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You might wonder why choosing a good software over another matters. Well, picture this: accurate payroll, smooth invoicing, and effortless financial tracking—all crucial elements for the success of any budding business. That's where Gusto and QuickBooks step in, offering streamlined solutions tailored to the unique needs of startups and small businesses. But with so many options out there, how do you know which one is the perfect fit for your venture?
There are great tools, but not every tool might be good for your business based on your needs or current condition. That's where this comparison comes into play—to guide you through what these two tools offer and help you make a savvy decision.
Payroll And Accounting For Small Businesses
Payroll and accounting software plays a pivotal role in the success of small businesses and startups by streamlining financial processes, ensuring compliance, and providing valuable insights into business performance. These tools automate payroll processing, manage employee benefits, track expenses, generate invoices, and produce financial reports—all essential functions for maintaining financial health and efficiency.
Gusto offers comprehensive payroll and HR solutions with user-friendly features, ideal for businesses seeking simplicity and efficiency. On the other hand, QuickBooks provides versatile accounting tools, including invoicing, expense tracking, and inventory management, catering to businesses needing comprehensive financial management. With these options, entrepreneurs can choose the software that best fits their specific requirements, empowering them to focus on growth and success.
In this article, we will do an extensive review of both, including:
- Features and pricing
- Pros and cons
- Comparison and contrast
- Users Reviews
- Best scenarios for use
Gusto Vs QuickBooks
Gusto:
Gusto is a cloud-based payroll, benefits, and human resource management software designed to streamline and simplify the administrative processes for small—to medium-sized businesses. Its emphasis on ease of use and comprehensive features has helped it secure a strong position among smaller businesses looking for cost-effective HR solutions.
Established in 2011 by Josh Reeves, Tomer London, and Edward Kim, Gusto aims to offer an intuitive platform combining essential HR functions in a single interface. The company has raised substantial funding over multiple rounds, with notable investors including General Catalyst, Kleiner Perkins, and CapitalG.
Gusto primarily targets small to medium-sized businesses across various industries. Its scalable services are designed to accommodate companies with a few employees to those with several hundred, making it a versatile solution for growing businesses.
Key Features
Gusto provides a comprehensive suite of cloud-based HR management tools designed to simplify and automate various HR functions for small and medium-sized businesses. The core services offered by Gusto include:
Key Features of Gusto
- Payroll Management
- Automated Payroll Processing
- Direct Deposit
- Payroll Tax Filing
- Year-End Forms
- Employee Benefits Administration
- Health Benefits
- Retirement Plans
- Workers' Compensation
- Commuter Benefits
- HR Tools
- Onboarding
- Employee Self-Service
- Time Tracking
- Compliance
4. Time and Attendance
- Time Clock
- Time-Off Requests
- Overtime Calculation
5. Compensation and Reporting
- Compensation Management
- Customizable Reports
- Garnishments
6. Integrations and Add-Ons
- Third-Party Integrations
- Custom Workflows
- API Access
Quickbooks
QuickBooks, developed by Intuit Inc., was first released in 1992. Originally aimed at small business owners with minimal accounting knowledge, it has since broadened its reach to encompass mid-sized businesses and freelancers. Over time, QuickBooks has transformed from a basic desktop accounting program into a comprehensive suite of cloud-based services and mobile applications. As of 2024, QuickBooks has become a leading accounting software with millions of users worldwide and a significant market share in the small and medium-sized business (SMB) sector.
Key Features of QuickBooks Online
- Automated Banking and Accounting Features
QuickBooks Online offers a suite of features designed to streamline and optimize financial tasks, including:
- Automatic Payment Reminders
- Data Tracking
- Expense Tracking
- Month-End Reviews
- Transaction Sorting
These features allow users to track income and expenses effectively, enabling financial departments and management to identify cost-cutting opportunities and solve accounting issues creatively.
- Manage Estimates and Invoices
- Estimate and Invoice Creation
- Payment Acceptance
- Automatic Payment Reminders
- Optimized Expense Tracking
QuickBooks simplifies expense tracking by allowing users to store digital copies of receipts without manual data entry. Key features include:
- Receipt Upload
- Automatic Categorization
- Team Member Management Features
QuickBooks offers advanced tools to promote effective employee management and track performance. Key features include:
- Performance Tracking
- Custom Employee Management Tools
- Access tools for account management and payroll to enhance business operations.
- Client Lists Organization
- Custom Account Settings
- Customer Groups
- Customized Payment Receipts
- Multiple Banking Accounts Management
- Built-In Tax Features
QuickBooks provides several features to simplify tax-related processes and prevent common filing mistakes:
- Automated Reporting
- Payment/Filing Reminders
- Tax Preparation Tools
- Track Invoice History
Features Comparison
Comparison and Contrast of Gusto's Features vs. QuickBooks' Features
- Payroll Management: Both Gusto and QuickBooks offer robust payroll management with automated processing, tax filings, direct deposit, and wage garnishment management. The primary difference lies in their integration with other features—QuickBooks integrates payroll with broader accounting features, while Gusto focuses on seamless HR and benefits integration.
- HR and Benefits
For Gusto, you get these;
- Benefits integration: Manages health insurance, retirement plans (401(k)), workers' compensation, and commuter benefits.
- Employee Onboarding: Digital offer letters, e-signatures, and automated form filling.
- Time Tracking: Tools to track employee hours, overtime, and time-off requests.
And for Quickbooks;
- The benefits integration is limited to integration with third-party providers for health insurance and retirement plans
- For employee onboarding, it offers basic features allowing employees to set up their profiles.
- Time Tracking: Integrated with QuickBooks Time for tracking hours, overtime, and time-off requests.
Gusto excels in HR and benefits management, with comprehensive features for benefits administration, onboarding, and compliance. QuickBooks offers basic HR tools, primarily integrating these features with its broader accounting capabilities. Gusto's strength is its focus on creating a seamless HR experience, while QuickBooks integrates essential HR features into its accounting platform.
- Accounting and Finance
Gusto: Gusto integrates with popular accounting software like QuickBooks and Xero, allowing seamless financial management. Additionally, it provides tools for tracking and managing business expenses, making it a comprehensive solution for business financial operations.
QuickBooks: QuickBooks offers comprehensive accounting features, including general ledger, bank reconciliation, accounts payable and receivable, and more. It supports customizable invoice creation, recurring billing, and payment acceptance. The platform provides robust expense tracking capabilities, allowing users to categorize expenses, attach receipts, and monitor spending. Additionally, QuickBooks generates detailed financial reports, such as profit and loss statements, balance sheets, and cash flow statements.
Generally, QuickBooks is a comprehensive accounting solution, offering a wide range of financial management tools. Gusto does not provide standalone accounting features but integrates well with accounting software to complement its payroll and HR functionalities. For businesses needing extensive accounting capabilities, QuickBooks is the better choice. For those focusing on payroll and HR, Gusto, integrated with an accounting tool like QuickBooks, is ideal.
- User Experience
Gusto features an intuitive, user-friendly interface designed for easy navigation, simplifying complex HR and payroll processes to make them accessible even for non-experts. It also offers a mobile app for managing payroll, benefits, and time tracking, allowing employees to access pay stubs, benefits information, and request time off conveniently.
QuickBooks on the other hand also features a clean and organized interface, though its extensive features may require a learning curve. It is designed for both small business owners and professional accountants, offering tutorials and support to aid users. The mobile app allows for managing accounting, invoicing, expense tracking, payroll, and time tracking through QuickBooks Time.
In comparison, both platforms offer user-friendly interfaces and mobile apps for on-the-go management. Gusto is particularly noted for its simplicity in managing HR and payroll tasks, making it very accessible for small business owners. QuickBooks, while also user-friendly, has a broader scope, which can make it more complex but also more powerful for comprehensive financial management. QuickBooks is ideal for businesses needing comprehensive accounting and financial management tools. It integrates essential payroll and basic HR functionalities within a powerful accounting platform, making it suitable for those who prioritize financial management but still need basic HR capabilities.
Overall, Gusto excels in HR management, offering comprehensive HR features across all its plans. In contrast, QuickBooks requires a higher-tier plan to access any HR tools. However, QuickBooks is designed for enterprise-level finance teams, capable of handling various finance-related tasks for large multinational companies. The choice between Gusto and QuickBooks depends on whether a business prioritizes payroll/HR management or comprehensive accounting capabilities. Integrating both can provide a well-rounded solution for many businesses, leveraging Gusto's HR strengths and QuickBooks' accounting power.
Pricing Structure
Gusto Pricing Plans
- Simple Plan: $40/month base price + $6/month per employee
Features:
- Full-service payroll
- Employee self-service and profiles
- Health benefits administration
- Workers' comp administration
- Customer support
- Plus Plan: $80/month base price + $12/month per employee
Features:
- All Simple Plan features
- Next-day direct deposit
- Time tracking and project tracking
- PTO management
- Employee directories and surveys
- Premium Plan: Custom pricing (usually for larger businesses)
Features:
- All Plus Plan features
- Dedicated support team
- HR resource center
- Compliance alerts
- Advanced hiring and onboarding tools
- Contractor Plan: $35/month base price + $6/month per contractor
Features:
- Full-service payroll for contractors
- Contractor self-service
- 1099 form creation and filing
QuickBooks Pricing Plans
- Core: $45/month base price + $5/month per employee
Features:
- Full-service payroll
- Automatic tax calculations and filings
- Health benefits and workers' comp administration
- Next-day direct deposit
- Premium: $75/month base price + $8/month per employee
Features:
- All Core features
- Same-day direct deposit
- Workers' comp administration
- HR support centre
- Project tracking and time tracking
- Elite: $125/month base price + $10/month per employee
Features:
- All Premium features
- Personal HR advisor
- Tax penalty protection
- Expert setup review
- Mobile time tracking
Customer Support and Training
- Gusto provides customer support through phone, email, and chat, ensuring users can access assistance via their preferred communication channel. Additionally, Gusto offers a robust knowledge base covering various aspects of payroll, benefits administration, and HR, along with tutorials and webinars to aid user training and troubleshooting.
- QuickBooks offers customer support via phone, email, and chat, providing users with multiple avenues to seek assistance promptly. Users can also benefit from QuickBooks' extensive knowledge base, which covers topics ranging from accounting to invoicing. Furthermore, QuickBooks offers tutorials and webinars to support user training and enhance their proficiency with the software.
Pros & Cons
Gusto offers a comprehensive suite of payroll, benefits administration, and HR features, making it a holistic solution for small to medium-sized businesses. Its user-friendly interface simplifies payroll processing and HR tasks, ensuring a smooth experience for users. Gusto provides various channels for customer support, including phone, email, and chat, along with transparent pricing, making it easier for businesses to budget effectively. However, the platform may lack advanced customization options for certain features, and some users have reported issues with state reporting consistency and technical glitches, impacting user experience.
QuickBooks Online boasts a wide range of accounting features, including invoicing, expense tracking, reporting, and bank reconciliation, catering to businesses of all sizes. Its cloud-based accessibility allows users to access financial data from anywhere, facilitating remote work and collaboration. QuickBooks Online is scalable, offering various pricing plans to suit different budgets and requirements, and integrates with bank feeds to automate data entry, saving time and reducing errors. Nevertheless, users have reported limitations in customer support, complexities in pricing structures, and occasional technical glitches, which may affect user experience and productivity.
Based on User Reviews and Feedback
We also surveyed users’ reviews on both tools and pulled out the common pros and cons identified. Reviews were surveyed from platforms like G2, Capterra, and Trustpilot.
For Gusto:
Pros
- Ease of Onboarding and User-Friendly Interface: Users appreciate Gusto's straightforward onboarding process and user-friendly interface. One review from G2 mentions, "Gusto's onboarding process was one of the easiest payroll onboarding I've ever experienced." Another user highlights the simplicity of Gusto's interface, stating, "I find the emails well-designed and all written instructions are simple and easy to follow."
- Time Savings and Efficiency: Users mention experiencing time savings and efficiency when using Gusto for payroll processing. One user on Capterra states, "We're seeing a serious time savings when running payroll." Another user appreciates Gusto for helping them focus on their core business activities by taking care of HR tasks and payroll, mentioning, "Gusto helps me focus on what matters, my clients and my team."
- Customer Support: Users generally have positive experiences with Gusto's customer support. While some encountered initial issues, they praise the support received. One user mentions, "I did run into some issues when first getting started with my account. But having tried a large Gusto competitor first, I can say these were minor in comparison."
- State Reporting and Timely Payments: Some users express concerns regarding state reporting consistency and timely payments. One user mentions, "However, state reporting consistency and in-time payments not so much. We've had to pay penalties for late payments."
- Comprehensive Features and Benefits Management: Users appreciate Gusto's comprehensive features, especially in terms of benefits management. One user mentions their project to offer benefits and Gusto's role in facilitating this: "My next big project is getting to a place where my business is big enough while still growing to offer benefits."
- Security and Protection: Users value Gusto's security measures, feeling confident in the protection of their information. One user appreciates the degree of protection offered by Gusto, stating, "The degree of protection that Gusto offers is truly remarkable. I can log in with confidence every time because my information is protected."
Cons
- Issues with State Reporting and Late Payments: Some users express dissatisfaction with Gusto's state reporting consistency and timely payments. One review mentions, "However, state reporting consistency and in-time payments not so much. We've had to pay penalties for late payments."
- Initial Learning Curve and Setup Challenges: A few users encountered challenges during the initial setup or onboarding process. One user mentions, "In the onboarding process, it wasn't clear how you can change something in one of the previous steps after you moved on to the next step." Another user mentions, "I did run into some issues when first getting started with my account."
- Limited Customization and Features Discovery: Some users feel that Gusto lacks customization options or that certain features are not easily discoverable. One user mentions, "In the 4-5 months I've been using Gusto, I've had no issues, and haven't needed to log into my account since the info I want--breakdown of pay/taxes deducted--is included in each email on pay day. Once I logged in, I was surprised to see the variety of tools available, such as spending trends. So perhaps other folks may be missing these."
- Occasional Technical Glitches: A few users report encountering technical glitches or issues with the platform. One user mentions, "However, state reporting consistency and in-time payments not so much. We've had to pay penalties for late payments and Gusto doesn't seem to care."
- Dependency on the Platform and Future Limitations: Some users express concerns about becoming dependent on the platform, which could limit future possibilities. One user mentions, "I see myself depending to a certain extent on the platform, which will limit my future possibilities because that is the only drawback of any type of platform: that they are usually proprietary."
For Quickbooks:
Pros:
- Ease of Use and Cloud-Based Accessibility: Users appreciate QuickBooks Online's ease of use and cloud-based accessibility, allowing them and their team to work from anywhere. One user mentions, "Easy to use. Love that it is cloud-based and can log in from anywhere." Another user highlights the convenience of transitioning from a home-grown accounting system to QuickBooks Online, stating, "It was fairly easy to transition from a home-grown Excel-based accounting system to QuickBooks Online with the help of an expert."
- Bank Feed Feature and Time-Saving Capabilities: Users find the bank feed feature helpful for tracking expenditures and saving time on data entry. One user mentions, "Also my favorite feature which probably saves hours of time per month is the bank feed feature." Another user appreciates the automation enabled through QuickBooks Online, stating, "The level of automation enabled through these 3 solutions, all integrated into QBO, has reduced month-end invoicing from a solid week to literally 30 minutes each month."
Cons:
- Support and Customer Service: Mixed opinions exist regarding QuickBooks Online's customer support. While some users appreciate the system, others express frustration with the support received. One user mentions, "Support leaves a little to be desired. On the few occasions that I had to call, the solution was not forthcoming."
- Error Messages and Technical Issues: Users report encountering error messages and technical glitches, leading to frustration with the system. One user mentions, "Error messages constantly received because 'there's a message from your bank' bla bla bla." Another user expressed frustration with technical issues and unhelpful customer service representatives, stating, "Other than tracking my expenditures, the whole system is a pain."
- Pricing and Fees: Some users express dissatisfaction with the pricing and fees associated with QuickBooks Online. One user mentions, "Some of the fees I don't like but that's something I can get over if the service is great." Another user criticizes QuickBooks Online for charging fees and experiencing issues with payroll processing, stating, "They literally hold your money hostage and then charge astronomical fees for transfers."
Use Case Scenarios
Having provided an extensive review of both tools, it may seem both have great perks and relative shortcomings. Hence, you may want to make your choice based on the business’s needs or current situation.
For Gusto, here are the best cases where you can use it:
- Small to Medium-Sized Businesses with Limited HR Resources: Gusto is ideal for businesses that do not have dedicated HR personnel or departments. It offers robust HR features such as payroll processing, benefits administration, and compliance management, making it a comprehensive solution for businesses of all sizes.
- Growing Companies Scaling Their Workforce: Gusto is well-suited for growing companies that are expanding their workforce. Its scalability allows businesses to easily manage payroll and HR tasks as they hire more employees, providing a seamless transition during periods of growth.
- Remote Work Environments: In remote work environments where employees may be distributed across different locations, Gusto's cloud-based platform is advantageous. It enables remote employees to access payroll information, submit time-off requests, and complete HR tasks from anywhere, enhancing flexibility and accessibility.
- Compliance-Driven Industries: Industries with strict compliance requirements, such as healthcare, finance, and legal services, can benefit from Gusto's compliance features. Gusto helps businesses stay compliant with federal, state, and local regulations by automating tax filings, providing compliance updates, and offering HR support.
- Businesses Seeking Cost-Effective Solutions: For businesses looking for a cost-effective payroll and HR solution, Gusto's transparent pricing and feature-rich packages make it an attractive option. Gusto offers competitive pricing with no hidden fees, making it a budget-friendly choice for businesses of all sizes.
Best Scenarios to Use QuickBooks:
- Small Businesses and Startups: QuickBooks Online is an excellent choice for small businesses and startups that need a simple yet comprehensive accounting solution. It offers essential features like invoicing, expense tracking, and financial reporting, helping small businesses manage their finances effectively from the start.
- Freelancers and Independent Contractors: Freelancers and independent contractors can benefit from QuickBooks Online's invoicing and expense tracking features. It allows them to create professional invoices, track income and expenses, and manage their finances efficiently, saving time and improving financial organization.
- Growing Businesses with Multiple Users: QuickBooks Online is suitable for growing businesses that require multiple users to access and collaborate on accounting data. Its cloud-based platform enables real-time collaboration, allowing multiple users to work on the same company file simultaneously, which is beneficial for businesses with remote teams or multiple office locations.
- Service-Based Businesses: Service-based businesses, such as consulting firms, law firms, and marketing agencies, can use QuickBooks Online to track billable hours, manage projects, and invoice clients accurately. QuickBooks Online offers features like time tracking and project management integrations, making it an ideal solution for service-oriented businesses.
- Businesses with Inventory Management Needs: QuickBooks Online's inventory management features are valuable for businesses that need to track inventory and manage stock levels. It allows businesses to track inventory quantities, create purchase orders, and manage vendors, ensuring efficient inventory control and accurate financial reporting.
Our recommendation:
Gusto is best suited for businesses seeking robust payroll and HR solutions with comprehensive benefits administration and user-friendly design. It excels in creating a seamless HR experience with features like benefits management, employee onboarding, and compliance assistance.
QuickBooks is ideal for businesses needing comprehensive accounting and financial management tools. It integrates essential payroll and basic HR functionalities within a powerful accounting platform, making it suitable for those who prioritize financial management but still need basic HR capabilities.
The choice between Gusto and QuickBooks should depend on whether your business prioritizes payroll/HR management or comprehensive accounting capabilities. For many businesses, integrating both can provide a well-rounded solution, leveraging Gusto's HR strengths and QuickBooks' accounting power.
Conclusion
In summary, we've discussed the key features and ideal scenarios for both Gusto and QuickBooks Online:
For Gusto:
- Robust HR features, ideal for small to medium-sized businesses with limited HR resources.
- Scalable solution for growing companies expanding their workforce.
- Cloud-based platform suited for remote work environments.
- Compliance support for industries with strict regulations.
- Cost-effective payroll and HR solution with transparent pricing.
For QuickBooks Online:
- Comprehensive accounting tools suitable for small businesses, freelancers, and startups.
- Ideal for managing finances, invoicing clients, and tracking expenses.
- Scalable platform for growing businesses with multiple users.
- Inventory management features for businesses with inventory needs.
- Integration capabilities with various third-party applications and tools.
Consider taking advantage of free trials offered by both software providers to explore the features and functionalities firsthand and determine which solution best fits your requirements.
FAQS
- What are the core functionalities of Gusto and QuickBooks, and how do they differ?
Answer: Gusto primarily focuses on payroll and HR services, offering features such as payroll processing, benefits administration, and compliance management. In contrast, QuickBooks provides a comprehensive suite of accounting tools, including invoicing, expense tracking, financial reporting, and inventory management, in addition to payroll services.
- Which businesses are better suited for Gusto, and which are better suited for QuickBooks?
Answer: Gusto is well-suited for businesses that prioritize HR management and require robust payroll solutions. It caters to small to medium-sized businesses across various industries, especially those with limited HR resources or growing workforces. QuickBooks, on the other hand, is suitable for businesses of all sizes, offering comprehensive accounting tools tailored to the needs of freelancers, startups, and established enterprises.
- How do Gusto and QuickBooks handle payroll processing differently?
Answer: Gusto simplifies payroll processing with automated features for calculating employee wages, processing payments, and managing payroll taxes. It also offers tools for benefits administration, time tracking, and compliance management. QuickBooks also provides payroll services but integrates them with its broader accounting functionalities, allowing users to seamlessly manage payroll alongside other financial tasks such as invoicing, expense tracking, and reporting.
- What are the key features of Gusto's HR management compared to QuickBooks?
Answer: Gusto's HR management features include employee onboarding, time-off management, and compliance support, aimed at simplifying HR processes for small to medium-sized businesses. QuickBooks, while offering basic HR features, focuses more on accounting-related tasks such as invoicing, expense tracking, and financial reporting, with limited emphasis on HR-specific functionalities.
- How do Gusto and QuickBooks support businesses with remote teams or multiple office locations?
Answer: Both Gusto and QuickBooks are cloud-based platforms that support businesses with remote teams or multiple office locations. They offer features for real-time collaboration, remote access to financial data, and integration with other business tools. However, Gusto's focus on HR management may provide additional support for businesses managing distributed workforces, whereas QuickBooks' comprehensive accounting tools cater to broader financial management needs.
- What level of customer support do Gusto and QuickBooks offer, and how does it differ?
Answer: Gusto and QuickBooks both offer customer support options such as phone, email, and chat support, along with extensive help centres and knowledge bases. Gusto is known for its responsive customer service team and dedicated HR support, whereas QuickBooks provides a range of support resources tailored to accounting and financial management needs.
- How do Gusto and QuickBooks handle pricing, and are there any notable differences in their pricing models?
Answer: Gusto and QuickBooks offer tiered pricing plans based on the number of employees and features required by the business. While both platforms have transparent pricing structures, Gusto's pricing is primarily based on the number of employees, whereas QuickBooks' pricing plans may vary based on the level of accounting features needed, with additional fees for payroll services. It's essential to review the pricing details carefully to determine the most cost-effective option for your business needs.
- Can Gusto and QuickBooks accommodate businesses with remote teams or multiple office locations?
Answer: Yes, both Gusto and QuickBooks are cloud-based platforms that can accommodate businesses with remote teams or multiple office locations. They offer features for real-time collaboration and access to financial data from anywhere, making them suitable for companies with distributed workforces.
- Can Gusto and QuickBooks be integrated with each other?
Answer: Yes, Gusto and QuickBooks can be integrated with each other to streamline payroll and accounting processes. The integration allows payroll data from Gusto to be automatically synced with QuickBooks, ensuring accuracy and efficiency in financial management.
- Are there any additional fees or hidden costs associated with Gusto or QuickBooks?
Answer: Gusto and QuickBooks have transparent pricing structures with no hidden fees. However, additional fees may apply for certain features or services beyond the basic subscription plans, so it's essential to review the pricing details carefully before deciding.
