Converting QuickBooks Desktop to QuickBooks Online

LAST UPDATED: 07/28/23 LLATTA

This document is based on a QuickBooks webinar from 05/03/23; the webinar and slide deck can be found in the Teams
Channel: QBO Knowledge Base under Files > QBD to QBO conversion

Please use this document (QBO subscription levels) to determine which subscription level best suits the client. Most KZ
clients are on Plus—which is the minimum level for inventory, class tracking, and Purchase Orders—but not all clients
have this need. Additional subscription level details on page 17 of the Slidedeck – Converting to QBO from QBDesktop
PDF file.

Numbers referenced here (ex. 00:10:52) are timestamp on webinar + slides are from webinar PDF deck.

QBD Pro/Premiere/Enterprise have conversion tool built into software.

If you have any troubles, reach out to the dedicated Intuit Assisted Migration team: (844) 391-9890

You *can* redo a conversion (Company > Export your company to QBO, choose same QBO company, Upload; data will
be overwritten completely up to 180 days).

Company data (up to 60 days) can be purged from QBO completely, if there were errors in the conversion (for example,
payroll was turned on in QBDesktop prior to conversion triggering QBO Payroll, which cannot be overwritten by re-
exporting the company). Special note for purging: you MUST be logged into the company file as a regular user on the file
(set up a new user with a temporary gmail account and execute this process) and not logged into the QBOA (QBO
accountant) portal as you can inadvertently purge the wrong company. (1:00:08 - slides 64-66).

PART 1 of the Webinar: Converting to QBO using the conversion tool

(00:10:52) Lesson 1: Overview of the QuickBooks Desktop conversion tool
(00:28:40) Lesson 2: Pre-conversion activities
(00:48:08) Lesson 3: Carrying out a conversion
(01:10:10) Lesson 4: Validating the integrity of a QuickBooks Online company
(01:22:08) Lesson 5: Configuring a QuickBooks Online file
(01:35:51) Lesson 6: Converting a QuickBooks Desktop file with sales tax
(02:02:00) Lesson 7: Converting a QuickBooks Desktop file with Inventory or Payroll enabled

PART 2 of the Webinar: Migrating data to QBO without using the conversion tool
(02:03:22) Lesson 1: Exporting lists from QuickBooks Desktop
Lesson 2: Importing lists exported from QuickBooks Desktop into QuickBooks Online
Lesson 3: Entering beginning balances in a new QuickBooks Online company
 Converting QuickBooks Desktop to QuickBooks Online
LAST UPDATED: 07/28/23 LLATTA

CONSIDER STARTING FROM SCRATCH WHEN:

 File is corrupt
 Messy file/a lot of “garbage”
 Errors w bank + credit card reconciliations
 Considerable number of unbilled time/expenses that won't ever be pulled onto an invoice

WHAT DOESN'T CONVERT WHAT YOU CAN DO

Custom sales form templates for estimates, Use the default template in QBO, create a new one, or
invoices, sales receipts import a style created in Word
The bank connection + downloaded activity for Manually connect bank + ccs in QBO
review, linked to transactions
QBO users + permissions (however, if Manually set these up in QBO Plus or Essentials. If
converting to Advanced: review permissions w converting to QBO Advanced, review any permissions
client) after the conversion
Reconciliation reports Save each report you want from QBD in desktop as a
PDF
Memorized reports Recreate in QBO
QBDs audit trail Print the QBD's audit trail or retain the QBW data file
as an archive
The connection to your QB Payments merchant Disconnect/unlink the merchant service account from
service account QBD then manually connect/link it to QBO
BS budgets (although P&L budgets do convert) If your client needs to keep a BS budget, they need to
use a third-party app to track it
Closing date password + accumulated closing The closing date is converted to QBO but the closing
date exceptions date password + accumulated closing date aren't. QBO
begins to track new exceptions from the date of the
conversion.
 
 Converting QuickBooks Desktop to QuickBooks Online
LAST UPDATED: 07/28/23 LLATTA

To begin Converting to QBO using the conversion tool:

QBO tasks are in green + QBDesktop tasks are in orange

1. You will need a backup or portable file from the client (File > Create Copy > Backup copy), and the admin
password; save this file on your Citrix desktop.
 Let the client know they will need to disconnect their QBPayments account from QBDesktop (if this
merchant account is in use) and turn off any recurring charges in QBDesktop (Choose customer >
CC Processing Activities > Automatic Credit Billing > Suspend – click “suspend” for each recurring
charge) they will reconnect when QBO conversion has completed. This step ensures they do not double
charge their customers when the merchant account is reconnected in QBO.
 Also be sure to let the client know that once they supply this backup file, all work moving forward
will need to be done in QBO once they will receive an invite to the new QBO account after
conversion is completed; the QBDesktop use is effectively discontinued once they have submitted
their file. Any work done in QBDesktop after they supply the backup will not be reflected in their new
QBO file and would need to be redone.
2. Create QBO subscription or use an available shell in the KZ login + inform billing@kaizencpas.com that
subscription was created, or shell was claimed with client details
3. In Citrix, open/restore the provided backup file (File > Open or Restore Company > Restore a backup copy) and
save this file to your Citrix desktop.
4. Update to latest maintenance release. **You must be logged in QBDesktop as admin user, cannot complete this as
an accountant user*** (slide 20-23)
 Help > "Update QuickBooks Desktop"
 Select the “Update Now” tab > click Update Now button > Click “Get Updates” button
**If you have an unsupported version (QBDesktop 2020 or prior, account has been cancelled, subscription
expired), use the file restoration tool.
5. On your keyboard, hit the F2 button and check the number of transaction targets (36:00 - slide 28) targets and
verify that total is under 750,000. If you have more, you will either need to condense the QBDesktop file -or-
use the Condense Data Utility Tool (built into QBDesktop under File; this will remove transactions, it will retain
year-to-year data but will replace all transactions with a JE for each period and that detail will need to be
discussed with client to set their expectations).
6. Under this same F2 screen, check DB File Fragments details (00:37:15 - slide 30 + 31) for a large sum here; you
can create a portable file and restore it to reduce this number (create portable file, close current company, rename
current company file, restore portable file with original company name).
7. Verify the integrity of the QBDesktop data to check for errors and repair the file: File > Utilities > Verify Data
(00:38:18). Follow screen prompts.
 If File > Rebuild Data tool does not work, go to Help > Tool Hub Fix Setup and File Issues (00:40:19 -
slide 39)
8. Re-sort lists / Lists of Names (00:41:10 - slide 40-42) by going to Banking > Write Checks > place cursor on
Payee field > press CTRL + L to bring up Name List. On top bar, click View > Re-sort List (if you receive a
prompt asking “are you sure you want to return the list to it’s original order,” click OK)
9. Review preferences to understand which features were turned on and what, if any, need/should be transferred over
to QBO by going to Edit > Preferences (00:42:13):
 Accounting: account numbers + class tracking
 Items & Inventory – if Inventory is turned off here, and there are inventory items on BS, any inventory
will be converted as non-inventory items.
 Converting QuickBooks Desktop to QuickBooks Online
LAST UPDATED: 07/28/23 LLATTA

 Payroll & Employees – make sure this is turned off, it will initiate QBPayroll in QBO if turned on
 Sales Tax
10. In Step 1, we requested the client to disconnect their merchant account and suspend any recurring charges within
QBDesktop. Check to see if this disconnection was completed: Company > Advanced Services Administration
Review.
11. Once all the above has been verified/resolved, create another Backup of company: File > Back Up Company >
Create Local Backup (slide 45)
12. Final checklist:
 You created a new company subscription in QBO
 You updated QBDesktop with the most recent maintenance release
o Step 4: Help > "Update QuickBooks Desktop"
 You copied the QBDesktop file to a local drive
 You checked the number of transaction targets and database file fragments
o Step 5 + 6: hit F2 and verify targets are under 750,000
 You verified the integrity of the QBDesktop data
o Step 7: File > Utilities > Verify Data.
 You re-sorted the lists
o Step 8: Banking > Write Checks > place cursor on Payee field > press CTRL + L to
bring up Name List. On top bar, click View > Re-sort List
 You reviewed and updated preferences
o Step 9: Edit > Preferences
 You backed up your QBDesktop data
o Step 11: File > Back Up Company > Create Local Backup
13. Carry out the conversion within QBDesktop (00:48:08 - slide 50-59)
 Export the company file from QBDesktop:
Company > Export Your Company File to QuickBooks Online
 Decide whether to convert inventory (NOTE: QBDesktop inventory valuation uses average cost and QBO
uses FIFO, or First-In-First-Out – you must bring this to manager’s attention in case they need to discuss
with client; generally, we select “Yes, track inventory using FIFO” and use 01/01/current year)
 Sign into QBO Accountant: “Yes sign me in.” You can use your QBO login for this step, if you use the
MFA login, you will need a verification code sent to Amy’s -0224 mobile)
 Choose where to move the QBDesktop file:
 On the “Make sure things look right” screen, double and triple check to ensure you have selected
proper client to avoid converting into the wrong company file
 Execute the conversion process
 You will receive an email when the conversion is complete.
14. Upon first login to QBO, you will see an information screen with details on conversion process (either a
complete success or a prompt that “A few things need to be reviewed”).
 Screenshot this page in QBO and download the XLS spreadsheet to the right by clicking the “Full
Migration Details” link
 Post both the screenshot (examples below) and the XLS migration detail file in Qount as an internal post.
 Converting QuickBooks Desktop to QuickBooks Online
LAST UPDATED: 07/28/23 LLATTA

Example of a seamless conversion Example of a conversion that needs a journal entry to

correct trial balances

15. Post-conversion items to check (01:10:10):

 Compare reports between QBDesktop and QBO, use accrual-basis (all dates)
 A/P Aging Summary
 A/R Aging Summary
 Sales Tax Liability
 Balance Sheet summary
 Profit & Loss
 Review the conversion report XLS file that you downloaded when conversion was complete : check all
four tabs on spreadsheet for discrepancies (sales tax is tracked differently in QBDesktop than it is in QBO
but verify all other details match)
 Review Accounts and Settings in QBO: Gear > Accounts and Settings
 Company tab: Name, EIN, email, phone
 Sales tab: review all details
 Billing & Subscriptions tab: if the QBDesktop file had QBPayments account connected, scroll to
bottom under QBO Payments and click the “Connect an existing QBOPayments account,” follow
prompts on screen.
 Advanced tab:
1. Check details and add book closing password (3956000) – conversion does not carry over
this detail.

2.
 Converting QuickBooks Desktop to QuickBooks Online
LAST UPDATED: 07/28/23 LLATTA

3.
 Review recurring (called “memorized” in QBDesktop) transactions:
 In QBDesktop: Lists > Memorized Transactions List (check settings, update in QBO if necessary)
 In QBO: Gear > Recurring Transactions + change any unscheduled transactions reminder to
scheduled, if necessary (1:19:40)
16. In QBO (Accounting > Reconcile) verify that beginning balances on accounts match QBDesktop details. Add a
reconciliation in QBO with matching data, using the last successful reconciliation date in QBDesktop ($0.00
difference, click “Finish now”) so that it has the correct beginning date moving forward. Repeat this step on all
accounts that will be reconciled.
 Converting QuickBooks Desktop to QuickBooks Online
LAST UPDATED: 07/28/23 LLATTA

17. Set up applicable KZ management report (compilation or prep, as stated in Engagement Agreement).
18. LYNDSEY: Invite the client as an admin user to their new QBO account and request client to connect bank feeds.
19. If client plans to set up additional user roles for their team members, initiate Primary Admin transfer from KZ
MFA login to client’s login so we are not taking up a paid seat (Gear > Manage Users).
 Client must have accepted the QBO invite in Step 17 for this transfer option to become available.
 Gear > Manage Users: click the three dots next to client’s login > Change primary admin
 Converting QuickBooks Desktop to QuickBooks Online
LAST UPDATED: 07/28/23 LLATTA

 This transfer step requires a verification code to be sent to Amy’s -0224 device to complete and the client
must accept the Primary Admin transfer to be able to remove KZ as Primary Admin. Client can then
remove KZ under Users tab to invite their team member(s).
 Note: This applies to the USERS tab only, KZ must always remain as ACCOUNTANT user

20. Differences between QBDesktop and QBO Sales tax to be aware of (01:39:00 – Slide 108)
 QuickBooks Desktop sales tax shows up on the items list
 QuickBooks Desktop sales tax items convert as custom rates
 QuickBooks Online sets up a sales tax liability account for each QuickBooks Desktop sales tax agency
 In QuickBooks Online, you can use either manual or automated (hybrid) sale tax
 QuickBooks Online sales tax agencies are not vendors; they are listed in Sales Tax Center

Note: KZ does not process sales tax through QBO Sales Tax center; no need to map sales tax settings in
QBO.

21. Check inventory balances in QBO (Reports > Standard > Business Overview > Balance Sheet > Date = FIFO
start date 01/01/currentYY) against inventory balances in QBDesktop (Reports > Company and Financial >
Balance Sheet Standard > Date = FIFO start date)
22. Inform manager or onboarding team lead that account has successfully been converted to QBO.
23. Great job, you’re done!!
 Converting QuickBooks Desktop to QuickBooks Online
LAST UPDATED: 07/28/23 LLATTA

To begin Migrating data to QBO without using the conversion tool (02:03:22 – Slide 148)
QBO tasks are in green + QBDesktop tasks are in orange
1. Set up a new QBO company
2. Import the lists from QBDesktop into QBO:
 Account Listing/Chart of Accounts
 Item Listing/Products and Services
 Customer Contact List
 Vendor Contact List
QBO requires data to be formatted in a particular way to allow import; download a sample XLS file and
configure QBDesktop lists to match this formatting for a successful import by following these steps:
Account Listing/Chart of Accounts Step 2a. In QBO, Gear > Import data > Chart of Accounts, download the
sample file (location is circled in screenshot below); this file will inform the proper formatting when you run the
report in QBDesktop:

Account Listing/Chart of Accounts step 2b. In QBDesktop, Reports > List > Accounting List and customize the
report to add/remove columns as required in the sample file you just downloaded from QBO; right click the
column to drag and drop into desired position; click Excel button > Create New Worksheet in a new workbook;
click Advanced button and turn off the box that says “include QB Export Guide worksheet with helpful advice”

The Account
Listing/Chart of
Accounts excel file
should read:
Account Number
Account Name
Type
Detail Type

If the account field

on this QBDesktop
report shows
account number
preceding the
account name (not
to be confused with
the “Accnt. #”
column) click Edit > Preferences > select “Company Preferences” tab and turn off “Use Account Numbers”
 Converting QuickBooks Desktop to QuickBooks Online
LAST UPDATED: 07/28/23 LLATTA

Account Listing/Chart of Accounts step 2c. Once you have exported the list from QBDesktop to Excel:
1. Clean up the list in Excel by deleting empty columns added by QBDesktop
2. Copy row 1 of the sample XLS file and paste into the QBDesktop excel file to update the header row
information
3. Delete the following rows because they are already in the new QBO company file:
 Accounts Receivable
 Accounts Payable
 Inventory
 Undeposited Funds
 Retained Earnings
 Sales Tax Payable
4. Save this file as Chart of Accounts in Excel
5. Then fill out Detail Type column on each row to be used in QBO (please refer to this spreadsheet located in
the QBO Knowledge Teams channel for Detail Types accepted by QBO)
note: account names can contain a maximum of 100 characters, colons mean subaccounts in QBO and cannot
be used for other purposes, you are limited to 250 accounts for Plus subscriptions.
6. Save this XLS file and import into QBO

2d. Repeat Steps 2a + 2b for Customer Contact List and Vendor Contact List – be sure to customize the report in
QBDesktop to separate out the address; utilize the Sample File downloaded from Gear > Import Lists for each of
these lists and match columns in sample file exactly.
 Converting QuickBooks Desktop to QuickBooks Online
LAST UPDATED: 07/28/23 LLATTA

3. Add beginning balances

4. Add outstanding transactions
5. Configure inventory
6. Complete post conversion activities