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Things To Consider Before You Convert QuickBooks Desktop to Online

How To Convert QuickBooks Desktop to Online in 7 Steps

 Note: Please take notice of the authors below who created this excellent article. 

If you’d like to access your QuickBooks software from anywhere, it’s time to switch to QuickBooks Online. Converting from QuickBooks Desktop to Online is quick and easy most of the time, and if you get stuck, you can contact QuickBooks support for free. This guide will help you convert from QuickBooks Desktop Pro or Premier to any version of QuickBooks Online, except Self-Employed.

If you don’t have a QuickBooks Online account yet, you can choose between 50% off for three months or a 30-day free trial when you sign up.

Get QuickBooks Online

Tip: You have 60 days from the beginning of your QuickBooks Online subscription to make a conversion from QuickBooks Desktop. If 60 days have passed, you can cancel your current subscription and set up a new QuickBooks Online company. Multiple companies can be set up under the same email address.

Watch the tutorial video below or read the step-by-step instructions that follow.

Things To Consider Before You Convert QuickBooks Desktop to Online

Although we rated QuickBooks Online as the best small business accounting software, there are a few distinct advantages to QuickBooks Desktop over QuickBooks Online. QuickBooks Desktop is usually faster for experienced bookkeepers, has more options available for dealing with inventory, and can report estimated versus actual job costs. If you’re unsure about whether the switch to QuickBooks Online is right for your company, read our article that compares QuickBooks Online to Desktop to find out more.

Most information from QuickBooks Desktop will transfer automatically to QuickBooks Online, although some features in Online are named differently and might not work exactly the same. QuickBooks provides a list of Desktop features and a description of how those features will transfer to QuickBooks Online.

The steps discussed in this article are for converting a QuickBooks Desktop file to QuickBooks Online from QuickBooks Desktop Pro, Premier, and Accountant. For QuickBooks Mac, you can follow Intuit’s conversion instructions for QuickBooks Mac. If you use QuickBooks Enterprise, Intuit also has conversion instructions for QuickBooks Enterprise.

Use the following seven steps to convert QuickBooks Desktop to QuickBooks Online:

Step 1. Check the File Size Requirements

Once your QuickBooks Desktop file and press F2 to determine the total target count. If your file exceeds the maximum 350,000 targets, you can try to reduce the targets by condensing your QuickBooks file. If condensing doesn’t work, you’ll have to settle for transferring lists (explained later) instead of doing a conversion.

Product information screen in QuickBooks Desktop

Product information screen in QuickBooks Desktop.

Step 2. Prepare Your QuickBooks Desktop Data for Export to QuickBooks Online

It’s best to update your QuickBooks file as much as possible prior to your conversion so that your bookkeeping is not behind as you’re trying to learn the new processes of QuickBooks Online. Make sure to reconcile all bank accounts, process payroll, and adjust inventory before getting started.

It’s also a good idea to back up your company file in case anything goes wrong. You can make a backup of the data file by going to File, then Back Up Company, and then clicking on Create Local Backup, as shown below:

Creating a backup company file in QuickBooks Desktop

Tip: QuickBooks recommends your company file be located on a local drive before converting to QuickBooks Online. If you normally access the company file from a network drive, restore the backup file you just created onto your local drive and use that file for your QuickBooks Online conversion.

Step 3. Create a QuickBooks Online Account

If you don’t have your QuickBooks Online account yet, then you need to create one. Visit QuickBooks Online and subscribe to your preferred version of QuickBooks Online prior to starting the conversion process. If you’re not sure which version is best for your business, read our QuickBooks Online comparison. You can either sign up for a 30-day free trial or get a 50% discount for the first three months.

Provide Basic Company Information

When setting up your QuickBooks Online account, you will be required to input your company’s name and description, as shown below:

Setting up your QuickBooks Online account

Step 4. Export Company File to QuickBooks Online

Go back to your QuickBooks Desktop program and sign into the company you are converting to QuickBooks Online. Within your QuickBooks Desktop company, click on Company in the top menu bar and select Export Company File to QuickBooks Online, as shown below:

Export your QuickBooks Desktop file to QuickBooks Online

If you don’t see the “Export Company File to QuickBooks Online” option, you’ll need to download the most recent QuickBooks Desktop update. Select Update QuickBooks from the Help menu and follow the instructions. Once the update is complete, export the company file as shown above. You may need to close and reopen QuickBooks Desktop for the update to take effect.

Tip: QuickBooks stops supporting desktop programs after three years, so you may not be able to update older programs. One workaround is to get a free 30-day trial subscription to the latest QuickBooks Desktop Pro. You should be able to export your company file to QuickBooks Online after you open it in the new program.

Step 5. Sign Into Your QuickBooks Online Account Through the Desktop Program

After selecting the data to export to QuickBooks Online, your QuickBooks Desktop program will ask you whether to proceed to migrate your file or try it first. Since you’ve already created your QuickBooks Online company, click Move Now:

Preparing to move your data to QuickBooks Online

Indicate Whether You Want to Import Inventory into QuickBooks Online

If you currently track inventory, QuickBooks will ask whether or not you want to import inventory into QuickBooks Online. If you say yes to this, your inventory will be recalculated in QuickBooks Online using the first in first out (FIFO) inventory method from the start date provided. If you’re unsure of whether you want to import your inventory, click “no.” You can import your inventory later from an Excel spreadsheet.

Identify whether or not to import inventory to QuickBooks Online

Tip: If you change your inventory method from average cost to FIFO, it must be reported to the IRS on Form 3115. For that reason, we recommend consulting a tax professional before bringing over your inventory to QuickBooks Online.

After identifying whether you want to import inventory to QuickBooks Online, QuickBooks will then ask you if you have a QuickBooks Online account. Since you already set up a QuickBooks Online account, select Yes, sign me in:

Connect QuickBooks Online account to QuickBooks Desktop

After selecting Yes, sign me in, a log-in screen for your QuickBooks Online account will appear on your QuickBooks Desktop account, as shown below:

QuickBooks Online sign-in screen in QuickBooks Desktop

Verify Your Identity

When signing into your QuickBooks Online account through QuickBooks Desktop, there will be a prompt to verify your identity. Check your phone or email and then enter the code to proceed:

Identity verification in QuickBooks Desktop

Step 6. Select Your Company in QuickBooks Online

After successfully logging in to your QuickBooks Account, select the QuickBooks Online company that you want the data to import to from the drop-down list. If you have multiple companies, be careful to select the correct one, as the conversion will replace any existing data. If you don’t want to save it to an existing company, you can create a new company.

Select which QuickBooks Online account to import QuickBooks Desktop data to

Step 7. Copy Data File

After you select your company, QuickBooks will work for a few minutes and then give you a confirmation screen similar to this:

QuickBooks data file transfer confirmation

QuickBooks emails you when your QuickBooks Online company is ready, but this could take several hours for a large file. Once you receive an email similar to the one below, click on the Complete your setup button to log in to QuickBooks Online and review your data:

Email notification that QuickBooks Desktop data is available in QuickBooks Online

Transferring Lists Instead of Converting a QuickBooks Desktop File

Tip: Exporting lists from Desktop and importing them into Online is only necessary if you were unable to convert your Desktop file using the seven steps above. For instance, this may happen if you have over 350,000 targets or your desktop file is corrupt. If your conversion was successful, you’re done.

An alternative to converting your Desktop file to an Online company is to export important lists from your QuickBooks Desktop company and import them into your QuickBooks Online company. This will transfer your chart of accounts, customers, vendors, products, and services. However, you can’t transfer past transactions in this manner, so you’ll need to input beginning balances.

Transferring lists from QuickBooks Desktop to QuickBooks Online is a two-step process. First, export the lists from Desktop as an Excel spreadsheet. Second, import the Excel spreadsheet into your QuickBooks Online company.

How to Export Lists from QuickBooks Desktop

By exporting the following lists from QuickBooks Desktop to Excel, you can save hours of data entry in your new QuickBooks Online company:

Tip: When importing Excel workbooks, QuickBooks Online only imports the first worksheet within a workbook. After exporting Excel workbooks from QuickBooks Desktop, be sure your data is in the first worksheet, or tab, at the bottom of the Excel screen.

What’s not imported when you move from QuickBooks Desktop to QuickBooks Online?

While most of your data will import when switching from QuickBooks Desktop to Online, there are a few items that won’t convert, including:

  • Bank and credit card account reconciliation reports: Once you convert to QuickBooks Online, you’ll need to start your reconciliations from where you last ended them. If you need access to prior reconciliation reports, you can still get them from your desktop version as long as you don’t delete the files.
  • Recurring credit card charges: You’ll need to cancel your existing recurring credit card transactions in the Merchant Center. Once that’s done, rebuild them in QuickBooks Online by creating recurring sales receipts.
  • Audit trail: There’s nothing you can do about your past audit trail other than retain a copy of your desktop version and the information contained in it. You will, however, get an improved audit trail with QuickBooks Online going forward.
  • Inventory from QuickBooks for Mac: While you can’t transfer your inventory from a Mac computer, if you have access to a computer running Windows, you can make the transfer there.
  • Reports: QuickBooks Online contains a variety of reports that can replace many of those you’ve been using in the desktop version. The best solution is to find a new QuickBooks Online report and begin using it.

Wrap Up

Congratulations on successfully converting from QuickBooks Desktop to QuickBooks Online. Be sure to check out a few of our video tutorials to learn the basics of using QuickBooks Online.

About the Authors

Tim Yoder

Tim Yoder

Tim worked as a tax professional for BKD, LLP before returning to school and receiving his Ph.D. from Penn State. He then taught tax and accounting to undergraduate and graduate students as an assistant professor at both the University of Nebraska-Omaha and Mississippi State University. Tim is a Certified QuickBooks Time (formerly TSheets) Pro, QuickBooks ProAdvisor for both the Online and Desktop products, as well as a CPA with 25 years of experience. He most recently spent two years as the accountant at a commercial roofing company utilizing QuickBooks Desktop to compile financials, job cost, and run payroll.

Mark Calatrava

Mark Calatrava

Mark Calatrava is an accounting expert for Fit Small Business. He has covered more than 50 accounting software for small businesses and niche industries and has developed an in-depth knowledge of the important features of accounting software and how the importance of these features vary by business.

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