5 QuickBooks Myths - The Real Story

1. MYTH - I have to upgrade our QuickBooks every year.

REALITY: While the QuickBooks marketing done each fall when the new versions are released may lead you to think you have to upgrade, that is simply not true. You can continue using your existing version of QuickBooks as long as you like, except for...

2. MYTH - I have to upgrade our QuickBooks every three years.

REALITY: IF you are using any of the QuickBooks-based products such as payroll, credit card processing, or online banking, it IS true you have to upgrade at least once every three years.

This phenomenon is known as the "QuickBooks Sunset Policy", where at the end of a products' life cycle (every three years), QuickBooks stops supporting that version and you are then no longer able to access the other QuickBooks-based products such as payroll, etc. However, the QuickBooks software keeps working after this three year window, but not being able to use the other services can be nothing short of a pain and force an upgrade.

IF you are NOT using any of these QuickBooks services, it is NOT necessary to upgrade your QuickBooks software every three years. Keep in mind though, that you will be missing out on the new features and functionality that is built into the new versions if you don't upgrade.

UPGRADE RULE OF THUMB I SHARE WITH MY CLIENTS: Plan on upgrading at least once every three years. It keeps your business using a supported version of QuickBooks. In addition, it allows you to take advantage of the improvements they make within the software during that time.

3. MYTH - I will lose my QuickBooks data when I upgrade to a new version

REALITY: This is simply not true. In fact, QuickBooks makes it exceptionally easy to upgrade your data to a new version. Your data should transfer quite easily to a new version of QuickBooks, under the assumption that you have been giving it the proper care and attention it deserves - see related post on "Why It Is Critical to Verify Your QuickBooks Data".

4. MYTH - QuickBooks payroll is included with the purchase of QuickBooks software

REALITY: It is necessary to purchase a separate, twelve month subscription in order for you to process your payroll within QuickBooks if you choose to have QuickBooks process it (see Myth #5 below). For example, the Enhanced Payroll service from QuickBooks. Unless you plan on looking up the deductions for each employee manually out of the printed tax federal, state and local tax tables for each payroll, you will need to get a payroll subscription. This payroll subscription runs on its' own twelve month schedule, and is completely independent of any QuickBooks software updates as mentioned above.

5. MYTH - I have to use QuickBooks to process my payroll

REALITY: Not true. You are free to use any payroll service you like to process your payroll. Other companies such as PayCycle (which was recently acquired by Intuit), Paychex and others can definitely process your payroll.

Many businesses use journal entries to get their payroll data into QuickBooks from these outside payroll services. Even better, some of them like PayCycle have integration tools that permit the electronic linkage of their payroll data to your QuickBooks file.