In general, we try to use open source tools as much as possible but one software that we think is worth the investment is a copy of Quickbooks Pro. QB is kind of this terrible, awful, essential software that everyone uses. There's things it's really good at and things that are horrible. Just be aware of the horrible and you should be OK. At first we used Quicken and that was really terrible so we wouldn't suggest going with that (it's not really meant for businesses anyways).

Pricing and versions

One annoyance about QB is that there's a new version every year and they try to get you to upgrade. Unless you're a massive company, stay away from anything but the lowest cost Pro version. Also, as long as you don't use them for your payroll (we suggest using a separate product such as Paycycle or similar), you should be OK using the same version for a few years.
Eventually they do 'sunset' out old versions but you can run it for at least 5 years (we had a 2005 copy until 2010). You can buy an old version for half the price and it'll be just fine.

There is an online version, I can't imagine it's any good and most people who've tried it said it wasn't great. Stick to the desktop version. You can use any old computer, although having some speed and RAM can be helpful when its crunching numbers or doing backups.

What it's good for

QB is great with Purchase Orders, bills, payments, reconcilliations, invoices, credit card/merchant/bank data import, and reports. This is the bread-and-butter stuff.

Make sure you get a bank that does non-crappy QB importing. Unfortunately this is where small banks can let you down. The large banks tend to work nicely with imports, so that you can reconcile with ease. Merchant accounts that are backed by have a good import system as well. Paypal really sucks no matter what.

Things you should watch for

QB spends a lot of time trying to get you to upgrade, update or use some addon such as their credit card processing or payroll software. In general we strongly suggest not signing up for any of the extras they barrage you with. You're better off with a separate CC processor (more on that in another tutorial), paypal or payroll software.

They may also try to get you to pay for an online backup service. I used it and it totally sucks. You're better off with a free/paid dropbox or similar account. Save your files to the dropbox and they'll be auto-backed-up for you. Also use a removable USB key.

There is no manual included. The online help is not very helpful. Buy a book. The Missing Manual is one we used, it was pretty good. The biggest secret to using QB is to get it set up properly. A well set-up QB is easy to use. A badly set up one can take years to repair. Hiring someone to set up the company file is a good idea if you're not sure what you're doing.

The inventory system is lacking, if you have more than a few items you stock and they are less than $100 each, I'd just use a different inventory system.

Avoiding the list limit

One trick that Intuit uses to force upgrades is limiting the number of names. These are names of companies, customers, inventory items vendors, clients etc. The hard limit is 14,500 and you cant delete old ones if you reach it. And once you do you have to upgrade to Enterprise (costing thousands of $). If you are a consulting company, you'll likely not have more than a couple hundred clients, vendors etc but if you have an online store and you're selling to 25 people a day (which is a good goal for a small company) you'll reach the max in a little over a year. There is no real reason for this limit other than to force you to upgrade, even they admit they want companies of over $2mm revenue and 20 employees to upgrade, but this is really stupid. If you watch out for this now you can last for quite a while by employing a few tricks.

You can see how many names you're using by pressing F2.
  • If you have a lot of items, don't have each item as a different inventory item. Use a different inventory system.
  • When you import data from a credit card, you may end up creating multiple names for one vendor, merge them! (This is also good in general and avoids confusion about multiple vendors.)
  • The biggie is do not import individual online customer purchases as invoices. Each invoice must be tied to a customer and each customer is a unique name! Instead, use a generic name such as Webcart Customer and then have each purchase entered as a Sales Receipt.

This guide was first published on Feb 27, 2013. It was last updated on Mar 08, 2024.

This page (QuickBooks) was last updated on Feb 20, 2013.

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