QuickBooks Online comes in different versions. The plans currently available are Simple Start, Essentials, Plus, and Advanced. It is important to choose the right one for your business, and to not miss out on very important features.

While they all track income and expenses and have reports you can run, there are limitations to reporting in the Simple Start and Essentials versions. For accuracy in bookkeeping, I always want to drill down on the total expenses in the Profit & Loss report. Then, I want to be able to Group by Name.

Why is this important? For one, it shows you each vendor and list of transactions for each one so that you can verify that the categorization of checks and expenses is consistent, as applicable. It also shows you transactions at the bottom that don’t have a payee (vendor). All transactions should have a name, even if it a generic one. For example, I like to have a vendor Restaurants so that I can categorize all charges to many different restaurants without cluttering up the vendor list, especially for one-off places that won’t be visited again.

This report grouping makes it so much easier to verify directly from the financial statements instead of going through each vendor to look at the transactions. And this feature is only available in the Plus and Advanced versions, which is why I never set up my clients in the Essentials plan, and never with Simple Start.