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QuickBooks versus Quicken
I have been using Quicken since the mid
1980s, long before Intuit decided to produce the more formal accounting program
that is QuickBooks (QB). While I have been working with every version of
QB since its initial introduction, I hadn't considered it preferable for use by
non-accountants until only about three years ago. Until then, QB was
really just a more powerful and complicated version of Quicken. However,
with each year's upgrade, the two programs have diverged. Quicken is less
practical for business and tax accounting functions and is more suited for
personal investment tracking.
While I do have some clients who are still
using Quicken, I am strongly encouraging everyone to use QB. The
differences between the two programs become more apparent every time I have work
on someone's Quicken data. Depending on how much I need to rely on their
Quicken data, I frequently just import it into QB so that I am better able to
use it for tax return preparation work.
What QB Doesn't Do
To be fair, there are some functions in Quicken that are not included in QB. As
with everything in life, there are trade-offs with the various choices we have.
For some people, these features are important enough to justify sticking with
Quicken and forgoing the other benefits of QB.
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Stock Values - In Quicken, you can go
online and have your stock holdings updated to their current market values.
This isn't available in QB. For more on this, see
this explanation.
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Loan Amortization - In Quicken, you can set
up a loan so that it automatically calculates the principal and interest
portions of the payments; while in QB, you have to manually enter each amount.
I have used this and have found it never to match up exactly with the banks'
calculations of the breakdown, requiring manual adjustments to the
pre-calculated entries. There are plenty of amortization programs
available if you want to see the approximate breakdown of future payments.
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On-Line Banking - This isn't really a
difference in features, because QB and Quicken both allow the same online
banking capabilities. The difference is with the pricing for that
service. While I don't know how all banks set their prices, I do know
that the bank we use for most of our corporate and personal accounts,
Regions,
charges twice as much for online QB ($19.95 per month) as they do for online
Quicken ($9.95 per month). One other twist that may or may not be unique
to Regions is the fact that corporate accounts are not even eligible to do
online banking through Quicken. They must use QB in order to have online
banking capabilities.
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Big Benefits of QuickBooks
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Importing Data - As long as your Quicken
version isn't newer than the version of QuickBooks you are using, you can
import all of your Quicken data into QuickBooks without losing anything. For
example, you can't import Quicken 2003 data into QuickBooks 2002.
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Backing Up Data Files - With Quicken,
when you use the built-in backup feature, it just makes copies of the four or
five separate data files that it uses for each company or personal file.
The backup copies are the same size as the original, which are often several
megabytes in size, making it impossible to backup onto a single floppy.
While it is possible
to
zip the multiple files into one compressed file for easier handling and
emailing, you have to do this manually. This is a big hassle. I
have recommended to Intuit for years that they include an automatic zipping
and compression feature in the Quicken backup, as is the case with other
programs, such as
ACT! (which
automatically zips 236 individual files into one backup file in my case); but
they continue to ignore that request. QB, on the other hand, only uses
one data file; and when you use its built-in backup feature, it compresses the
file to about one-fifth the size of the original working file. This
makes storing and emailing the backup file much easier.
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Accountant's Review - Besides having the
data in a single file and the automatic compression of the backup file,
another very big advantage of QB over Quicken is the Accountant's Review
function. It allows you to make a special copy of your data file to send to
your outside accountant to work with. We can make changes to it while you
continue to use your copy. Even several months later, we can then send you our
changes to merge into your file so that we are more in synch with each other.
With Quicken, you have to stop using your data file while we make changes and
then send you back the entire data file, or else you have to reenter
everything that you have done since sending us the data file. This has
been working beautifully in enabling me to keep the clients' books in synch
with their tax returns.
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Reports - QB can prepare much more useful
financial statements and detailed reports than can Quicken, making it much
more efficient when preparing tax returns. For example, one of the
standard reports I prepare in QB is a comparative balance sheet, looking at
the changes between the current year and the previous one. QB can
automatically give me the dollar change between the two dates, something
Quicken doesn't do.
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True Double Entry Accounting - In true
accounting, there is a beautiful method of assuring accuracy with each entry
requiring two balanced sides. You can't enter anything without having it
affect at least two different accounts. When performing reviews, if you find
that one account is out of balance, there must be another account similarly
out of whack. That's why trained accountants understand how important it
is to work with and reconcile balance sheet accounts. This can be done
almost as reliably in QB as in most conventional full blown accounting
programs. With Quicken, this level of accuracy is not possible because
that program actually allows single sided entries. Having personally
wasted countless hours trying to track down the source of funny numbers in
Quicken, I have lost all confidence in its ability to provide the kind of
reliability I require when preparing tax returns and providing advice to
clients.
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Remote Access - Another nice feature of QB
since the 2002 version is Remote Access. Using a website with a special
password, those of us with the Premier Edition of QB can take over the QB
program of clients over the Internet. This has been very useful in showing
people how to work with QB without the need for anyone to travel. So far, I
have only used this three or four times with a client in Texas who was setting
up his new corp and personal info on QB. It worked very well and was much more
effective in teaching him QB than just describing things in an abstract way.
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Tax Return Integration - While I don't
currently use this feature, I expect to soon have the capability to import
data directly from QB data files into my
Lacerte tax preparation
program, saving keypunch time and hopefully reducing errors. That is
already possible between QB and some of Intuit's other tax prep programs, such
as TurboTax and
ProSeries.
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KMK
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This page was last updated:
Sunday, August 06, 2006 05:08:56 PM
Ozarks Time by KMK
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