Understanding QuickBooks Fees

Before diving into avoidance strategies, it's important to understand the different types of fees associated with QuickBooks:

Subscription Fees

QuickBooks Online offers several pricing tiers with monthly subscription fees:

• Simple Start: $30/month
• Essentials: $60/month
• Plus: $90/month
• Advanced: $200/month

QuickBooks Desktop also has annual subscription fees ranging from $399.99 to $1,340 per year depending on the version.

Payment Processing Fees

When accepting payments through QuickBooks, you'll incur the following fees:

• For invoiced credit card payments: 2.99% + $0.25 per transaction
• For ACH bank transfers: 1% (max $10)
• For in-person card payments: 2.4% + $0.25 per transaction
• For keyed-in card payments: 3.4% + $0.25 per transaction

Payroll Fees

If using QuickBooks Payroll, additional monthly fees apply:

• Core: $45/month + $4/employee
• Premium: $75/month + $8/employee
• Elite: $125/month + $10/employee

Add-on Fees

QuickBooks charges extra for certain advanced features and integrations.

Now that we understand the fee structure, let's explore strategies to minimize these costs.

Strategies to Avoid QuickBooks Fees

1. Choose the Right Subscription Plan

One of the easiest ways to avoid unnecessary fees is to select the QuickBooks plan that best fits your needs without overpaying for features you won't use.

Tips:

• Carefully evaluate the features included in each plan
• Consider your business size and accounting needs
• Start with a lower-tier plan and upgrade only if necessary
• Take advantage of free trials to test features before committing

For example, if you're a sole proprietor or small business owner, the Simple Start plan at $30/month may be sufficient. Only upgrade to higher tiers if you truly need the additional features.

2. Optimize Payment Processing

QuickBooks' payment processing fees can add up quickly, especially for businesses with high transaction volumes. Here are some ways to reduce these costs:

Use ACH payments when possible: At 1% with a $10 maximum, ACH transfers are significantly cheaper than credit card processing. Encourage customers to pay via ACH for large invoices.

Negotiate lower rates: If you process over $7,500 per month, contact QuickBooks to inquire about reduced rates. High-volume merchants may qualify for custom pricing.

Consider third-party payment processors: Services like Stripe or Square may offer lower rates, especially for certain industries or transaction types. Compare pricing carefully.

Implement a cash discount program: Offer a small discount (e.g. 2-3%) for customers who pay in cash or by check to offset credit card fees.

Set minimum transaction amounts: For in-person sales, consider setting a minimum purchase amount for credit card transactions to avoid losing money on small sales.

3. Minimize Payroll Costs

If using QuickBooks Payroll, try these strategies to reduce fees:

Choose the right payroll plan: Only pay for the features you need. The Core plan may be sufficient for many small businesses.

Optimize pay schedules: Processing payroll less frequently (e.g. bi-weekly instead of weekly) can reduce overall fees.

Consider alternatives: Third-party payroll services like Gusto or ADP may be more cost-effective depending on your needs.

Do it yourself: For very small businesses, manually calculating and filing payroll can save money, though it requires more time and effort.

4. Avoid Add-on Fees

QuickBooks charges extra for certain advanced features. Here's how to minimize these costs:

Utilize free alternatives: Many QuickBooks add-ons have free or low-cost alternatives. For example:

• Use Google Sheets instead of Advanced Reporting
• Leverage free time tracking apps instead of TSheets
• Explore open-source CRM options instead of Salesforce integration

Negotiate bundled pricing: If you need multiple add-ons, contact QuickBooks sales to inquire about package deals or discounts.

Develop in-house solutions: For businesses with technical resources, creating custom integrations or reports may be more cost-effective long-term than paying for add-ons.

5. Maximize Efficiency to Reduce Indirect Costs

While not direct fees, inefficient use of QuickBooks can lead to wasted time and money. Optimize your processes to indirectly reduce costs:

Automate where possible: Set up bank feeds, recurring transactions, and automated invoicing to save time.

Train staff thoroughly: Proper training reduces errors and increases efficiency, potentially allowing you to use a lower-tier plan.

Regularly reconcile accounts: Staying on top of reconciliations prevents costly mistakes and time-consuming backtracking.

Utilize QuickBooks' free resources: Take advantage of QuickBooks' extensive knowledge base, video tutorials, and community forums for free training and troubleshooting.

6. Explore QuickBooks Alternatives

If QuickBooks fees are still too high after implementing these strategies, consider alternative accounting software options:

Wave: Free for basic accounting, invoicing, and receipt scanning. Only pay for payroll and payment processing.

Xero: Offers similar features to QuickBooks at potentially lower price points, starting at $12/month.

FreshBooks: Geared towards freelancers and service-based businesses, with plans starting at $15/month.

Zoho Books: Part of the Zoho ecosystem, with plans starting at $15/month and a free tier for very small businesses.

When evaluating alternatives, consider:

• Features and scalability
• Ease of use and learning curve
• Integration with other tools you use
• Customer support quality
• Total cost of ownership, including any migration costs

7. Negotiate with QuickBooks

Don't be afraid to negotiate, especially if you're a long-time customer or high-volume user. Strategies include:

Ask for discounts: QuickBooks occasionally offers promotional pricing. Ask if any discounts are available.

Request a price match: If you find a competitor offering similar features at a lower price, ask QuickBooks to match it.

Threaten to cancel: Sometimes, the retention department has the authority to offer better rates to keep you as a customer.

Join professional associations: Some industry groups have negotiated discounts with QuickBooks for their members.

8. Leverage Seasonal Promotions

QuickBooks frequently offers discounts and promotions, especially around major holidays and the start of new financial quarters. Strategies to take advantage of these include:

Time your purchase or renewal: If possible, wait for promotional periods to start or renew your subscription.

Follow QuickBooks on social media: They often announce limited-time offers through their social channels.

Sign up for email newsletters: Get notified of upcoming sales and promotions directly in your inbox.

Check deal websites: Sites like RetailMeNot and Slickdeals often list current QuickBooks promo codes.

9. Optimize Your QuickBooks Usage

Efficient use of QuickBooks can indirectly reduce costs by allowing you to accomplish more with a lower-tier plan:

Regularly review and clean up your company file: Remove unused accounts, items, and customers to improve performance.

Use class tracking effectively: This can eliminate the need for multiple company files, potentially allowing you to downgrade your subscription.

Leverage reporting features: Master QuickBooks' built-in reports to avoid paying for third-party reporting tools.

Utilize memorized transactions: Set up recurring entries to save time and reduce errors.

10. Consider Hybrid Approaches

Sometimes, a combination of QuickBooks and other tools can be more cost-effective than relying solely on QuickBooks:

Use QuickBooks for core accounting: Leverage a basic QuickBooks plan for essential bookkeeping, while using free or low-cost alternatives for specific functions like time tracking or inventory management.

Combine with spreadsheets: For businesses with simple needs, using QuickBooks in conjunction with well-designed spreadsheets can often replace the need for more expensive advanced features.

Integrate with low-cost apps: Explore the QuickBooks App Store for affordable integrations that can extend functionality without upgrading to a higher-tier plan.

Conclusion

While QuickBooks offers powerful accounting features, its fees can be a significant expense for small businesses. By carefully evaluating your needs, optimizing your usage, and exploring alternatives, you can minimize QuickBooks fees without sacrificing essential functionality. Remember to regularly review your QuickBooks subscription and associated costs to ensure you're getting the best value for your business. With strategic planning and implementation of these tips, you can harness the power of QuickBooks while keeping your accounting costs under control.

Sources: [1] https://quickbooks.intuit.com/payments/payment-rates/ [2] https://quickbooks.intuit.com/learn-support/en-us/payments/what-is-quickbooks-ach-fees/00/1270297 [3] https://quickbooks.intuit.com/learn-support/en-us/reports-and-accounting/to-avoid-some-of-the-outrageous-fees-for-accepting-credit-card/00/1042360 [4] https://www.cardchamp.com/blog/quickbooks-fees [5] https://www.payorcrm.com/reduce-credit-card-fees-using-quickbooks/ [6] https://tech.co/accounting-software/quickbooks-online-pricing [7] https://www.nerdwallet.com/article/small-business/quickbooks-pricing [8] https://www.ecisolutions.com/blog/the-hidden-costs-of-quickbooks/