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Checklist for Converting from QuickBooks Desktop to QuickBooks Online

February 28, 2013 | By | 42 Replies More

Thinking of making the change from QuickBooks Pro, Premier, Enterprise or even Mac to QuickBooks Online? Read this first.

I want to say, if you are considering this switch: YAY! Most of the people in the QuickBooks community know that I’m sort of a fan, so I’m always excited to hear about one of my colleagues considering it – regardless of whether if it’s for their practice or a client file.

As much as I love QuickBooks Online (QBO), as I mentioned in a previous article here, QuickBooks Desktop (QBDT) is still my first love, and I just want everyone to be happy so there are some considerations that should be taken into account before making the change. This might be a long one, but I think it’s important stuff. Ready? Good! Let’s begin.

The first thing we need to take into account is whether QuickBooks Online is a good fit or not. I’ll be the first one to admit that sometimes, QBO really isn’t the best solution (but I do try very hard to see if I can get it to work for anyone). If any of the following are a must have, you’ll either need to look to the Intuit App Center or workarounds (if available, I’ve indicated as such next to each feature) to assist, or you should stick with QBDT:

  • Progress Invoicing (I have a work around)
  • Receiving Partial Purchase Orders (I have a work around for this, too)
  • Job Costing
  • Online Bill Pay (Bill.com can manage this as an option)
  • Sales Orders
  • Inventory Assemblies (SOS Inventory or DucoTrax are both options)
  • IIF import (Transaction Pro Importer can do this)
  • Price Levels (Products/Services are used for this)
  • Using Letters, i.e.: Collection Letters, Credit Letters, etc.

Things to Consider When Converting

Here is a breakdown of some important things in QuickBooks Desktop to consider – things to prepare for, things  that may not get converted or may get converted in a specific way that may not be expected from someone new to QBO.

File Size – if your file is over 200MB, you’ll need to condense it or create a period copy before converting, or only import lists.

Editors Update (5/13/2013): If you use the newer conversion method as described in this article, the limitations are different. With QuickBooks 2010 or later the file size is not an issue, the limit is the number of transactions. If you have more than 75,000 transactions then you want to condense your file.

Reporting – while QBO does not have as many “canned”, or default reports as QBDT, generally those that aren’t can be easily created and memorized. What’s really cool is that any of these reports may be added to a group and the scheduled to be emailed to anyone that needs them on a regular basis automatically, and you can choose to have these reports sent as Excel attachment.

Budgets – any budgets set up in QBDT will not convert. If you’re using QBO Plus, you’ll be able to create new budgets.

Closing Date Exceptions – while the closing date and password ARE converted, once you make the change the accumulated exceptions will not show. QBO will begin to track new exceptions.

Custom Fields on Lists – if the QBDT file is using custom fields for customers, vendors, employees or items, these will not convert. QBO does have 3 custom fields that can be added to forms such as Invoices or Sales Receipts.

Inactive Status – if there are inactive elements in ANY list they will be converted as active.

Customer information – Price Levels, Tax Items, Sales Rep, Customer Type, Credit Limits and Job Status are not converted.

Customer Message List – while the original message will still exist, and you can still add a customer message on transactions, there isn’t a drop down menu to choose from. Each message has to be entered manually.

Employees/Payroll – all employee contact information is retained, but payroll is not. No employee payroll information such as filing status, rates, etc. is converted, or payroll items. Paychecks/liability payments are converted as regular checks. The details on these transactions are not converted, and liability refunds, adjustments, opening balance transactions are converted as Journal Entries.

Editors Update (5/13/2013): As of February 2013 QuickBooks now will import SOME payroll information if you have an active payroll subscription. Employees, taxes, and payroll items convert, but prior payroll period info will not.

Reconciliations – any existing reconciliations will be lost – the easy way to fix this is to make sure that the accounts are reconciled to current in QBDT prior to conversion, then do one large reconciliation once you have converted to QBO.

Existing Estimates & Purchase Orders – QBO Plus has the ability to create Estimates and POs, but existing QBDT Purchase Orders will not be converted to QBO.

Invoices – all of the invoices will be converted (unless they’re pending) but some information will not convert as you might expect. PO Number will be Custom Field 1, Sales Rep will be Custom Field 2, subtotals won’t calculate, Sales Tax will be a line in the invoice and progress invoice columns won’t convert.

Statement Charges are available in QBO, but existing QBDT Statement Charges will transfer to QBO as Invoices.

Group Items – QBO doesn’t have Group Items, but all of the components of the Group Items will transfer and the existing transactions that use them will show each item as a line in the transaction. The top and bottom lines are zero amount lines – the top shows the group name and the bottom line will show the description. What does this mean? That if you need to resend an invoice with a group item, the customer will see all of the components included.

Items – these are called Products & Services in QBO and you don’t have different types. If you’re using QBO Plus, you can turn inventory on, and you can also tell QBO that you purchase the product or service from a Vendor, making it double sided (or two sided, as some people call it).

Audit Trail – the QBDT Audit Trail does not get converted. You’ll still have this in your original QBDT file if it ever comes up, and I think QBO has a more useful way of tracking what goes on with it’s Activity Log. It shows user login/logout, list changes, transaction edits, even when add-ons access or when the Downloaded Transactions function pulls in bank info.

Memorized Transactions – these will not convert. Fortunately, QBO has something I think is betterRecurring Transactions. You can set these up to be created automatically and even have Invoices or Sales Receipts (great with Intuit Merchant Services for recurring billing!) sent to the client every month automatically. This is what I do for my clients that pay a flat fee every month for services and OH MY GOSH I LOVE IT.

Online Banking – The connections set up in QBDT won’t transfer, but it’s easy to reconnect with QBO’s Downloaded Transactions (DTX). I know I’m not alone in this when I say DTX is superior to the QBDT Online Banking. The ability to see all connected accounts at once and deal with 100 transactions at a time makes this process so much more efficient. The fact that you can simply click a tab to see already accepted transactions – and easily fix client mis-postings – is icing on the cake!

Users/Permissions – Existing QBDT user logins won’t convert. Once you import into QBO, you’ll need to invite each user. Another feature that QBO has and QBDT doesn’t is the ability to have as many Time Tracking and/or Report Only users as you need, and these don’t count towards the subscription defined user limit. Great for entities with Board Members that may only need to view reports!

Inventory Conversions

While QBO does do basic inventory tracking, you should be aware of how existing inventory transactions are handled in conversion from QBDT. This surprises MANY people.

When you convert, new lines are created to show the effect the transaction made on the inventory asset account or the cost of goods sold account. On invoices, sales receipts credit memos, bills, credit card transactions that contain inventory items, QBO will create two lines after each inventory line that will show the asset and COG amounts that use 2 new Sub Items: “COGS” and “Inventory Asset”, which have the same description as the parent inventory item.

QBO Invoice converted from QuickBooks Desktop

This is going to cause Cash Basis reports with Cost of Goods amount to be different for any unpaid or partially paid inventory items on them, but the amount for paid in full inventory transactions (or non-inventory) transactions will be the same. Any accrual reports won’t be affected.

What I do for clients with inventory is start QBO fresh from the beginning of the most recent period. I can enter opening balances, open invoices, bills, estimates and purchase orders and set up the inventory directly into QBO so we have clean data right from the start.

Wrapping Up

Note that when you convert you have the option of importing lists only or importing your QBDT file. Even if you do decide to convert, you can still import list information into QBO after the conversion:

QBO Convert Options

It is also important to note that once you create a QBO company you have 60 days to import QBDT data; and you can do it over and over again during those 60 days. Any existing data will be overwritten, so if you don’t like the way that your import worked the first time, you can tweak your QBDT data and try again.

What I have always recommended when making the change is to run QBDT and QBO parallel for the first 30 days (which are free for QBO), to make sure it’s a good fit. Yes, the time it takes to do the double entry is a bit of a pain, but it’s much less so than just jumping in and finding out a few weeks later that QBO really isn’t going work. And converting from QBO to QBDT is an entirely different article!

For a step by step walk through of the new conversion process, check out my latest post on AccoutingWEB.com.

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Category: Cloud Accounting, Expert's Corner, QuickBooks Online, QuickBooks Tips/Tricks, Stacy's Online Solutions

About the Author ()

Stacy Kildal is owner/operator of Kildal Services LLC, located in Waterford Michigan—a full service bookkeeping company that specializes in all things QuickBooks. As a Certified Professional Bookkeeper and Advanced QuickBooks ProAdvisor, she supports QuickBooks clients all over the country, offering payroll, bookkeeping, training and consulting. She regularly teaches QuickBooks workshops through the local county planning and economic development department, along with community college and continuing education classes for various school districts.  Stacy is one of the three hosts for the Radio Free QuickBooks weekly online radio show. As a member of the esteemed Intuit Trainer/Writer Network, Stacy has presented many live seminars and webinars. Her attendees enjoy the passion she exhibits for her work and can easily relate to the many real life examples she uses during these presentations. She has also been featured frequently on Intuit’s Community "Ask the Expert" forums, at various Intuit Academy To Go podcasts, as well as hosting a number of Intuit Small Business Online Town Hall sessions. She an big fan of working mobile and has been recognized by Intuit as being an expert on QuickBooks Online, having written the Intuit Academy courses for the US, Singapore and Canadian versions. Kildal Services LLC provides consulting, speaking and writing services to clients (including other accounting professionals) nationwide.

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  1. QBD > QBO conversions: Maximum size - QBO Pro | June 21, 2014
  1. Randy says:

    When I log in to a clients Qbks online, the first thing I want to do is VIEW the general ledger. I wasn’t able to view the GL all at once. Is there a trick to doing this? It seems the file is too large to view.

  2. Stacy Kildal says:

    Randy,
    One quick way would be to open the GL report from the Reports > Accountant & Taxes menu, set the default date range, then memorize the report.

    Then, for quick access, in the Report tab menu ribbon, go to More, then rearrange the menu so that Memorized Reports is at the top of the list. Now, all you’ll have to do is click the Report tab and you’ll see your list of Memorized Reports. (Anything you put at the top of that list in “Rearrange Menu” is what you’ll get by clicking the different tabs).

    While it’s not the first thing you’ll see when you login, you’ll only be 2 clicks away :)

    Hope that helps!

  3. If your clients import bank/credit card transactions into QBO, there is no date range or lock the first time you import, so they will be bringing in duplicate transactions unawares! Until this is fixed, care should be used in accepting these transactions into the bank register.

    Wish I’d been warned…

  4. Randy says:

    The issue I have with the GL, that I can’t see the entire GL in the report. The size is limited in the viewing, and I only see about 20% of all transactions.

  5. wayne higdon says:

    Can you have more than one user accessing via QBOA ? It seems like you can only send one ‘free accountant user” invitation, but can one of the paid users also access with Accountant Edition? We sometimes have myself, my staff person, and the client’s CPA needing access. As these people get familiar with the benefits of Accountant access, there not going to want to be limited to regular users. (I realize that in some situations the ‘reports only’ access might help.)

    • Stacy says:

      Wayne,

      Right there is no firm login, but it’s possible to be logged in to QBOA or QBO from multiple browser windows or computers. Everyone has been asking for firm logins so they don’t have to give out their personal Intuit ID (I usually suggest creating a new generic one to vt around this) that they may use for their ProAdvisor account or own QBO account.

      Hope this helps!

      -SK

  6. Adrian Yates says:

    Hi Stacy,

    Heading in the other direction.

    We recently converted 19 client QBO files to a privatly hosted desktop environment for several reasons such as more flexible multi user access, security of distributing passwords, data not out on public clouds, better performance as well as lower overall monthly cost. In our experience QBO may work for the smaller clients very well, however, with the portfolio of companies we work with, the desktop or enterprise versions of QuickBooks is the preferred application.

    • Adrian, I’m not sure what you mean by “data not out on public clouds” – particularly as a way to differentiate QuickBooks Online versus QuickBooks Desktop in a hosted (cloud based) solution?

  7. Jay Kimelman says:

    Stacy,

    When you say bill pay is not compatible with QBO, are you referring to the desktop banking Direct Connect feature? I am a long term desktop supporter and this is my first opportunity to move to QBO, Mac to QBO can be accomplished, correct?

    Thank you !

    • StacyK says:

      Jay,

      Exactly what I mean! An easy alternative is bill.com.

      Contact me directly for help going Mac > QBO, I do these all the time.

      Thanks for the great questions.

  8. Anabel says:

    Excellent article, Stacy. We are current QBDT and now are expanding to a second office, which we want to be able to access our QB files from occasionally. However, I am concerned with upload and download speeds “recommended” and what actually works for QBO, as we were only able to get DSL with 3Mb download and 0.5Mb upload. Can QBO work well at these speeds?

  9. Any idea how a conversion would work with a Quicken file – one from Mac? I spoke to QBOnline support awhile back and they told me they could do this with a special conversion team available to support – for no extra fee.

    Any feedback if this has actually worked?

  10. Jeremy Brown says:

    Would you happen to know of any online service that can convert a QBB file to make it ready for QuickBooks Online? My wife and her partners dropped their accountant and she gave them a QBB file. But we don’t have access to QuickBooks 2013 to do the conversion our selfs.

    • Jeremy, any ProAdvisor should be able to do that for you for a low fee (converting to a QBW file first, then up to an Online account). It isn’t that time consuming for someone to do, and it shouldn’t cost much (or, even for free, perhaps).

  11. Brian Munroe says:

    The article mentions thaat customer type does not convert between QBDT and QBO. Same for custom fields from the customer lists. Does this mean that they do not exist in QBO?

    We are a trade organization that tracks our members (Active, retired, expelled, pending, etc) via customer type. We generate reports and invoicing based on customer type. We also store important information in custom fields in the “additional info” tab on the customer screen in QBDT.

    Without those fields I don’t think QBO will work for us, but we do want to move to a multi-user cloud based system. Any ideas?

    Thanks

    • StacyK says:

      Brian,

      You could get customer types by using Sub-customers.

      For instance:

      ACTIVE
      Customer A
      Customer B

      RETIRED
      Customer C
      Customer D

      Right now that’s the best way to get customer types. Class tracking might work, but then you’d have to reclass every transaction if they changed from Active to Expelled.

  12. Nick says:

    Hi Stacy,

    I was pretty excited about converting to QB Online. I knew about the Memorized transactions not converting. I feel this is manageable. Now, I’ve learned that my Innovative Merchants account (recurring charges) will not convert either. Is this true?

    • StacyK says:

      Nick,

      I’m not that well versed with the details of how the merchant services work. I generally set mine up within QBO as memorized sales receipts, rather than directly via the merchant service itself. Sorry I can’t offer any more info!

  13. Trevor says:

    Thank you for an un-biased, thorough run-down of things one should consider when making the switch to QBO. I’ve been playing around with the sample company to test the speed (it’s fine). But one report that I need to make every month is Sales By Rep Summary so that I can pay my sales reps their commission. I don’t see that report available. Is this something that I could easily create and memorize? Thank you.

  14. Michael says:

    Hello Stacy,

    I had a credit card refund in QBDT that didn’t transfer to QBO. Now my bank deposit page shows the amount refunded as needing to be deposited. How can I fix this?
    Thank you.

  15. Iris says:

    I have a client that wants me to convert her file from Quickbooks to Quickbooks online. I can do it but not sure do we both need a subscription then. Also does it do payroll?

    • Iris, I am not sure of the differences between the US and Canadian versions – in the US if you are a ProAdvisor you have a QuickBooks Online Accountant subscription and you can be invited in to a client’s file as the accountant user at no additional charge. Payroll – again, in the US there are payroll options that you can add to QBO, although not the same collection of options that you have for the desktop version.

  16. Laura says:

    Thanks for the article! I have a client who just converted his QuickBooks for Mac Desktop to QuickBooks Online. He had a subscription to Intuit Payroll with his Desktop version, but the payroll did not make the conversion with his files. I assume he doesn’t need to re-subscribe to the payroll service in QBO? How does he link QBO with his current service? Thanks in advance for the help!

  17. Jeffrey Lawrence says:

    I have 10-15 different line items on an invoice and I have over 1000 items. When I add a line item to an invoice I have to enter the first few letters in the search bar. But after finding the item when I go to add a second item and need to search it takes a good 25 seconds to load which adds up to a lot of wasted time .

  18. Rhonda says:

    We are currently using quickbooks retail Desktop, and I love the fact that we can take a sales order and create a purchase order. I don’t see a sales order in QBO, but though I can use the estimate template, I don’t want to have to re-enter the info to create the purchase order: is there a fix for that?

    Thank you

  19. Mario says:

    I am trying to convert from QB for Mac desktop version to QB online. The problem that I have is payroll. I am currently using Intuit Online Payroll, and would think that the data would transfer over. (given that this is a cloud service). Am I correct in that I need to 1) re-enroll in Intuit Online Payroll, 2) manually enter all employee information and 3) set up all of the payment data for government tax entities? Can’t imagine that this is the case. Am I missing something? Thanks for your help.

  20. Megan says:

    I have a couple questions – our company is trying to switch over to QB online and we use multiple memorized transactions in our day to day accounting. we just recently found out that memorized transactions don’t transfer from desktop to online – do you know if this is true? Is there a way to get around this? We don’t want to have to RE-memorize all of those transactions because of not only time but the fear of making a mistake. It just seems like when converting they should do everything for you including memorized transactions….

  21. Hello!

    If you could clarify this for me that would be great!…

    “Invoices – all of the invoices will be converted (unless they’re pending) but some information will not convert as you might expect.”

    Does this mean that any invoices we have not received in for payment and are showing pending or waiting for payment WILL NOT transfer to QBO?

    I have a couple months worth of checks to receive in, so I don’t want to make the tranfer from desktop to QBO until I have received in I guess :(

    Thanks for any help you can offer!

    • “Pending” is a specific status, not the same as waiting for payment. You can right click on an invoice to “make it pending”, which means that it hasn’t been sent out to the customer and isn’t a posted transaction (so doesn’t affect your A/R). Not the same as waiting for payment. “Pending” invoices don’t transfer, I believe.

  22. Hi Stacy – Thanks for the in-depth article. Unfortunately I didn’t realize the bank recs didn’t transfer with the QB desktop data to the QBO Essentials. I didn’t reconcile a few bank statements before the transfer. Now the opening bank rec balance is over $600,000. Off by about $550,000!! I do see that all the entries in the QBO register are still marked with an R if it was reconciled in the desktop version.
    How can I do one large bank rec if the entries are considered reconciled?

    Thanks in advance for any help you can give me.

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