Accounting software comes in two forms: desktop and cloud based. Desktop software is easier to install but needs more upkeep. Cloud software lets users access accounts from anywhere and sync data across devices. Both types offer similar features, but differ in how much control you have. With cloud software, your accountant can view your books without logging into your computer.
There are several common types of files:
OFX/QBO is the most common format for bookkeeping. Most banks support it. Most banks let you download QBO or QBFC files from your online banking account. Some banks only provide the last 90 days of data. Others do not offer historical data at all. QuickBooks imports QBO files into the Bank Feeds Centre. There you match payees to vendor records and assign expense or income accounts. QuickBooks learns your choices and uses them for future imports.
QIF is one of the oldest widely used formats for exporting and importing transactions. It stores account names, balances, amounts, dates, categories, and tags. The format has changed over the years, so converting between versions can be hard. QIF files from older software may not work with newer apps. Some companies ask users to upgrade before they can read old QIF data.
IIF was created by Intuit for QuickBooks but is now used by many apps. Before importing an IIF file, back up your company file first to avoid data loss.
QBJ is a newer format for importing General Journal Entries into QuickBooks. It provides a full audit trail for each entry. The downside is that entering entries through the QuickBooks interface is slower than using a spreadsheet. Compared to QBO, QBJ is more advanced. You can create multiple debit and credit accounts, assign accounts and classes, with no limit on accounts.
CSV is supported by a few accounting apps like QuickBooks Online. It is a good choice if your transactions are already in a spreadsheet or downloaded from your bank as a CSV. Unlike QBO, IIF, and QBJ, CSV is a "free form" format. The data can be laid out in many ways. You may have two date columns or columns that an accounting app cannot use. Date formats can differ (day/month vs month/day). Amount formats may use different decimal or thousand separators. Transactions may span one or more lines. The first line may be a header, or the first few lines may be statement details, not transactions. You may need to reformat the CSV in a spreadsheet before importing into QuickBooks.
PDF was built as a universal format for storing documents. To convert a PDF to a format like Excel, you need additional software.
Always check what download formats your bank offers. Also check what import formats your accounting system supports. Having conversion tools on hand is useful if you work with many clients.