Twitter Spaces Recap: Migrating from QuickBooks Desktop to QuickBooks Online

Welcome back to our latest Twitter Spaces recap.  The following is a lightly edited transcript of our recent Twitter Spaces chat about moving from QuickBooks Desktop to QuickBooks Online.  

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Starting with a quick overview of both programs: 

QuickBooks Desktop is a bookkeeping software that you download directly to your computer and maintain with an annual subscription. It helps you manage invoices, inventory, employees, banking, and the list goes on. It’s been around since the ‘90s but of course, it has evolved with our customer needs over the years, so instead of the original disk downloads, you can now download QuickBooks Desktop easily online.

Once it’s downloaded, you can manage some aspects of your books without an internet connection, but most important functions from uploading bank transactions to invoicing customers do require internet. While the list of features is long, some of the main appeals for QuickBooks Desktop are that it is a wonderful inventory management tool, it isn’t a cloud-based software, and it makes it easy to save hard copies of all your work all in one place.

QuickBooks Online’s capabilities are very similar to those of QuickBooks Desktop. However, QuickBooks Online is a cloud-based software that is accompanied by a monthly subscription plan. Some of the great features associated with QuickBooks Online are the ability to manage the account from any device with internet access, the QuickBooks Online mobile app, mileage tracking, and the ability for integrations with a handful of popular business apps.

While QuickBooks Online is a cloud-based software, it is still a very secure housing spot for your business data because it does use the same data encryption technology as top banks are using. Overall, QuickBooks Online is a super efficient, accessible, and user-friendly platform.

Now that we know a bit about each of these products, what are some reasons why customers may find themselves wanting to migrate from QuickBooks Desktop to QuickBooks Online?

There are a few reasons why customers may want to migrate to the Online platform. As previously mentioned, QuickBooks Online does offer a monthly subscription plan, rather than the annual subscription that QuickBooks Desktop uses, which could make Online a nice change for certain budgeting needs. With 2019 versions of Desktop having the service discontinuations, some customers may feel inspired to make the transition to Online rather than going through the Desktop upgrade process every few years. Or, they may just be ready for the ease of access that QuickBooks Online has to offer through the 25 user seats, cloud storage and mobile app options. It’s definitely up to the customer to decide which version of QuickBooks is the best fit for their needs all the way around, the migration isn’t a forced process by any means.

Next, we want to share a few things you should know about the process and a few items to keep in mind.  

As with any process, customer’s are definitely going to want to feel knowledgeable and confident when it comes to what they can expect and how they can best prepare for next steps.

The first thing I want to hit on is what features and data may not transfer over to QuickBooks Online.  For starters, transactions with 3 different types of currency won’t make their way to Online. Previous pay stub details like the payroll item breakdowns and year-to-date totals won’t transfer, but the payroll info from each employee should be transferred just fine. Inactive customers and some customer and vendor data fields won’t convert, and any Jobs from Desktop will appear as sub-customers in QuickBooks Online. Custom templates, existing QuickBooks users, progress invoices, and past reconciliation reports are also items that won’t show Online after the migration. The reason I point these out is that these are all great items to review and create backup copies for your records prior to migrating. However, it’s also smart to just get a backup copy of your entire company file to keep on hand anyway.

Once a customer has decided that migrating from QuickBooks Desktop to QuickBooks Online is the right move for them, what does that process look like?

When it’s time to migrate from QuickBooks Desktop to QuickBooks Online, the process is actually pretty simple since you’re able to upload the entire data file into the new .... First things first, you’ll want to choose which QuickBooks Online plan is right for your needs, and get signed up. Once this is done, you have 60 days to transfer your Desktop data over.

Next you’ll get the Desktop file ready for export. Before you begin with this, you’ll want to make sure that your program is fully up-to-date by clicking F2 or Controll plus 1 within your Desktop account and confirming that the release number is equal to or higher than the release needed for your version. For 2019, it should be R17, 2020 is R15, 2021 is R10 and 2022 is R5. If your version is 2018 or older, you can use the QuickBooks Desktop file restoration tool to upgrade your file and then move it over to Online.

Once you’ve verified that you’re updated, you’ll sign in as the primary admin in Desktop, go to company, and choose Export Company File to QuickBooks Online and click Start your export. From here you’ll sign in as the admin to your QuickBooks Online account, choose the online company you want to replace with your company file and select continue. There will be a couple more prompts regarding inventory and finalizing the data replacement, so you’ll walk through these and complete the process by selecting the final replace option. After that, your data should all be showing in your QuickBooks Online account.

What if the customer gets an error message when they try to complete the migration?

Ideally, the migration process will be smooth sailing and you’ll be up and running with a QuickBooks Online account ASAP. However, if you do run into some hiccups along the way, there’s no need to panic. I’m gonna touch on some of the most common errors that you may see and how to resolve them.

For the error "Please delete all employees already in QuickBooks Online", this is happening due to a payroll linking issue, so you’ll want to just create a new QuickBooks Online account WITHOUT payroll turned on and re-initiate the import process and you should be good to go.

Next up, if you see the "Your file export is too large" message, this is usually because your file has more targets than your version limit allows, and this can be resolved by condensing your QuickBooks Desktop File - follow this link for information on what your version target limits are, as well as the best route for condensing you...

If the error is "There was a problem checking this company for import eligibility", there are quite a few reasons you could be seeing this, but the best steps to resolve it are to make sure your QuickBooks Online setup interview is complete. Then sign in to Desktop as the primary admin to re-export the data and then save your company name again. If this doesn’t work, then you’ll want to cancel that QuickBooks Online account and start fresh with a new one.

Lastly, if you see “We can't export your data - It may be on a network drive”, or “Export QBDT data to QBO: ERROR”, both of these are usually due to your file being saved to an inaccessible location. To fix both of these, make sure that the company file is saved to your C-drive, and then re-open from the new location and try to run the export once more.

As you can see, most of the errors that may pop up are super easy fixes and nothing to stress about. But, of course, there is always support available if you need us.

Once the migration is complete, you get to start the fun part of getting rolling with your Online account. We do suggest that you also continue to maintain your books in your Desktop account as well, just until you get a good feel for QuickBooks Online and confirm that the migration truly is the best fit for your company.

As you get started with your new account, you’ll want to double check the data that was imported. A good starting place would be your financial reports, such as your Profit and Loss and Balance Sheet. When you run these reports, make sure that your date range is set to All Dates in both Desktop and Online, set your accounting method to accrual and check the balance of each of your Accounts Receivable and Undeposited Funds accounts.

A couple report discrepancies you can expect are cash basis, inventory and multi-currency transactions. Desktop and Online don’t track transactions as paid in the same way, so if you use a cash basis method, the reports may not match up, but it doesn’t mean that there’s missing data. QuickBooks Online and Desktop also don’t calculate inventory in the same way, so you may see some differences in that category. And, as we mentioned earlier, transactions with 3 different types of currencies don’t convert to Online, so that can also affect your report totals.

If your reports all look good, you can move on to your account list, by searching Account List there in the Reports section. From here, just review all of your accounts, and edit any detail types that are needed by clicking on the account name, making edits, then clicking save and close.

Next up, you can complete your payroll setup, if that is something your company will be using. There is a guide in your QuickBooks Online account that will walk you through this process. You can also connect your Payments account, if you have an existing one, but you will need to unlink it from your Desktop program first.

And lastly, if your company tracks inventory, you’ll want to explore the different way that QuickBooks Online manages it. It is a First In First Out tracking system, and you will need to file Form 3115 with the IRS to notify them that you made this change in inventory accounting. The as of or effective date of this change will be the date you entered while importing inventory data.

Aside from those steps, you can make sure your bank accounts are all connected for future transactions to flow smoothly, simply have fun exploring the features and layout of QuickBooks Online, and continue the day-to-day process of managing your books.

Are there any options for people who may decide that migrating to QuickBooks Online isn’t the right move for them right now?

As we mentioned earlier, making the migration to QuickBooks Online is fully up to you, and what’s best for your company. If you don’t think that the move to Online is the greatest option for you at the moment, you can definitely keep on using your QuickBooks Desktop program. If you’re operating a 2020, 2021 or 2022 version of Desktop, then you can simply make sure that your program is updated, and continue business as usual. However, if you’re using a 2019 or older version, you may need to look into an upgrade to preserve all of the...

If you’re needing to upgrade, you can sign into your QuickBooks Desktop program as the primary admin and choose the Upgrade Now option on the prompt you see when you open your account. If you don’t see the prompt anymore, then you can download the latest version from the Quickbooks Desktop Manager as well. If you don’t have a current subscription and you started your account as a one-time purchase, you can still upgrade by selecting Help and then choosing Upgrade QuickBooks, selecting the version you want and clicking upgrade now. Whichever route you decide to go, just make sure that you select the Keep old version on my computer option before clicking Let’s Go.

Also, I want to say that if you end up having any questions during the update, upgrade, or migration processes, please rest assured that we have you covered. We definitely know how important your data is, so we want to make sure you feel confident managing it at every step. We’ve mentioned it a couple times, but we do have all of the information we’ve talked about today covered in more detail on our QuickBooks Community page if you want some step-by-step articles to follow. You can also reach out to our phone or chat support teams, and as always, we’re more than happy to jump in and help you on our social accounts too.