Cloud-based Accounting Software Review: Zoho Books vs QuickBooks Online

“Cloud is the future”

– All engineers I know

Technology can make us obsolete before we realise it. In recent times, the ever-changing technology is moving towards cloud computing. Anything which is on the cloud can be accessed by anyone located anywhere around the world. 

In India, when it comes to using accounting software, Tally is one software that has a good reputation. Tally was launched in 2009 and literally every small business started using it. It was a rage back then. Several accountants took up courses to learn tally. Even the basic requirement for jobs in accounts, was knowledge of how to use Tally. 

One thing that tally has been unable to keep up with, is the changing technology. Despite having a reputation of being the best accounting software, Tally has been unable to migrate to cloud. It is confined to the laptop or desktop on which it is loaded. During the lockdown, a lot of businesses could not access their records. Why? Because Tally was loaded on the desktop at their workplaces.  

Today, when we’re moving towards the possibility of work from home, even small businesses need to have robust accounting software. It will not only make the records accessible but there will also be less chances of losing data due to virus attack. The benefits of using a cloud based software are too many. Refer to this link, https://bit.ly/2AvCiHU to read a detailed article on the ‘Top 5 reasons to use a cloud-based software’.

In the cloud-based accounting software domain, in India, there are 2 market leaders – Zoho Books and QuickBooks. Let’s analyse both ‘Zoho Books’ and ‘QuickBooks online’ to understand which one can be a better fit for your business needs. 

1. User interface (UI)

Zoho Books and QuickBooks online both have an easy to understand UI. The UI is neat, looks professional and is easy to understand. Someone without an accounting background would also understand the basic functionalities of the software. 

Dashboard is a common feature on both the softwares. The dashboard shows a summary of the expenses, incomes, profit and loss, bank balances, etc. Apart from the dashboard, the softwares are further divided based on functionalities related to sales, purchases, banking, accounting entries etc. 

QuickBooks online has a slightly better UI which looks and feels more professional and neat as compared to that of Zoho Books. However, both the platforms provide the same functionalities and are easy to use. 

2. Linking bank accounts

One of the interesting features that both these softwares offer is that the firm’s bank accounts can be linked easily to the respective Zoho Books or QuickBooks accounts. 

Another additional feature is that bank account entries can be posted by the software automatically. Once certain rule sets are defined, the bank entries will be automatically categorised by the software. 

For example, one of the rule sets that can be defined – “If the description of the transaction on the deposit side of the bank statement contains UPI, then book it as payment received from customers.” In that case, all deposit side transactions in the bank statement where the term UPI is used will be categorised as payments received from customers. 

Where defining rule sets becomes tricky, manual entries can be done just like in other softwares like Tally. However, in Zoho Books and QuickBooks online once the bank accounts are integrated, the bank statement of the respective period will get updated on the platforms. It need not be accessed separately using the bank websites.

There is no significant difference between the two softwares when it comes to setting rules for transactions or connecting the bank accounts.

3. Accounting and the delivery challan conundrum

Both the softwares, cover all the basic accounting functions. Invoices can be customised, timely ledgers can be easily maintained for all customers, journal entries can be entered. All basic accounting functions can be performed on both the softwares. 

When it comes to delivery challans, Zoho Books let’s you create a delivery challan first and the same delivery challan can be converted to an invoice. However, QuickBooks online doesn’t have an option to create a delivery challan, instead it gives an option to print a delivery challan after creating an invoice. In businesses that mostly rely on ‘Sale on approval basis’, delivery challans are extremely important because invoicing is done at a later date depending on customer approvals. Hence, delivery challan is an important subset which is not available on QuickBooks but is available on Zoho Books. 

4. Sales approvals and Purchases approvals

If an organisation works strictly on the hierarchical flow and all transactions of either sales or purchases need to be approved by the manager before submitting, then Zoho Books provides a default option of Sales approvals and Purchases Approvals. QuickBooks does not provide approval as a default function. It requires us to purchase another application called ‘Approval max’ which can be integrated with QuickBooks online. 

5. Reports

Both Zoho Books and Quick books lets you generate both basic as well as advanced reports. Balance sheet, profit and loss account, invoice ageing, item-wise sales, GST return extracts, etc. are all easily available on both the platforms. GST returns can also be uploaded directly from the respective platforms to the GSTN website. 

6. Payroll

Employee details and timesheets is a default option available on QuickBooks online. Zoho Books does not offer payroll related options. It offers the option of ‘Timesheet’, however, QuickBooks does a better job in this functionality.  

7. Inventory

Both the platforms help us maintain our inventory. However, Zoho goes a step further and helps us maintain detailed warehouse wise inventory in their add on software called Zoho Inventory. Zoho inventory needs to be purchased separately. So if an organisation wants to maintain advanced inventory Zoho Inventory is a good option. For basic inventory functionalities like stock in hand and item-wise sales lists, both Zoho Books and QuickBooks are equally effective. 

8. Mobile applications 

Android and iOS mobile applications are available for Zoho Books and QuickBooks online. The applications have a great UI and all the data entered can be accessed very easily on the mobile applications. That is the main benefit of a cloud-based software, it provides real time data even to someone who wants to remotely access it. 

9. Training resources

Both platforms provide ample videos and written material for all functionalities of the respective softwares. Also, a helpline is available which can be contacted for any queries. Training on both the softwares is fairly easy considering both the factors – the available resources and easy to use software. 

10. Pricing 

Trial versions of both softwares are available. Zoho Books for 15 days and QuickBooks for 30 days. 

Zoho Books 

Zoho Books is available on differential pricing based on the requirement of an organisation.

The Standard version is available at Rs. 2500 per year but has limits like the number of invoices that can be issued is restricted to 5000 invoices. 

The Professional version is available at Rs. 9999 per year, has some add ons and restrictions like 10000 invoices per year. 

The Premium version is available at Rs. 19,999 per year, has advanced inventory options and restrictions like 25000 invoices per year. 

However, with effect from 1st July 2020, the pricing is changed and can be accessed here – https://www.zoho.com/in/books/pricing/new-pricing.html

Zoho also offers additional softwares like Zoho People (for employee management) and Zoho Inventory (advances inventory tracking) at different prices. 

QuickBooks 

QuickBooks is currently available at a discounted rate of Rs. 4800, whereas MRP is Rs. 8000 for small businesses in India. Accountants who maintain accounts of several companies can use QuickBooks at a discounted rate of Rs. 223/month/license. Licenses can be purchased in bulk at discounted rates by accountants.   

It does not offer differential pricing. One important caveat that it mentions is that yearly renewals will be at MRP. So in effect the price is Rs. 8000 per year. 

Author’s opinion 

Organisations, no matter how small, must look to improve their accounting systems. As a Chartered Accountant, I strongly recommend organisations to move to robust softwares which don’t run on the risk of getting outdated and aren’t prone to virus attacks. 

Since Zoho Books and QuickBooks are both market leaders, any of these softwares will work well for you. India is a price sensitive market and hence for small businesses, Zoho provides a better option. Also, it has many add-on features at reasonable prices. So as an organisation grows in size, Zoho will be able to support different needs since it provides integrations at all levels. 

When it comes to QuickBooks, even though it has a better UI since Intuit has developed the software, it is not priced optimally. However, if you’re a mid-sized organisation and opting for the Professional version of Zoho, QuickBooks is a better option. At a better price, you’ll get better employee management and there’ll be no restrictions on the number of invoices per year. 

Do you have any more questions? Ask in the comment section and I’ll be happy to answer.