orders, with their conversions to invoices and purchase orders.
• Inventory, recalculated under FIFO or moving average cost, with adjustments.
• Invoices, bills, item receipts (as bills), estimates (marked closed) and credit card charges (as expenses).
• Memorized transactions, as recurring transactions.

Doesn't move

• Price levels, including the price level on each customer.
• Units of measure, and Desktop-only item fields such as the manufacturer's part number.
• Assemblies as assemblies. They arrive as inventory items.
• Received quantities on open purchase orders, and the link between bills and purchase orders.
• Pending sales, progress invoices from estimates, and invoice subtotals, which land in the description.
• Memorized reports, the audit trail and past reconciliation reports.
• Users and permissions, custom fields on items, and customer credit limits and sales reps.
• Bank connections. You reconnect each account in Online.

Check the limits before you start. Press F2 or Ctrl+1 and read Total Targets: Intuit says it must be below 4,000,000, or you condense the file first. The file must be on your own computer, so get a local copy if a provider hosts it. You have 90 days from starting your Online subscription to migrate, or 180 days if your accountant set it up. Intuit says you keep view-only access to Desktop for 12 months after you cancel it.

Our migration readiness audit post covers what to check before you commit.

Who should choose which

• Stay on Desktop Enterprise if you build products from bills of materials, track stock by warehouse or bin, or price by customer level.
• Stay on Desktop Enterprise if your sites have unreliable internet, or your reports and apps are built on the Desktop file.
• Choose QuickBooks Online Plus or Advanced if you resell finished goods from one stock pool, keep pricing simple, and need browser access.
• Choose Advanced over Plus if you need more than 5 users, custom reports or Excel data sync.
• If you need assemblies in the cloud, compare Intuit Enterprise Suite instead, and check its single-level bill of materials limit.

Where Logistify fits

If you stay on QuickBooks Desktop Enterprise, Logistify is a managed service that takes on the work around the file. The Sales Order Service enters customer orders that arrive by email, PDF or paper as sales orders, with a person reviewing exceptions. The Accounts Receivable Service matches payments in your bank file to the open invoices they pay and records them. The Procurement Service follows up with suppliers on open purchase orders. If you're still deciding, see the alternatives to QuickBooks Desktop.