There have been rumors about QuickBooks Desktop being retired for many years, yet QuickBooks Online still isn’t the same capability level as Intuit’s older software for contractors. Some recent announcements from them give us more of a direction, and these announcements weren’t given to the general public. We’re sharing what you need to know this week.
Topics we cover in this episode include:
- Recent announcements from Intuit on QuickBooks Online
- QuickBooks Desktop became a subscription model in 2022
- QuickBooks stopped selling the payroll subscription to the general public
- Other accounting software options
- Key things to look for in bookkeeping software
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Wade Carpenter, CPA, CGMA | CarpenterCPAs.com
Stephen Brown, Bonding Expert | SuretyAnswers.com
[00:00:06] Wade Carpenter: There have been rumors about QuickBooks Desktop being retired for many years, yet QuickBooks Online still isn’t the same capability level as Intuit’s older software for contractors. Some recent announcements from them give us more of a direction, and these announcements weren’t given to the general public.
Come on in, let’s talk about it. This is the Contractor Success Forum. If you’re new here, I’m Wade Carpenter with Carpenter & Company CPAs. With me as always, my co host Stephen Brown with McDaniel Whitley Bonding & Insurance.
Stephen, I know you probably cringe when you hear QuickBooks from a contractor. Any initial thoughts to start us off on this topic?
[00:00:41] Stephen Brown: I don’t really cringe. I mean, QuickBooks provides a whole lot of tools and things that I need for bonding, but at some point, there are a lot of things that QuickBooks doesn’t know about construction accounting. But, that’s more your area than mine.
So, QuickBooks, you bought the software, you’re operating a desktop version of it, and you control all your data and everything.
Do you think most contractors feel like this is forcing you to an online version, it’s gonna keep them from securing their information, or what’s the logic there, Wade?
[00:01:14] Wade Carpenter: Well, Intuit has been trying to go to this subscription model for many years, and there’s been rumors about them discontinuing the desktop product. And if you ask any Intuit sales rep, QuickBooks Online is the best thing since sliced bread. And we have a lot of contractors that run it, but for those that truly know the capabilities, you can definitely get better cost code structure and better capability and reporting for a contractor if you set it up properly.
And the truth is, even 10 plus years after they came out with the QuickBooks Online product, it’s still not up to speed with the desktop.
Recent announcements from Intuit on QuickBooks Online
[00:01:56] Wade Carpenter: But there have been some recent announcements that have not been made to the public, only to accountants, that I wanted to throw out today. if
[00:02:04] Stephen Brown: Top secret stuff, huh? What did you learn?
[00:02:07] Wade Carpenter: I don’t know if it’s top secret, but they have had a history of doing this, so I wanted to talk through the timeline and are they really sunsetting it? It actually looks like they are trying to.
But before anybody gets upset, hear me out. On November 30th of 2023, Intuit sent an email out to their accountant community, the ProAdvisors, not to the general public, basically saying that as of July 2024, the general public will no longer be able to buy QuickBooks Desktop anymore unless they have a subscription. Okay. Or unless they are on the enterprise model, which is a little higher end software and it does have a few more bells and whistles, but the main thing is the database and the capabilities of multiple users. Anyway. There were several things in there that I wanted to talk about.
[00:03:03] Stephen Brown: Sure.
[00:03:04] Wade Carpenter: We’ll talk about some of the timeline.
They’ve been trying to sunset the QuickBooks Desktop product for many years. And as I’ve said a few times on this podcast, I’ve got a general contractor running at $150 million on QuickBooks Desktop.
There are definitely some capabilities that they have tried to add to the QuickBooks Online product, but this is a detrimental thing to any contractor that doesn’t really want to spend $20,000 on construction software. Or not just contractors, but, manufacturers or, say, service businesses with inventory for companies that have sales orders, they still don’t have things like sales orders in the QuickBooks Online product. It’s just not the exact same thing.
So there are some CPAs like me that are holding on to this. A lot of them don’t necessarily do construction like we do, but they are trying to sunset this, so I wanted to talk about it. What they are going to allow accountants to do is continue to buy the software. They’re saying at least right now, they’re not going to stop making it. But if you lose your subscription, you’re out of luck.
[00:04:10] Stephen Brown: If you lose your subscription to a desktop version you can purchase?
[00:04:14] Wade Carpenter: Yes. So, after July 2024, if the general public loses their subscription, as well as probably the accountant community, which I’ve heard some rumors about the way they’ve treated some people, that you are just out of luck. You just can’t buy the desktop product anymore. And I think it’s going to cause some problems with some people.
You know, a lot of people have tried to move to the online version. And if they are looking for true phase code, cost code, they’re going to have to move to getting one of these third party softwares.
And some of these people like Buildertrend, which is an add on to QuickBooks, ha ve been marketing heavily in the last few years. I’m not picking on Buildertrend or any of these other ones, JobTread, or there’s a lot of them out there, but the truth is they can make a huge mess of your QuickBooks online if you do not set it up properly. As well as it does not provide the same capabilities.
Now it does sometimes provide better capabilities, like working with your subcontractors and it’s built into QuickBooks, but that’s where I wanted to talk about some of these other things, as well as some of the things that Intuit has done to start sunsetting, I would say, the desktop product.
[00:05:35] Stephen Brown: Well, before you get into that, what was your initial reaction when you found out about this? Pros and cons for the contractors.
[00:05:43] Wade Carpenter: I think it takes away a valuable product for contractors that are not able to go out there and afford $15, $20,000 a year on software.
But am I surprised it’s coming? No. And that’s why I wanted to talk about some of the things that they’ve done. But what I felt was a little bit, I don’t want to call it shady, but unfair. But they had this in October, November, I’m trying to remember the time frame. I believe it was mid October, they had their QuickBooks Connect, which is their annual convention. They talk about all the things they’ve added to QuickBooks Online, and that’s their huge national convention. Said nothing about this, and then they come back and spring this on everybody else, after they’ve tried to pump all these things up that they’re supposedly doing. And it just seems like a little dirty pool as well as the fact that they are not telling the general public this is going to be what’s happening.
[00:06:45] Stephen Brown: So to quote Steve Martin in The Jerk, it’s a profit deal.
[00:06:49] Wade Carpenter: Yeah, something like that. But did we see this coming? Maybe, yeah, absolutely.
One of the things that people should know, and I do have some contractors out there that have been running QuickBooks Desktop for many years. And If they don’t need, say, the payroll subscription, they could be still running the same version that they had, I know, I just picked up one that was still running one from 2017, and QuickBooks model was one of the main things was if you needed to use the payroll tables, you had to upgrade every three years, or t hat kind of thing stopped working. Or some of the other things like some of the inventory stuff.
QuickBooks Desktop became a subscription model in 2022
[00:07:30] Wade Carpenter: But in 2022, a lot of people do not know this, the desktop software became a subscription model. And if you bought that version of the software after that, when 2023 rolls around and you do not renew that subscription, that software is completely useless. So it just will not work. And that’s part of what you were saying about your data is, you’re buying software, but you expect desktop software to be, you own it and not have to, deal with the subscription every year. Not to mention, you can’t really do anything with it unless you renew your subscription or you upgrade your QuickBooks to QuickBooks Online, which is what they’re trying to do.
[00:08:14] Stephen Brown: Yeah, I’d still be very nervous about the security of my company information.
[00:08:19] Wade Carpenter: Right.
[00:08:20] Stephen Brown: Online versus to be able to control it in house.
[00:08:24] Wade Carpenter: Well, to be fair, a lot of that has gotten better. The banks and all this stuff, they have done a lot of things to those kind of things online. But what I’m afraid of with this subscription model, and I haven’t confirmed this, but say you’ve got that contractor that I was just referring to had a 2017 model version of it, and did not know about this, because they’re not telling the general public about it. So, their computer crashed, and even if they have the old disc or the CD and they install it on a brand new computer, I don’t think they’re going to be able to license it. So, even though you bought that software, there’s an activation and you may not be able to activate it. I don’t know that for sure, but I think that’s the way they’re going to work it.
[00:09:10] Stephen Brown: It sounds like Intuit is going to be slammed with tech calls of people freaking out.
[00:09:16] Wade Carpenter: And there’s going to be some people in my ad because they’re not telling this to the general public. I thought I would send a letter out to my clients that we actually started drafting, that basically says if you do not have a subscription, you may want to buy it before July 2024, or you’re just, out of luck. You’re not going to be able to use this software.
You’re going to have to look at something else, probably something more expensive. If you don’t need heavy duty job costing, maybe you can get by with QuickBooks Online, but you’re going to have limited functionality.
[00:09:48] Stephen Brown: Mm hmm.
QuickBooks stopped selling the payroll subscription to the general public
[00:09:49] Wade Carpenter: And there is one other part. I hate to monopolize the conversation, but one of the other things they did in June of 2023 is they stopped selling the payroll subscription to the general public without notice.
So, the payroll subscription for QuickBooks Desktop is very much different for a contractor. You can use the QuickBooks Online, basically their online payroll subscription, and import it. And even if you’re using the time tracking stuff that they bought, T sheets, now it’s called QuickBooks Time, and yes, it will pull that information in to the payroll side of it. But it’s a separate system and it never gets that job costing into the general ledger. The only way to do it is basically with journal entries, and you cannot get the same level of costing.
One of the beauties of the desktop version with construction, especially if you’ve got your own people that you’re sending out on jobs, you’re trying to job cost it, number one, it would do the payroll and code it to the job. Not just the gross amount, but also the payroll taxes and burden, that kind of stuff. It’s workers comp. And believe it or not, the certified payroll reports, that were actually printable and usable. I have some that my team prints for contractors every week for these certified payroll reports.
You’ve got to go to a lot higher level with the ADPs or Paychex to even be able to do certified payroll. Plus you never get the job costing and even if you do, it’s still the same kind of thing as you’ve got to import it. And it’s going to be journal entries and it’s a separate system.
So if you’re trying to pull job costs together, you’ve got your materials and subs and equipment in one place, and then you’ve got your labor in another, then it’s, it never meshes. And that’s why a lot of contractors never really get a good picture of how they’re really doing on a job.
[00:11:49] Stephen Brown: Yeah. That’s scary. That’s scary and it defeats the whole purpose of having an automated accounting system.
Other accounting software options
[00:11:56] Wade Carpenter: Right. And there are, again, there are some other ones that– I try not to get on this podcast and promote or, disparage any other softwares.
One of the ones that I’ve had some people asking me about, and actually one of our YouTube listeners asked me recently was about Foundation software. They do make some good software, a lot of them do, and a lot of them will have their own payroll module. And Foundation actually is one that will import into QuickBooks Desktop or the online version. And it will do the job costing, but again, it’s behind the scenes, and it won’t get pulled to your job costing in your ledger, which is where you need it to be in one place to see really how you’re doing.
Again, I’m not trying to push anything on anybody, but Foundation actually does have a standalone payroll software that you can buy just like ADP or Paychex, and it does a wonderful job of certified payrolls. If you’ve got union labor, they do a wonderful job of union labor and the union reports and a lot of that.
I’ve had people that they’ve got people spending time weekly, full time, trying to keep up with these union payroll reports that have got to be done. They’ve got a good product and it’s an alternative, but it’s not also the same thing as being able to have it directly integrated with your software.
Key things to look for in bookkeeping software
[00:13:20] Stephen Brown: So what are some words to the wise about if you wanted to switch your accounting software programs? I have all sorts of stories from my contractors over the years with many different products. Some of them are great. Some of them are a nightmare. What are the key things you want to look for?
[00:13:41] Wade Carpenter: Well, just off the top of my head, again, QuickBooks Online for the small contractor, just getting started, and you don’t really need anything better than, say, labor, material, subs the top level account level stuff. You can get some of that out of there, and they have tried to improve some of that stuff.
In 2023, they actually did add one of the reports that I’ve been looking for for years with the estimates versus actual, and by their version of the cost codes for the products and services, but it is so hard to work with that.
It takes a lot of extra lift to, number one, set it up right. And to be fair, a lot of people that set up QuickBooks Desktop don’t set these, what I call, two-sided items up properly. But it’s even less intuitive in QuickBooks Online. And now that I said intuitive, I suppose Intuit being the parent company’s name probably is not really a good fit here.
So again, what do I see from this? Number one, for the small contractor, they may be fine with that. A lot of them are not going to know the difference. But for those that are trying to get that next level, once you start getting above half a million to a million– and again, this is relative. If you’re trying to get bonding, you’re trying to really stay on top of where you are, quickBooks Online is just not there yet, even after this many years.
And, a lot of people say, well, okay, we can get that out of BuilderTrend or JobTread or all these other different ones. And you can, but the problem is setting it up properly. But it’s also, some of the stuff is one way synced between the two.
And sometimes I see people doing double work there. The biggest thing is setting those up properly. And a lot of people, just the chart of accounts, that’s never set up properly and it becomes a huge mess and you can completely wreck your books if you just connect it and not know what you’re doing. And the software reps says hey, it’s fine on our side. What do we care?
[00:15:44] Stephen Brown: Mm.
[00:15:45] Wade Carpenter: But it also I think is going to have people looking at other solutions.
QuickBooks Enterprise is still going to be out there and it is a little more expensive. It’s going to be a few thousand as opposed to a few hundred every year, but it’s going to have people looking at some of the other products like, Sage has their Sage 50, which was the old Peachtree product, which goes back many years.
Some of the other ones, the Sage 100, which was Master Builder. There’s a Sage 300 that was the Sage 300 Construction Real Estate. The old Timberline software, one of my previous clients actually built and developed and eventually became that, and he’s since retired.
But it’s gonna have people going into different spaces for this, and to get really good books or get to that next level, I think it’s going to take people having somebody really work with them, as well as it’s going to just cost them much more money to get good information.
[00:16:45] Stephen Brown: Okay. Well, this is great information, Wade. I think it’s interesting how these things come up and how they affect everything. And bad information, it’s hard to manage a company with bad information, isn’t it?
[00:16:58] Wade Carpenter: Yeah. 20 something years ago, I said the same thing about the desktop product. As an auditor, and you probably see some of the better higher end systems, but a lot of times, you know, I would come behind QuickBooks, even the desktop product, that was never set up correctly. And you try to do an audit and it can be a complete wreck when it’s not done properly.
[00:17:16] Stephen Brown: Mm hmm.
[00:17:17] Wade Carpenter: But I do see there’s some possible repercussions of this. There’s been some talk in my industry about a lot of CPAs do not want to learn QuickBooks Online. It’s just a clunkier software that takes longer. There is a learning curve for anything.
[00:17:33] Stephen Brown: Mm hmm.
[00:17:34] Wade Carpenter: But we can’t be as fast working with it. It’s slower to get around. There was actually a great tool that was put out last year by a CPA named Hector Garcia. It’s called Right Tool. It makes it suck less, as far as getting around, and is that the proper legal–
[00:17:51] Stephen Brown: Yeah, no, I think that’s very descriptive, yes.
[00:17:53] Wade Carpenter: Okay, it makes it suck less. But I do think there was talk of some CPAs retiring if they’ve got to learn new software. And there’s a lot of people in my industry that are aging out, people with this experience, just like in construction.
But I do see people, as we said, having to look at different alternatives and, maybe at some point in the future, QuickBooks will add this stuff, but I am not seeing it and they’ve been promising it for years. So, I just think it’s personally sad.
But I guess takeaways for today is number one, if you set up on QuickBooks Desktop and you don’t have a subscription, once you started in 2022, you’re stuck on it.
But if you don’t have one, or if you got one of these legacy ones, you may want to go ahead and buy it, because come, I think it’s July 1, you’re not going to be able to buy it, and it’s just, you’re out of luck. So.
[00:18:49] Stephen Brown: Okay, good advice.
[00:18:50] Wade Carpenter: I just wanted listeners to know. And if you see a lot of these programs too, if you have any advice from what you see from your side.
[00:19:00] Stephen Brown: I can just say that you look for an accounting software program that has all the bells and whistles. It can do more than you need right now, so you’re impressed by all the features that it has. It’s got a high price tag and the salesman tells you it’s just effortless for you to set up. And I’ve never known one really for that to be the case.
So much of it depends on the construction oriented CPA’s guidance. So my recommendation would be talk to your construction oriented CPA before buying any accounting software, but you should know that already because they’re your point person for all things accounting.
And then the second thing is accurate information and reports are worth their weight in gold to you to allow you to make more money. We preach it all the time. I need it from a surety bonding standpoint. Your bank needs it, but more importantly, you need that information to see how your jobs are performing.
So that’s my main comment.
[00:19:58] Wade Carpenter: Your point is well taken. I guess I didn’t say that because there are some special contractor programs and there are consultants that are not CPAs, but people that have been in the industry. And there are some really good ones, but one of these, the biggest things that, if you’re buying this higher end software, you also So, You can’t just look at the cost of that software, you got to look at the cost of implementing it, because as we’ve said, people can spend a bunch of money on this, but never get it set up properly, and it make a bigger mess than anything.
But a good friend of mine that does these implementations on some of these direct softwares, she’s not a CPA, but, the rule of thumb in the industry is you need to budget at least two to three times the cost of the software in getting it initially set up properly. So just things to keep in mind.
So I guess let’s go ahead and wrap this up. I hope this has been informational and if nothing else, if you’ve got a QuickBooks desktop subscription, I’m not saying it’s time to bail on QuickBooks, but you probably need to make sure you’ve locked down your subscription.
So with that said, thank you all for listening to Contractor Success Forum. Check out the show notes at Contractorsuccessforum. com. or the Carpenter CPA’s YouTube channel for more information. We would appreciate it if you would consider subscribing, follow us every week, as well as if you would comment on this episode. We’d love to hear your feedback on what you feel about the software and how they’re treating this. With that said, we will look forward to seeing you next week.