Who should use QuickBooks Free and who needs QuickBooks Online?

This article was paid for by Intuit QuickBooks.

Free accounting software gives new business owners a simple way to organize expenses and revenue without adding to their costs. QuickBooks Free from Intuit is designed for solo entrepreneurs, letting you sync transactions from your bank account, generate custom invoices and run essential financial reports.

It's fully integrated into the QuickBooks ecosystem, so if you outgrow the free platform, you can easily upgrade to a paid plan and your data, history and workflow move with you. 

Here's how to determine whether QuickBooks Free or QuickBooks Online is the better fit for your business.

Although QuickBooks Free handles many core bookkeeping tasks, some features, like invoicing and expense tracking, have monthly limits.

QuickBooks Free could be the right solution if:

1. You run a one-person operation

QuickBooks Free is designed for solopreneurs, so it only supports one user. But that's all you need if you're a freelancer, consultant or other self-employed professional handling your own books.

It's a more efficient alternative to manual recordkeeping or spreadsheets — automating routine bookkeeping tasks so you have more time to grow your business.

2. You have a low volume of monthly activity

QuickBooks Free's usage limits may not matter if you have few expenses, rarely travel for work or don't have a lot of financial activity to manage each month.

By default, the free plan allows you to send up to two invoices per month. But if you qualify for and enable QuickBooks Payments, you may be able to generate an unlimited number of invoices.

QuickBooks Free also lets you accept payments via credit or debit card, PayPal, Venmo, Apple Pay® or ACH payments. Users also receive automatic protection against credit and debit card disputes, covering up to $25,000 per year. 

3. You only need basic bookkeeping

If your primary goal is to get a clear picture of how much you're earning and spending, you might not need the advanced accounting tools that come with QuickBooks Online.

QuickBooks Free automatically syncs transactions from one bank account. You can also run three core financial reports — profit and loss statements, balance sheets and QuickReports, which provides instant transaction details from a single account.

If you're just starting out, that may be enough to keep tabs on how your business is performing.

4. You want to keep costs down

Starting a business means taking on lots of new expenses, from equipment and inventory to marketing and website hosting. QuickBooks Free can help you keep overhead low so you can focus on what's important.

And when it's time to grow, you can upgrade to a paid QuickBooks Online plan and seamlessly migrate all your reports and information.

*As of this writing, QuickBooks is offering 50% off for the first three months.

A paid QuickBooks Online plan may be a better fit if:

1. Your accountant or bookkeeper needs to access your books

QuickBooks Free only supports one user, but QuickBooks Online tiers come with access for multiple professionals, so you can collaborate directly with your accountant, bookkeeper and tax expert, rather than having to send documents back and forth.

2. You're regularly reaching QuickBooks Free's usage limits

If your needs exceed QuickBooks Free's limits, a paid plan makes managing your books more convenient. 

For example, if you have multiple bank accounts or send invoices to more than a dozen clients each month, you'll want the added capacity that comes with QuickBooks Online.

3. You need more detailed financial information

As your business grows, you may need additional tools to get a clear picture of your finances.

Depending on the tier, QuickBooks Online includes tools for budgeting, tracking project profitability, managing inventory and creating more customized reports and dashboards.

4. You want more automation or integrations

QuickBooks Free automates some routine bookkeeping tasks, including income and expense tracking, transaction categorization and bank account reconciliation. QuickBooks Online builds on those capabilities with additional tools for managing bills, recurring invoices and bank rules. It also supports integration with third-party apps like Shopify, Stripe and Square, which can reduce the need to manually transfer information between systems.

5. You have multiple employees

QuickBooks Free supports one user and enables you to manage one 1099 contractor. If you have a bigger team, QuickBooks Online has room for up to 25 users and additional payroll capabilities.

6. You want mobile access

If you run your business on the move, the QuickBooks mobile app comes with QuickBooks Online plans. You can send a client invoice during a meeting, capture a receipt on the road or check your monthly profits while you're away from your desk.

With QuickBooks, you can choose accounting software for how you run your business today, without trying to predict where you'll be tomorrow. 

Start with QuickBooks Free and, as you add team members, contractors, inventory or projects, take advantage of the added capabilities of QuickBooks Online.

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