Widely regarded as the leading vendor of small business accounting software, Intuit has been a little behind the curve when it comes to the cloud, particularly in the UK which had to wait until 2011 to see the release of its hosted QuickBooks Online service.

With an eye, perhaps, on more specialist competitors, the online implementation was deliberately made different from the familiar desktop QuickBooks, and a lot simpler, to better serve the needs of the modern small business. A number of updates and changes have also been implemented since QuickBooks Online was launched over here, to address some of the shortcomings of the original release.

Working with QuickBooks Online

The best way to get started with QuickBooks Online is to sign up for a 30-day free trial (no credit card is now required) then, if you like it, upgrade to a full subscription.

Three levels of service are available all of which let both the subscriber and a professional adviser login and access the service over the Web. Instant upgrades are possible from one level to another, there’s no contract and you can terminate the service at any time. Unfortunately Intuit sees its Online service appealing to a different audience from the desktop product, so although there’s nothing to stop desktop customers switching they can’t take their data with them.

Prices start at just £9 (ex. VAT) per month for the very basic Online Simple Start service. Targeted at sole traders and contractors, this provides basic invoicing capabilities plus tools to track expenses and the ability to import transactions direct from an online bank account. A new facility to create estimates has recently been added and as with all versions, free telephone support is included as standard.

Just about any browser can be used to access the QuickBooks service including those on tablets and smartphones. A custom mobile app, however, has not been released, something many of the competition offer as standard, with some even allowing bills to be scanned and uploaded this way.

Simple Start is limited to one user and has no facilities to handle VAT, so companies with more users and those over the VAT threshold will need to sign up for QuickBooks Online Essentials. At £19 (ex. VAT) per month this is more expensive but as well as VAT, includes enhanced accounts payable tools, support for multiple currencies and login IDs for up to three users?plus a financial adviser. On the downside there’s no support for the Flat Rate VAT scheme employed by a lot of small businesses and no direct filing of VAT returns with HMRC?just copy and paste.

The same limitations apply to QuickBooks Online Plus (the version we tested) which, for £29 (ex. VAT) per month, can be shared by up to five users. This implementation also features a number of other extras, including recently added stock tracking tools and the ability to automatically assign expenses to a specific customer. Additional budgeting and job costing options are also available in this edition.

Payroll, however, isn’t included with any of the QuickBooks Online services. Instead Intuit has teamed up with The Payroll Site to provide a totally separate online payroll service for companies with five employees or more. Alternatively you can always buy the payroll product available as part of the desktop QuickBooks family.

Accounting in the cloud

As with other cloud apps, performance will vary dependent on Internet bandwidth but, for the most part, we found the Intuit service quick and very responsive. The user interface is nothing like the desktop product, but that’s not a bad thing. Out goes the process flowchart in favour of a much leaner tabbed interface, reflecting the simpler nature of the product. Accounting jargon is kept to a minimum, although the chart of accounts is still there if you look for it. For the most part, this and other accounting gobbledegook can be left to your accountant to deal with.

Getting started is easy, simply enter a company name and contact details, after which a useful To Do list will guide you through the most important tasks. Things like importing existing contact lists to populate customer and supplier files, uploading a company logo and creating your first invoice.

Don’t, however, expect to find the kind of free-format document customisation tools available in the desktop version of QuickBooks. You can choose from a number of themes, re-order invoice columns, add footers and custom fields and change fonts, but not much more. On the plus side, invoices can be emailed as a PDF with a useful option to select all overdue invoices and email in bulk, as payment reminders. There’s support too for direct debit payments and the ability to record charges and convert them into invoices later.

Banking and reconciliation are well catered for with support for direct links to online banking and credit card accounts a recent welcome addition. Most UK business banking services seem to be supported and PayPal too. Likewise, Online Plus subscribers can now track stock levels as well as import existing product listings for use when generating invoices.

Another nice feature is the use of mini pop-up interviews to configure each option, such as VAT processing for example. These only appear when accessing an option for the first time, doing away with the need to go through a lengthy setup procedure when first starting out.

Security et al

As with any online service security has to be considered, all the more so given that you’re trusting Intuit with all your financial data, including login details for online bank accounts. To this end 128-bit SSL encryption is used to scramble transactions, but you do have to trust Intuit to protect your company file which will be located on servers somewhere in San Diego with no option for a local backup or off-line working. That said, Intuit, claims to comply with EU and UK legislative requirements and pledges to take backups every hour.

QuickBooks Online is a functional and easy to use small business accounting service and as a late entrant into the crowded online accounting market, Intuit is clearly looking to use its desktop brand to win market share. Whether it can dominate in the same way as it does on the desktop, however, remains to be seen. Especially in the UK and Europe where it still needs to play catch-up with fleeter footed competitors including Crunch and Xero.