Gusto vs QuickBooks Online: Which is Better for Your Business?

Introduction

When it comes to payroll and accounting software, business owners and managers often debate the choice of Gusto vs QuickBooks Online. Both platforms have emerged as leaders in the financial software space for small and medium-sized businesses, offering tools that streamline day-to-day operations, payroll management, and accounting. While QuickBooks Online is renowned for its all-in-one accounting capabilities, Gusto shines as a dedicated payroll and human resources (HR) solution. However, with different pricing, features, and strengths, making the right choice can be challenging.

This article takes a closer look at the key aspects of Gusto vs QuickBooks Online: from payroll, HR features, and integrations to pricing and customer support. By the end, you’ll have a clearer picture of which platform is the best fit for your business needs.

Overview of Gusto and QuickBooks Online

Gusto and QuickBooks Online serve different primary functions, which is essential to consider when choosing between the two. Here’s an overview:

Gusto: Gusto’s primary focus is on payroll and HR, making it an excellent choice for companies that need a streamlined and straightforward payroll solution. Gusto automates payroll, tax filings, and benefits management while providing tools for time tracking, onboarding, and compliance. It’s known for its user-friendly interface and is particularly popular among small to medium-sized businesses that want to simplify their HR operations without adding unnecessary complexity.
QuickBooks Online: QuickBooks Online (QBO), on the other hand, is a full-fledged accounting software that helps businesses manage financial tasks beyond payroll, such as bookkeeping, invoicing, expense tracking, and reporting. While QuickBooks offers payroll as an add-on, its core strengths lie in its accounting capabilities. For businesses that need comprehensive accounting functionality along with payroll, QuickBooks Online offers a one-stop solution.

Key Features Comparison: Gusto vs QuickBooks Online

1. Payroll and HR Tools

Gusto:

Automatic Payroll Runs and Tax Filing: Gusto offers automatic payroll runs and handles federal, state, and local tax filings, making it easy for businesses to remain compliant with tax laws.
Employee Benefits Management: Gusto allows employers to manage benefits, including health insurance, retirement plans, and commuter benefits. This integrated approach to payroll and HR makes Gusto a strong choice for businesses that need benefits management alongside payroll.
Time Tracking and PTO Management: Gusto includes built-in time-tracking tools, enabling employees to clock in and out and submit paid time off (PTO) requests within the platform.
Compliance Assistance: Gusto provides compliance tools that help businesses stay updated on changing employment laws and payroll regulations.

QuickBooks Online:

Basic Payroll Features as an Add-On: QuickBooks Online offers payroll as an add-on, providing basic features like direct deposit and tax filing. However, it lacks some of Gusto’s robust HR tools, such as in-depth benefits management.
Time Tracking through Integration: QuickBooks Online provides time-tracking features through third-party integrations, such as TSheets, now known as QuickBooks Time. This makes it suitable for businesses that want basic payroll but don’t require extensive HR functionalities.
Standard Compliance Support: QuickBooks Online includes standard compliance for payroll but does not offer the same depth of HR and compliance features as Gusto.

2. Accounting and Bookkeeping

Gusto:

Gusto is designed as a payroll and HR platform and lacks comprehensive accounting tools. For bookkeeping and financial reporting, businesses typically need to pair Gusto with dedicated accounting software like QuickBooks or Xero.

QuickBooks Online:

Complete Accounting Solution: QuickBooks Online offers a full suite of accounting features, including income and expense tracking, bank reconciliation, and financial statement generation (balance sheets, profit & loss, and cash flow statements).
Invoicing and Payment Tracking: QuickBooks Online allows businesses to create and send invoices, accept payments, and track income. These features make QuickBooks Online an ideal choice for businesses looking to streamline both accounting and customer billing.

3. Integrations and Compatibility

Gusto:

Integrations with Popular Accounting Software: Gusto integrates with major accounting software like QuickBooks, Xero, and FreshBooks, which makes it easy to manage payroll alongside accounting functions. Additionally, Gusto integrates with HR, time-tracking, and project management tools, providing flexibility.

QuickBooks Online:

Extensive Integration Options: QuickBooks Online integrates with over 650 apps, including customer relationship management (CRM) software, e-commerce platforms, and point-of-sale (POS) systems. This robust integration network makes QuickBooks Online a powerful tool for businesses needing to connect multiple tools and manage everything from a central location.

4. User Interface and Ease of Use

Gusto:

Gusto’s interface is highly intuitive, designed with small businesses in mind. The platform is easy to navigate, allowing business owners and HR managers to handle payroll without needing an extensive background in accounting or HR.

QuickBooks Online:

While QuickBooks Online is also user-friendly, it has a steeper learning curve than Gusto due to its extensive accounting features. QuickBooks Online is designed for users with a basic understanding of bookkeeping, making it ideal for accountants, bookkeepers, or business owners with a background in finance.

5. Customer Support and Resources

Gusto:

Gusto provides email and phone support, and higher-tier plans include dedicated HR support from certified professionals. The platform also offers a comprehensive help center with articles, guides, and webinars covering payroll and HR topics.

QuickBooks Online:

QuickBooks Online offers phone and chat support, and users on higher-tier plans receive priority assistance. The QuickBooks Online help center is extensive, offering resources such as tutorials, how-to guides, and a community forum where users can ask questions.

Pricing Comparison

Pricing is often a key factor for small businesses, and Gusto vs QuickBooks Online differ significantly in cost and plan structure.

Gusto Pricing

Core: $40/month plus $6 per employee – offers essential payroll features, automatic tax filing, and limited benefits administration.
Complete: $60/month plus $9 per employee – includes advanced HR features, such as time tracking and PTO management.
Concierge: $120/month plus $12 per employee – provides access to certified HR experts, ideal for businesses requiring full HR support.

QuickBooks Online Pricing

Simple Start: $30/month – basic accounting tools for sole proprietors or freelancers.
Essentials: $55/month – includes bill management and allows multiple users.
Plus: $85/month – adds project tracking and additional reporting.
Advanced: $200/month – offers premium features and priority support.
Payroll Add-On: Starts at $45/month plus $5 per employee – covers standard payroll features but lacks the comprehensive HR capabilities found in Gusto.

Pros and Cons of Gusto vs QuickBooks Online

Gusto Pros:

Excellent payroll features with automatic tax filing.
Comprehensive HR tools, including employee benefits and compliance support.
User-friendly interface designed for non-accountants.

Gusto Cons:

Limited accounting functionality; requires integration with additional software for bookkeeping and reporting.
Higher costs for larger businesses with many employees due to per-employee fees.

QuickBooks Online Pros:

Extensive accounting features covering all financial aspects of a business.
Broad integration capabilities with various business apps.
Scalable pricing plans for growing businesses.

QuickBooks Online Cons:

Payroll is not included in basic plans and requires an add-on.
Learning curve for users without prior accounting experience.

Which is Better for Small Businesses?

The choice between Gusto vs QuickBooks Online depends on the specific needs of your business:

Choose Gusto if your primary focus is on payroll and HR. Gusto’s straightforward payroll management and HR tools make it ideal for small businesses looking to streamline payroll and employee benefits without complex accounting tasks.
Choose QuickBooks Online if you need a comprehensive accounting platform. QuickBooks Online is suitable for businesses that require in-depth bookkeeping, invoicing, and financial reporting. Additionally, if you’re a business that only needs occasional payroll support, QuickBooks Online’s payroll add-on may suffice without requiring Gusto.

Some businesses may find it beneficial to integrate both platforms, using Gusto for payroll and QuickBooks Online for accounting to take advantage of the best of both worlds.

Conclusion: Making the Right Choice

In the debate of Gusto vs QuickBooks Online, both platforms are industry leaders but serve different purposes. Gusto excels as a payroll and HR tool, while QuickBooks Online is a versatile accounting solution. For businesses that prioritize payroll and benefits management, Gusto is the go-to choice. Meanwhile, companies looking for a full-featured accounting platform with some payroll capabilities will find QuickBooks Online more fitting.

FAQs: Gusto vs QuickBooks Online

Can Gusto integrate with QuickBooks Online?
- Yes, Gusto integrates seamlessly with QuickBooks Online, allowing you to use Gusto for payroll while managing accounting in QuickBooks.
Is Gusto cheaper than QuickBooks Online?
- It depends on your business needs. Gusto is often more cost-effective for payroll-only needs, while QuickBooks Online offers a comprehensive solution at a higher price point.
Is QuickBooks Online better than Gusto for bookkeeping?
- Absolutely. QuickBooks Online is a dedicated accounting software, whereas Gusto lacks bookkeeping capabilities.

With this information in hand, you’re better equipped to make an informed decision between Gusto vs QuickBooks Online based on the unique needs of your business in 2024.