Choosing the Right Version of QuickBooks for Multiple Companies

Managing finances in QuickBooks for multiple companies can quickly become overwhelming without the right tools in place. Choosing between QuickBooks Online and QuickBooks Enterprise can be the difference between smooth, organized accounting and a tangled mess of transactions and reports. 

So, where do you start? Are you safe with QuickBooks Online, or do you need to upgrade to QuickBooks Enterprise? 

Let’s break it down and find out what works best for you.

QuickBooks Online: Best for Small, Simple Setups

QuickBooks Online is a solid choice if you’re running small businesses with relatively straightforward accounting needs. 

What QuickBooks Online Offers:

• Separate Subscription for Each Business: Every entity you manage will have its own account, which means distinct financial data, separate tax filings, and clear boundaries.
• Ease of Use: QuickBooks Online is cloud-based, so you can access your accounts from anywhere, making it convenient for business owners on the go.
• Reporting in QuickBooks Online: QuickBooks Online provides basic financial reports, such as Profit and Loss Statements, Balance Sheets, and Cash Flow Statements for each business. However, if you’re managing multiple businesses, it lacks the ability to consolidate reports across entities.

Who Should Use QuickBooks Online?

1. Smaller businesses with simple operations: If you own a small boutique and an online store, each business can be set up separately in QuickBooks Online. Since your transactions are straightforward—handling inventory, sales, and basic expenses—you don’t need complex features like multi-entity consolidation or inter-company tracking.
2. Businesses that don’t require consolidated reporting across multiple entities: For example, if you run a photography business and a consulting firm, they likely operate independently with no need to share financial data between them. You’d be fine generating individual reports for each business to monitor performance, as QuickBooks Online offers separate reports like Profit and Loss and Balance Sheets for each company. 
3. Entrepreneurs managing only a couple of businesses with basic accounting needs: If you’re an independent contractor who also owns a side business like a coffee shop, QuickBooks Online can keep your finances organized without overwhelming you with features you don’t need. Both businesses have straightforward expenses, income, and tax filings, making QuickBooks Online an affordable and easy-to-manage solution. 

Related Reading: 5 QuickBooks Operational Reports to Boost Profitability

   

QuickBooks Enterprise: Built for Larger, Complex Operations

QuickBooks Enterprise is designed for multi-entity or multi-location businesses with more complex needs. Unlike QuickBooks Online, Enterprise allows you to manage multiple businesses or entities under one system without needing separate subscriptions. 

What QuickBooks Enterprise Offers:

• Multi-Entity Management: Manage multiple businesses or entities within one system. You can create separate financials for each business but still manage them centrally.
• Consolidated Reporting: Generate detailed reports that consolidate financial data across your entities—essential for business owners who want a high-level view of their overall operations.
• Inter-company Transactions: Seamlessly track transactions between your different businesses without duplication or errors.
• Advanced Customization: Enterprise offers customizable fields, advanced inventory management, and industry-specific features that scale with your business.

Who Should Use QuickBooks Enterprise?

1. Businesses with multiple entities or locations that require consolidated reports: If you own a real estate company with several property management entities, or operate a chain of restaurants across multiple locations, QuickBooks Enterprise allows you to manage each entity or location separately, while also generating consolidated financial reports.
2. Companies with complex transactions, such as inter-company transfers or shared resources between businesses: If you run a manufacturing company with separate legal entities for production and distribution, you may regularly transfer inventory or funds between these entities. QuickBooks Enterprise simplifies tracking inter-company transactions, allowing you to record the movement of resources—like materials or funds—without duplication or errors.
3. Growing businesses that need scalability and the ability to handle high transaction volumes: If your business is rapidly expanding—say, you operate an e-commerce company that’s adding new locations or acquiring other businesses—QuickBooks Enterprise is designed to scale with you. 

It can handle high transaction volumes, detailed inventory management, and large teams of users. This is especially helpful for businesses like wholesale distributors or large retail chains, where tracking thousands of daily transactions, inventory changes, and financial data across multiple locations is critical.

Related Reading: QuickBooks for Contractors: 6 Advantages of Choosing Enterprise

Common Challenges When Managing Multiple Businesses in QuickBooks

When you’re managing multiple businesses through QuickBooks, we often see two major challenges that businesses consistently struggle with: accurately handling inter-company transactions and ensuring data accuracy across entities.

Managing Inter-company Transactions

If you’ve ever had to move inventory between your businesses or transfer funds from one entity to another, you know how challenging inter-company transactions can be. Without the right tools, it’s easy to make mistakes or accidentally record transactions twice.

• QuickBooks Online: While it’s great for managing separate accounts, QuickBooks Online requires you to manually track inter-company transactions. This can get complicated fast—especially if you’re handling large amounts of inventory or funds between businesses. The risk of duplicate entries or errors increases, which means more time spent double-checking your books.
• QuickBooks Enterprise: This is where QuickBooks Enterprise shines. QuickBooks Enterprise makes it much easier to manage these transactions with built-in multi-entity features. You can seamlessly record transactions between your businesses without worrying about duplication or manual data entry. 

MISSION’s Tip: To avoid errors and duplication when transferring inventory or funds between businesses, it’s crucial to set up clearly defined accounts for each entity and use proper tracking methods.

For QuickBooks Enterprise Users: You can use the “Class” feature to track inter-company transactions. For example, if you’re transferring inventory between locations, assign a class to each transaction so you can easily trace its origin and destination. 

For QuickBooks Online Users: While manual tracking is necessary, create a workflow where every inter-company transaction is reviewed by a second team member before being finalized to reduce errors.

Related Reading: How QuickBooks Setup Services Ensures Profitability

Ensuring Data Accuracy Across Your Businesses

Keeping your financial data accurate is critical—especially when you’re juggling multiple businesses. If you don’t catch these errors early, they can cause major issues down the road.

• QuickBooks Online: Managing multiple businesses with QuickBooks Online means working with multiple accounts, which opens up more chances for data duplication or incorrect entries. For example, if you mistakenly enter an expense for both businesses, it could throw off your books, leaving you with inaccurate data.
• QuickBooks Enterprise: QuickBooks Enterprise helps keep your data consistent and accurate by managing all your entities under one system. You can switch between businesses easily, without worrying about duplicate entries or losing track of data. Enterprise also has built-in checks to help maintain data integrity.

MISSION’s Tip: The best way to ensure accuracy is to reconcile your accounts regularly—at least once a month. In QuickBooks, take advantage of automation where possible to reduce human error.

Set up bank feeds in both QuickBooks Online and Enterprise to automatically import your transactions. This reduces the risk of manually entering incorrect data. In QuickBooks Enterprise, use the audit trail feature to track any changes made to your financial data across multiple entities, so you can easily identify and correct discrepancies.

Related Reading: Modernize Your Business with QuickBooks Inventory Tracking

Why Proper Setup and Expert Guidance Make All the Difference

If you’re running multiple businesses, QuickBooks can be a game-changer, simplifying your accounting and helping you avoid costly mistakes. But from what we’ve seen with some of our most successful clients, small mistakes add up fast. An overlooked transaction here or inconsistent data entry there can snowball into bigger issues that are difficult—and expensive—to fix later.

The truth is, even with the best software, accounting for multiple businesses can get complex. That’s why having consistent help from experts is crucial. Without it, you risk spending more time untangling errors than actually managing and growing your businesses.

At MISSION Accounting, we’ve helped countless businesses just like yours streamline their accounting processes using QuickBooks. Don’t let accounting headaches slow you down—reach out today for a free consultation, and let’s get your QuickBooks working for you, not against you!