When choosing an accounting solution for your business, one of the most common questions is whether to go with QuickBooks Self-Employed or QuickBooks Online Simple Start. Both of these products are offered by Intuit, yet they are designed to serve very different business needs. In this post, we will explore the key differences between QuickBooks Self-Employed and QuickBooks Simple Start, looking at their features, pricing, intended users, and overall functionality. By the end of this guide, you should have a much clearer understanding of which option may be best for your unique situation.

Introduction

For many freelancers, independent contractors, and sole proprietors, keeping track of income and expenses manually can be overwhelming. On the other hand, small business owners with more complex financial operations require robust tools that can handle double-entry accounting, payroll, invoicing, and reporting. Intuit offers two distinct products to meet these needs:

• QuickBooks Self-Employed is a streamlined accounting tool built specifically for freelancers, gig workers, sole proprietors, and independent contractors. Its primary focus is on simplifying tracking of income, expenses, mileage, and quarterly tax estimates, helping you to separate your business transactions from your personal finances.
• QuickBooks Online Simple Start is aimed at small business owners who need a reliable, double-entry accounting system. This solution offers additional features beyond basic income and expense tracking, including inventory management, comprehensive reporting, and the ability to support multiple users as your business grows.

In the following sections, we’ll dive into the details of each product, examine their pros and cons, and compare functionalities so that you can decide which fits your business model better.

What Is QuickBooks Self-Employed?

QuickBooks Self-Employed is a cloud-based accounting solution tailored to individuals who work for themselves. It has several benefits that make managing your finances simpler:

• Designed for Simplicity: The interface is straightforward and user-friendly, making it easy to record daily transactions without feeling overwhelmed by complex accounting jargon.
• Expense and Income Tracking: Quickly capture your business income and expenses. Whether it’s a payment from a client or a small expense like office supplies, everything can be tracked in one place.
• Mileage Tracking: If you spend a lot of time on the road—for example, meeting with clients or delivering services—you can use its built-in mileage tracker. This feature automatically calculates your mileage deduction although it uses a simplified cost-per-mile method.
• Quarterly Tax Estimates: One of the standout features is that it helps you figure out the estimated quarterly tax payments you might owe, which is especially important for freelancers who do not have an employer withholding taxes on their behalf.
• TurboTax Integration: QuickBooks Self-Employed “plays nicely” with TurboTax, making it easier to transfer your data when it’s time to file your tax return.
• Basic Invoicing and Receipt Capture: While it does not have all the invoicing capabilities of more robust systems, it lets you create basic invoices and attach digital copies of receipts for expense verification.

Because QuickBooks Self-Employed is designed with simplicity in mind, it’s best suited to those whose financial transactions are straightforward and who do not require the advanced features that come with full double-entry accounting. In essence, it’s ideal if you are a freelancer or a sole proprietor who needs to manage personal versus business expenses and focus on tax readiness.

What Is QuickBooks Simple Start?

QuickBooks Online Simple Start is the entry-level offering in Intuit’s online accounting suite designed for small businesses. It comes with more robust features than QuickBooks Self-Employed and is built around double-entry accounting. Here’s what you can expect from Simple Start:

• Double-Entry Accounting: Unlike QuickBooks Self-Employed that follows a simpler single-entry approach, Simple Start uses a full double-entry accounting system. This design allows for more accurate financial reporting, including the generation of balance sheets and profit and loss statements.
• Invoicing and Payment Processing: Simple Start offers customizable invoicing, and you can send invoices out to customers. With the ability to integrate with payment processing systems, you can also accept partial or full payments on invoices.
• Expense and Bill Management: In addition to tracking expenses, you can also manage bills. This includes entering vendor bills and paying them online.
• Bank Feeds and Reconciliation: You can connect your bank and credit card accounts with the system. This streamlines the process of importing transactions and reconciling accounts, which helps to quickly identify any discrepancies.
• Basic Reporting and Dashboard: The software provides more than 20 customizable reports, giving you insights into your cash flow, expenses, and overall business health.
• Scalability: Although Simple Start has some limitations compared to higher-tier QuickBooks Online products (such as Essentials, Plus, and Advanced), it is designed to grow with small businesses that may eventually expand their team or operations.

QuickBooks Online Simple Start is a well-rounded solution for small business owners who have employees, vendors, and more complex accounting needs. It’s a system that helps not only with daily bookkeeping but also with a better understanding of your business’s financial status through detailed reporting and analytics.

Key Differences Between QuickBooks Self-Employed and Simple Start

Below are some of the key areas where these two products differ:

Target Audience

• QuickBooks Self-Employed:
  • Best for freelancers, contractors, and sole proprietors.
  • Ideal for those with a single source of income not involving complex inventories, multiple users, or detailed vendor management.
  • Emphasizes tax preparation for individuals and integrates with TurboTax for seamless tax filing.
• QuickBooks Online Simple Start:
  • Geared toward small business owners who need to manage their finances holistically.
  • Suitable for businesses with employees, vendors, and more diverse sources of income and expenses.
  • Provides capabilities like double-entry accounting, which is essential for generating comprehensive financial statements.

Core Features

• Income and Expense Tracking:
  • Both systems allow you to record business transactions; however, QuickBooks Self-Employed focuses on simplicity and quick entry, while Simple Start provides more detailed categorization and reporting options.
• Invoicing:
  • QuickBooks Self-Employed offers basic invoicing designed for simple needs.
  • Simple Start offers more robust invoicing tools, including recurring invoices and customization options that are beneficial for a growing business.
• Tax Management:
  • QuickBooks Self-Employed includes tools for calculating quarterly tax estimates and tracking tax deductions automatically.
  • Simple Start manages business taxes as part of a more comprehensive accounting system and supports 1099 contractor payments, bill payments, and other payroll functions as an add-on.
• Mileage Tracking:
  • A standout feature in QuickBooks Self-Employed, especially for those who use their vehicle extensively for business.
  • Although Simple Start does not have as prominent a mileage tracking feature, you can still record transportation expenses manually.
• User Access and Collaboration:
  • QuickBooks Self-Employed is limited to a single user, making it perfect for solo operators.
  • Simple Start allows additional accountant access and can support multiple users, which is ideal as your business grows.

Accounting Methodology

• Single-Entry vs. Double-Entry:
  • QuickBooks Self-Employed generally follows a simpler bookkeeping model (single-entry) that is sufficient for freelancers.
  • Simple Start employs a full double-entry accounting method that gives you more accurate financial representations and a complete picture through traditional reports like balance sheets, income statements, and cash flow reports.

Pricing Considerations

The pricing for the two products also reflects their differing levels of functionality and target user:

• QuickBooks Self-Employed:
  • Typically priced lower than the online small business products, making it an attractive option for individuals with basic tracking and tax needs.
  • Often comes bundled with tax benefits and lower monthly fees that focus on the essentials for self-employed professionals.
• QuickBooks Online Simple Start:
  • While it may come at a slightly higher monthly fee than the Self-Employed version, the extra cost brings additional features like double-entry accounting, more detailed reporting, and multi-user access.
  • Affordable for growing small businesses that require a deeper degree of financial management tools.

Integration Capabilities

• QuickBooks Self-Employed:
  • Integrates easily with TurboTax, ensuring that your tax data transfers seamlessly.
  • Limited integrations with third-party apps for areas like payroll or ecommerce.
• QuickBooks Online Simple Start:
  • Supports integration with a wide range of third-party applications—from payroll services and ecommerce platforms (such as Shopify and BigCommerce) to expense management and time tracking tools.
  • This makes Simple Start a more versatile solution if you plan to expand your business operations in the future.

Pros and Cons at a Glance

QuickBooks Self-Employed

Pros:

• Intuitive, user-friendly design perfect for freelancers.
• Automatic mileage tracking and quick expense capture.
• Tailored quarterly tax estimate calculations.
• Affordable pricing for individuals with relatively simple financial needs.
• Seamless integration with TurboTax for tax filing.

Cons:

• Lacks the in-depth reporting and customization offered by double-entry systems.
• Not suitable for businesses with employees or multiple revenue streams.
• Limited invoicing functions compared to more robust systems.
• Fewer integrations with external apps beyond basic tax-related tools.

QuickBooks Online Simple Start

Pros:

• Full double-entry accounting provides detailed and accurate financial reports.
• Ability to manage invoices, bills, and payments with greater flexibility.
• Supports bank feeds, reconciliation, and a comprehensive dashboard.
• More scalable for small businesses planning to expand.
• Integration with various third-party applications enhances its versatility.

Cons:

• Slightly higher pricing may be a factor for very small or starting businesses.
• The learning curve can be steeper for users without an accounting background.
• Some features may be more than necessary for individuals who only require minimal financial tracking.

A Few Scenarios to Consider

Let’s take a look at a couple of scenarios that might help you decide:

Scenario 1: Freelancer or Sole Proprietor

Imagine you are a freelance graphic designer working independently. Your income predominantly comes from one-on-one client projects, your expenses are limited to software subscriptions, travel, mileage, and small office supplies, and you want to ensure that you maximize your quarterly tax deductions. In this case, QuickBooks Self-Employed is likely a perfect match because of its simple interface, automatic mileage tracking, and focus on tax estimate management. The streamlined design means you won’t have to wade through extraneous features that you will never use.

Scenario 2: Small Business Owner

Consider another situation where you own a small retail store with a handful of employees, multiple vendors, and regular invoicing needs. You require detailed financial reports for management purposes, want to keep track of both assets and liabilities, and need to reconcile numerous bank accounts on a regular basis. Here, QuickBooks Online Simple Start offers the robust double-entry accounting system and the comprehensive set of features necessary to manage more complex finances. The ability to integrate with payroll and time tracking apps further supports growing business needs.

How to Get Started

For QuickBooks Self-Employed

1. Sign Up for a Free Trial:
   QuickBooks Self-Employed typically offers a 30-day free trial period. Sign up for the trial to explore its features and see if it adequately matches your needs.
2. Set Up Your Account:
   The registration process will guide you through the initial setup. Input your basic business information, such as your name, business type, and tax details.
3. Connect Your Bank Accounts:
   Linking your bank and credit card accounts will allow transactions to import automatically. This will save you time and help keep your financial data current.
4. Start Tracking Transactions:
   Once your accounts are connected, begin categorizing your expenses and income. Use the mileage tracker to record business trips automatically.
5. Use TurboTax Integration:
   At the end of the year, your data can be easily transferred to TurboTax for a smoother filing experience.

For QuickBooks Online Simple Start

1. Initiate a Free Trial:
   QuickBooks Online also offers a free trial (usually 30 days) so that you can test its more robust features before committing to a subscription.
2. Set Up Your Company File:
   During the setup process, enter crucial details about your business including company name, fiscal year settings, and chart of accounts. This will set the foundation for a double-entry system.
3. Connect Multiple Accounts:
   Add your bank, credit card, and any other financial accounts so that transactions will import automatically. This helps keep your records accurate and up-to-date.
4. Customize Your Invoicing and Billing:
   Utilize the customization options to create professional invoices that reflect your brand. Set up recurring invoices if you have repetitive billing needs.
5. Explore the Reporting Features:
   Dive into the reporting section to generate profit and loss statements, balance sheets, and cash flow reports. These insights will help you make more informed business decisions.
6. Invite Collaborators:
   If you work with an accountant or a team, you can simplify the process by inviting them onto your account with designated access levels.

Frequently Asked Questions (FAQs)

Q: Can I switch from one product to another?
A: While switching between QuickBooks Self-Employed and QuickBooks Online isn’t as straightforward since they are built for different purposes, it is possible to start a new subscription. However, data migration may require additional steps or professional assistance.

Q: What happens to my tax records if I upgrade?
A: QuickBooks Self-Employed focuses primarily on annual tax estimation and simplified reporting, while QuickBooks Online Simple Start keeps detailed double-entry records. If your business grows and you require more rigorous accounting, consider upgrading before the busy tax season.

Q: Which product is better if my business is growing?
A: If you plan to expand your business, hire employees, or add more complex financial operations (like multiple bank accounts or vendor management), QuickBooks Online Simple Start is generally the better choice due to its scalability and comprehensive reporting tools.

Q: Do both products integrate with TurboTax?
A: Yes, both integrate with TurboTax. QuickBooks Self-Employed offers a very direct integration specifically designed for self-employed individuals. While QuickBooks Online Simple Start also integrates with TurboTax, it provides a greater range of features for a more complex business structure.

Q: How steep is the learning curve for each product?
A: QuickBooks Self-Employed is known for its simplicity and ease of setup—most freelancers can get started quickly with minimal training. QuickBooks Online Simple Start, with its more robust feature set, may require a bit more time to master, especially if you are new to double-entry accounting.

Final Thoughts

Deciding between QuickBooks Self-Employed and QuickBooks Online Simple Start largely depends on your business structure and your accounting needs. If you’re a freelancer or a single-person operation, QuickBooks Self-Employed offers a simple, efficient tool to keep your finances in order at a lower cost. Its focus on basic income and expense tracking, mileage calculations, and tax estimates can be all you need for a straightforward tax filing process.

On the other hand, if you run a small business with employees, vendors, and multiple revenue streams, QuickBooks Online Simple Start provides a more comprehensive accounting solution. With its double-entry accounting system, robust reporting, and capability to integrate with third-party applications, it is a powerful tool designed to support the growth of your business.

Both products come with a free trial period, so you have the opportunity to test drive each solution before committing long term. Take the time to evaluate which one aligns best with your operational needs, financial complexity, and long-term business goals.

Tips for a Smooth Transition

1. Assess Your Current Needs:
   Before deciding, make an inventory of your current accounting challenges. Do you need a system to track mileage and quarterly taxes, or do you require more detailed financial reports and double-entry bookkeeping?
2. Consider Future Growth:
   Even if you are comfortable with a simple system today, think about your future. If you plan on expanding your business, opting for QuickBooks Online Simple Start—even if it means a slightly higher expense—may save you from having to migrate later.
3. Test the Free Trials:
   Both products offer free trial periods. Use this opportunity to familiarize yourself with the interface, features, and daily operations. Compare how each product integrates with your bank, how easy it is to track expenses, and whether the reporting meets your needs.
4. Consult an Accountant:
   If you’re uncertain, it’s always a good idea to speak with a knowledgeable accountant. They can provide insights into not only which product fits your current needs but also which system will support your long-term financial strategy.
5. Leverage Online Resources:
   Intuit offers a range of support materials, including step-by-step guides and video tutorials. Use these resources to get up to speed faster and to troubleshoot any issues you encounter during setup.

Conclusion

In summary, the choice between QuickBooks Self-Employed and QuickBooks Online Simple Start is largely determined by your business’s size and complexity. QuickBooks Self-Employed excels as a straightforward tool for freelancers and solopreneurs who need to keep personal and business transactions separate while staying on top of tax requirements. Its user-friendly design and targeted features focus on what a self-employed individual truly needs.

Conversely, QuickBooks Online Simple Start is the right option for small businesses that require a more robust accounting system. With its double-entry accounting, enhanced invoicing, bill management, and detailed reporting features, Simple Start is built to support business growth. Though it may come at a slightly higher cost and require a little more accounting knowledge, its scalability and comprehensive features make it a valuable investment for any growing business.

By carefully evaluating your business requirements, anticipated growth, and the range of features you need, you can make an informed decision between these two QuickBooks offerings. Remember, both products allow you the flexibility to try before you buy—so take full advantage of the free trials and let your everyday business operations guide your choice.

No matter which product you choose, both QuickBooks Self-Employed and QuickBooks Online Simple Start provide the tools necessary to streamline your financial management and ultimately help your business thrive. Happy accounting!