How to Downgrade Subscription in QuickBooks Online

Deciding to adjust your business software expenses is a smart, proactive step, and changing your QuickBooks Online subscription is more straightforward than you might think. Whether your business needs have shifted or you're simply optimizing your budget, this guide will walk you through exactly how to downgrade your plan. We'll cover the step-by-step process, what features you might lose, and how to handle special circumstances, ensuring you make the change with confidence.

Before You Downgrade: Key Considerations

Downgrading your QuickBooks Online (QBO) plan is a financial decision, but it's also a functional one. Moving to a lower-tier plan means losing access to certain features. Before you make the switch, it's critical to evaluate which tools you currently use and whether your business can operate smoothly without them. If you cancel an upper-tier plan like Advanced or Plus, you'll lose the corresponding features immediately on your next billing date.

Here’s a breakdown of the key features found in higher-tier plans and what you’d be giving up by downgrading:

• Inventory Management (Plus & Advanced): If you sell products, this is a significant feature. QBO Plus and Advanced plans allow you to track inventory levels, cost of goods sold (COGS), and receive notifications when stock is low. Downgrading to Essentials or Simple Start will remove this feature. Your existing inventory items will be converted to non-inventory items, so you can still use them on transactions, but QBO will no longer track quantities on hand.
• Bill Management (Essentials, Plus & Advanced): The Simple Start plan is designed for basic income and expense tracking and does not include bill management. If you downgrade to Simple Start, you will lose the ability to enter and pay bills from vendors directly within QuickBooks. You’ll have to track your bills payable through another method.
• Project and Job Profitability (Plus & Advanced): Do you track the profitability of individual projects or jobs? This is a core function of the Plus and Advanced plans. It allows you to assign income and expenses to specific projects to see which ones are truly making you money. Downgrading means losing access to the Projects dashboard and its associated reports.
• Class and Location Tracking (Plus & Advanced): This feature is invaluable for businesses that want more granular reporting. You can tag transactions by department, business line, or physical location. If you downgrade, you won't be able to run reports like a Profit and Loss by Class. The class and location data on past transactions will remain, but you won't be able to filter new reports using that information.
• Time Tracking (Essentials, Plus & Advanced): Tracking employee or contractor hours and marking them as billable to a customer is a feature that starts with the Essentials plan. If your downgrade takes you to Simple Start, you will lose the built-in time tracking functionality. This could be problematic if you rely on it for billing or payroll.
• Enhanced User Permissions (Advanced): The QBO Advanced plan offers the most detailed user roles and permissions. You can give a team member access only to sales transactions or only to expense reports. Lower-tier plans offer more general roles (e.g., standard user, administrator). If you downgrade, you’ll revert to broader permission settings, which may give some users more access than you’d prefer. Your number of available user seats will also decrease.
• Batch Invoicing and Expenses (Advanced): A major time-saver for businesses with high transaction volumes, batch processing allows you to enter and send multiple invoices, checks, or expenses at once. This exclusive Advanced feature will be gone upon downgrading, meaning each transaction must be entered individually.
• Custom Reporting and Business Analytics (Advanced): While all QBO plans have standard reports, the Advanced plan unlocks powerful customization, performance dashboards, and smart reporting powered by Fathom. If in-depth analysis is a pillar of your financial management, moving to a lower plan will feel restrictive.

Take a few minutes to review your "Account and settings" and the features you actively use. This small bit of homework will prevent major operational headaches after you downgrade.

Step-by-Step Guide to Downgrading Your QuickBooks Online Subscription

Once you’ve confirmed that a lower-tier plan has everything you need, you're ready to make the change. The process is handled directly within your QBO account. Remember, you must be the primary or company administrator to change the subscription.

Follow these steps carefully:

1. Sign In to Your Account: Log in to your QuickBooks Online account as the administrator.
2. Navigate to Account and Settings: In the upper right corner of your screen, you'll see a Gear icon. Click it to open the main settings menu.
3. Select "Account and settings": Under the "Your Company" column, click on Account and settings.
4. Open the Billing & Subscription Tab: On the left side of the "Account and settings" screen, you will see a menu of options. Click on the last one, labeled Billing & Subscription. This is your command center for all billing-related matters.
5. Find Your Plan and Choose to Downgrade: You will see your current QuickBooks Online plan listed at the top. To the right of the plan details, you should see an option that says Downgrade your plan. Click on this link. (Note: If you don't see this option, jump to the "Common Questions and Troubleshooting" section below).
6. Review Available Plans: QuickBooks will display the available plans you can downgrade to. It will typically show a comparison chart highlighting the features of each plan. This is your last chance to review what you'll be giving up. Take a moment to double-check that the plan you are choosing meets your needs.
7. Choose Your New Plan: Once you've made your final decision, click the Choose plan button for the subscription level you want.
8. Confirm the Change: A final confirmation screen will appear. It will explain what to expect next, including when the changes will take effect (typically your next billing date). Follow the on-screen prompts to confirm and save your selection.

That's it. Your subscription is now scheduled to downgrade. You will retain access to all your current features until your renewal date, at which point your plan will switch over and your billing will be adjusted accordingly.

What Happens After You Downgrade?

Flipping the switch is just the first step. Understanding what happens to your data and access afterward is key to a smooth transition.

• Loss of Functionality: As mentioned, the moment your subscription renews at the lower rate, you lose access to the features not included in that plan. The menu options for things like Projects or Inventory will simply disappear from your QBO interface.
• Historical Data Remains (Mostly): The good news is that QuickBooks won't delete historical data you've entered. For example, if you downgrade from Plus to Simple Start, the transactions you previously assigned to a class will still have that class information attached. However, your ability to use that data will be gone. You'll no longer be able to run a 'Profit & Loss by Class' report. The data exists on the backend, but the reporting functionality is disabled.
• Users May Need to Be Removed: If you're downgrading to a plan with a lower user limit (e.g., from Advanced with 25 users to Plus with 5 users), you will be prompted to remove users until you meet the new plan's limit. You must do this before the downgrade can be finalized. Decide ahead of time which users you will be removing to avoid delays.
• Re-Upgrading Is Easy: If you find that the new plan is too restrictive, don't worry. You can upgrade again at any time by following the same steps. Just go back to the "Billing & Subscription" tab and select "Upgrade your plan."

Common Questions and Troubleshooting

Sometimes, the downgrade option isn't where you expect it to be. Here are a few common scenarios and how to resolve them.

Why don't I see the "Downgrade your plan" option?

This is usually due to one of a few reasons:

• You're Billed Through an Accountant: Many accounting firms bundle QBO subscriptions for their clients. If your accountant set up your billing, you won't see the downgrade option. Contact your accountant directly; they will need to make the change for you.
• You Subscribed Through a Mobile App Store: If you purchased your QBO subscription through the Apple App Store or Google Play Store, you must manage it there. Open your phone’s settings, go to your Subscriptions list, and make the changes from within the app store interface.
• You Have a Past-Due Balance: Intuit requires your account to be in good standing before any subscription changes can be made. Settle any outstanding balance from the "Billing & Subscription" tab, and the downgrade option should appear.
• You Have an Annual Subscription: If you paid for a full year upfront, you generally cannot downgrade mid-term. You will have to wait until your annual subscription is about to renew to select a different plan for the next year.

Can I put my account on hold instead of downgrading?

If you anticipate not needing QuickBooks for a short period, you can opt to pause your subscription instead. This is an option in the "Billing & Subscription" area under "Cancel subscription." QuickBooks will save your data, and you can resume your account at your current plan level when you're ready, but be aware billing automatically resumes after the pause period.

Final Thoughts

Changing your QuickBooks Online plan is a straightforward process, but preparing for the transition is what makes it a success. By carefully assessing which features are essential and which are nice-to-haves, you can align your subscription level with your actual business needs, ensuring you're only paying for what you use.

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