The QuickBooks Guide to Converting QuickBooks Desktop to QuickBooks Online is for anyone converting from QuickBooks Desktop (Pro or Premier) to QuickBooks Online. The full guide can be downloaded from the link above.
Sign up and sign in to QuickBooks Online and create a company
Start by signing up for QuickBooks Online. If you’re a long-time QuickBooks Desktop user, we recommend converting to QuickBooks Online Plus since it has many of the same features, such as inventory tracking. Simple Start and Essentials do not have these capabilities (learn more about each version).
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When you’re ready, sign in to QuickBooks Online and create a new company file. Once you complete the welcome workflow and enter your basic company information, do not enter any more data. For now, all we need to do is create the new file.
Let’s head back into QuickBooks Desktop to prepare your data. The conversion process itself is all done from QuickBooks Desktop, which means there’s nothing to do in QuickBooks Online until the conversion is complete.
Before you start
You must be running QuickBooks Desktop 2016 or newer to convert your file into QuickBooks Online.
If you are using a version from 2015 or earlier, you’ll first need to download the latest (free) trial version of QuickBooks Desktop and update your existing file to the newest format.
Don’t know which version you have? Press F2 while you’re logged in to bring up the Product Information screen. Your product name and version will be displayed at the top.
Update QuickBooks Desktop
Before you start the conversion, make sure your current Desktop software is up-to-date.
Sign in to QuickBooks Desktop as the administrator, click the Help Menu and select Update QuickBooks Desktop from the drop-down. Then, click Update Now on the next screen. Once the update process is complete, close and reopen QuickBooks Desktop.
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Finish Payroll and Tax Payments in Desktop
If you need to run payroll or make tax payments in QuickBooks Desktop, finish these and other outstanding tasks before converting. This can take time so plan accordingly based on your past experience.
There are a few additional house-keeping payroll tasks that will help the conversion go smoothly. In your payroll menu, mark any employes that are no longer working for you as inactive. If they’re left active, QuickBooks Online will require you to fill in their employee data.
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Now is also a good time to fill out complete data for your current employees. While not required in QuickBooks Desktop, information like gender, birthdays, W-4 withholdings, pay frequency, and home address are required to run payroll in QuickBooks Online.
Now that you’re finished with upkeep, let’s create a backup of your company file. This backup creates a unique save point you can use to restore your current QuickBooks Desktop experience or start the conversion over.
Start by switching QuickBooks Desktop to single-user mode (File > Switch to Single-user Mode). If the option reads as “Switch to Multi-User Mode,” your system is already in single-user mode. Next, go up to File, select Backup Company, and then Create Local Backup. If you click “Backup Options,” you can specify the file location.
Follow the prompts and click Save it now to complete the process. You won’t need to backup your company files after converting to QuickBooks Online since they’re always saved for you in “the cloud.”
Print a Standard Balance Sheet and Profit & Loss Report
After converting your file, you’ll need to check a few data points to ensure everything exported successfully. Go to your Reports Center in the Reports Menu and print standard versions of your Profit & Loss Report, Balance Sheet, and Payroll Details Report.
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In the Reports Center, scroll until you find “Balance Sheet Standard.” Click the “Run” arrow underneath the preview window to generate the report. On the report page, select All for the Dates and Accrual for the Report Basis, then click “Refresh.” Repeat these steps for the Profit & Loss Report. Apply the following filters to these two reports:
Before leaving the Reports Center, print out your Payroll Details Report (filtered for “All” dates). You’ll use this report to enter your historical payroll data during the Payroll Set Up Workflow, if you plan to import Payroll data.
Start the conversion from QuickBooks Desktop
You’ve updated your QuickBooks Desktop software, backed-up your file, and finished all outstanding payroll and tax payment tasks - you’re ready to convert your file to QuickBooks Online!
Open the company file you want to convert in QuickBooks Desktop. Then, go to the Company Menu and select Export Company file to QuickBooks Online. A pop-up window will ask you to log in to QuickBooks Online.
Are you Importing Inventory?
If you’re importing inventory from version 2016 or later, you’ll see the screen below. Enter the first day following your company’s last tax filing period for the “as of” date. Since QuickBooks Online will recalculate your inventory costs using FIFO and your designated “as of” date, it’s best to use the first day following your company’s last tax filing period so you avoid the need to file amended tax forms. This date is also important for maintaining accurate quantity-on-hand totals.
Since many QuickBooks Desktop users have existing inventory data, we highly recommend converting to QuickBooks Online Plus. Upgrading your subscription before you convert will make the process much smoother.
Some users prefer not importing their existing inventory and starting with a clean slate. If you have lots of inactive items or ones that will require significant reworking, consider rebuilding your inventory in QuickBooks Online.
On the next screen, select the QuickBooks Online company you created earlier. Unless you skipped this step and have not yet created a new company, do not create one here - doing so will generate an additional subscription.
The conversion process has officially begun!
The actual time required to convert your file depends on its size. Feel free to step away and let the program run automatically. If you encounter a “slow scripting error” message, select “no” - choosing “yes” halts the conversion.
Once the conversion is complete, you will receive an email confirmation.
Success, your QuickBooks Desktop data has been successfully converted into QuickBooks Online.