Difference Between QuickBooks Local and QuickBooks Hosted
Originally posted Feb 2018. Revised 8/24/2020.
I get asked this a lot, so I thought I’d dive in a bit to explain. My husband is a Cloud Architect, and loves to point towards the sky and say, “To the Cloud!” Always makes me laugh (he’s a cutie), but if you don’t know what the cloud is (other than the puffy things in the sky), it can be confusing.
Generally speaking, cloud-based software is software hosted by a data center and accessible by internet connection (IE over the internet). With QuickBooks Software Enterprise, clients use an RDP (remote desktop) client in order to access a virtual computer, where they will use their software. You do need a good internet connection to use cloud-software. Does not need to be super-powered, but needs to be basically stable.
Locally-based software is installed on your local computer. If you are happy managing your hardware, make sure you are making consistent backups, and maintain your hardware integrity, you should be ok. If your last data file backup was sometime in 2017, you are not ok. You are at risk for data loss. Additionally, backing up your file to your local computer is redundant. You need to backup to an external hard drive, and preferably more than one (or use Intuit’s backup service). If you have multiple users, you have the increased responsibility of making sure that your local network can handle the connection between your users and the server or hosting computer.
In 2015, 20% of my sales were locally based. As of 2020, I’d say the number is flipped. Hosted Enterprise is much more common and preferred than local, for the reasons below. Your primary responsibilities with Enterprise Hosted are installing the RDP client (which they will help with if needed), and making sure your hardware matches minimum specifications (minimum specs for QuickBooks Software Enterprise Hosting Partner are listed at the end of this post).
Why Cloud?
Minimum data management for you – multiple backups at multiple sites, managed by professionals trained in data security and management.
Lower minimum specifications for your office computers.
It is safer than locally-based software, since your data is secured and protected by professionals.
More scalable as your business grows. You can add seats as needed.
No network connection issues with a multi-user network.
No hardware purchases on your end to upgrade servers and computers as software changes.
No IT bills to fix your network, servers, or figure out why you cannot connect.
Note: In the age of Covid this is even more important. Workers are flocking to cloud-based solutions, and it is critical that we support their work from home efforts. For current technical requirements and more information, check out our QuickBooks Enterprise Desktop page here.
