Job Costing in QuickBooks Online vs QuickBooks Desktop Contractor
Although QuickBooks Desktop and QuickBooks Online have been developed by Intuit to solve the same purpose of simplifying accounting tasks, they have vastly different interfaces and functionalities with many overlapping capabilities as they cater to different sets of users. While QuickBooks Desktop continues to hold the edge, many businesses are opting for QuickBooks Online because it does not have to be installed on any device. This is particularly true for businesses in the construction industry and other project-based verticals due to the nature of their service. However, with hosted QuickBooks Desktop, this advantage is negated. Let us dissect the differences in job costing in QuickBooks Online vs QuickBooks Desktop Contractor and understand why you should continue to use the latter solution in a hosted environment.
QuickBooks Desktop vs QuickBooks Online: Reports and User Interface for Job Costing
QuickBooks Desktop provides item-based job costing along with advanced reporting features. Job costing details such as profitability, estimates vs actual costs, and revenues are presented as a composition of item-based cost codes. All job-related costs are entered into items, and reports are generated using by comparing various parameters such as estimated cost vs actual cost using their cost codes. Eventually, detailed reports can be generated in the tabular format.
QuickBooks Online has a user-friendly Projects Dashboard that minimizes the need for data entry. Projects can be drilled down to view transactions, costs, and other details. One of the most important advantages of QuickBooks Online is that bank transactions can be imported when items are not needed to record costs. However, details have to be directly entered into accounts unlike items in QuickBooks Desktop. Additionally, Estimates vs Actual Summary Report, Job WIP Report (in QuickBooks Enterprise), and Unpaid Bills by Job are not available in QuickBooks Online.
Payroll in QuickBooks Online vs Payroll in QuickBooks Desktop for Contractors
Managing payroll in QuickBooks Online is a complicated process. All payroll costs can be captured in only one account. There is no provision to break down these details into different cost codes for different activities by default. There is no way to review or edit paychecks to update job costing as time has to be entered into timesheets before creating payrolls in QuickBooks Online. Even after using splitting service items in timesheets, QuickBooks Online can only include gross payroll and payroll tax data. It cannot include other costs such as workers’ compensation.
QuickBooks Desktop is a better option for payroll allocation. Simply running the payroll services can manage workers’ compensation, payroll taxes, benefits, and other details. When you have the timesheets in QuickBooks Desktop for a job and a cost code, all the data is automatically populated to simplify job costing by running the feature in QuickBooks Desktop.
Third-Party Application Integration for Job Costing in QuickBooks Desktop vs QuickBooks Online
A wide range of third-party applications integrate with both QuickBooks Desktop and QuickBooks Online. However, third party applications are necessary for various job costing scenarios in QuickBooks Online. Other project management features such as scheduling, contract management, communications with vendors and clients, invoice management too are not built into QuickBooks Online and require 3rd party software.
However, there are a limited number of 3rd party applications that integrate with Projects features in QuickBooks Online. Even then, costs might have to be entered with QuickBooks Online manually and the widely popular bank feeds will not be useful.
QuickBooks Desktop, on the other hand, has powerful job costing capabilities. Although third-party applications can be used with QuickBooks Desktop, they are primarily used for other functions such as timekeeping, receipt management, project contracts management, and so on. Typically, data is first entered into QuickBooks Desktop and then imported into third-party applications.
Who Should Use QuickBooks Online for Job Costing?
QuickBooks Online is the right accounting solution for contractors with relatively simple requirements. Some of the ideal users for the online solution are-
- Specialty contractors or speculative builders who do not typically use cost code-based job-costing.
- General contractors who have fewer jobs and payroll-related services can export data into journals in QuickBooks Online.
- Contractors who have a limited budget but are willing to manage integrated applications.
Who Should Use QuickBooks Desktop for Contractors for Job Costing?
The QuickBooks Desktop solution is the recommended solution in almost all scenarios, except when there are budget constraints and short duration projects.
- It is ideal for almost every type of contractor who needs an out-of-the-box solution for detailed job costing at the cost code level.
- Contractors that have unions or wage payrolls that cannot outsource their accounting tasks.
- If detailed reports in QuickBooks Desktop are sufficient, and additional project management applications are not required.
- There is a requirement for creating multiple company files. While there are no additional charges for creating more company files in QuickBooks Desktop, it is not the case with QuickBooks Online.
Apps4Rent Can Help with Hosted QuickBooks Desktop Solutions
Although QuickBooks Desktop is decidedly the better accounting solution for job costing, remote access becomes the deal-breaker for some contractors who need to access QuickBooks from their client’s location or during transit. While QuickBooks Online is specifically designed for such use cases, hosted QuickBooks Desktop can provide similar benefits. As an Intuit Authorized Hosting Provider, Apps4Rent virtualizes QuickBooks Desktop for remote access. Enquire about the best QuickBooks hosting plans with our QuickBooks experts available 24/7 for your assistance via phone, chat, or email.