The QuickBooks Software License Agreement: Things You MUST Know

I know – you blew right past the license agreement when you installed QuickBooks, right?

It’s critical to take a moment and understand what you agreed to when you clicked ok to the End User License Agreement (EULA). If you don’t, it may come back to haunt you. In a big way…

IMPORTANT DISCLAIMERS:

• I specifically asked the Intuit legal department for guidance about the information below to ensure that my intepretation of their seventeen (17) pages of legal-ese was accurate. They declined to engage with me on this very important issue, citing "the official Intuit interpretation of the license agreement is the EULA itself". Say what?
  
  A big shout out to Intuit for being so unhelpful and having this type of condescending attitude toward those of us who are trying to help the thousands of users out there that are mystified by the license agreement, especially in a multi-user environment.


• I am not an attorney. If you have a question about whether your business is violating the QuickBooks license agreement, please consult your legal counsel for guidance. The wording below is strictly my understanding of how the licensing is supposed to work. So here goes...

WHO/WHAT IS EULA?

Well, she is the End User License Agreement you agreed to when you installed QuickBooks on your computer. Remember her now?

There seems to be a lot of confusion in the land of QuickBooks regarding licensing, so I thought it made sense to dig in, take a look around the legalese and share my findings with you.

In case you need a refresher on the terms of your QuickBooks EULA, you can click on Help, then search for the term “license.” From here, you can review or print the agreement for your records.

FOR SINGLE USERS OF QUICKBOOKS

First, let’s focus on the single user portion of the EULA. Here is the section of the EULA that relates to a single user license:

"Single User License and Single User Add On Pack Purchasers. You may: (a) install the Software on one computer for access and use by only one specific person; and (b) install the Software on one additional computer (e.g., a laptop that you own and use in your business or a home computer that you own and use in your business), so long as only the same specific person accesses and uses the Software"

Translation to non-legal speak: you can install QuickBooks on one computer as your main computer, AND install it on another computer, BUT only if YOU are the only one using the software in both places. For example – you have QuickBooks installed on your desktop computer at the office, and also have it installed on your laptop computer for use at home and you transfer your QuickBooks information between the two via a flash drive. The laptop computer is considered your “one additional computer” in this case and this arrangement complies with the terms of the EULA, especially since YOU are the only person using QuickBooks in both places.

However, if you have QuickBooks installed on your desktop computer at the office, and also have it installed on another desktop (or laptop) computer at the office with someone else using it (even if it is your spouse), the second desktop (or laptop) computer is not truly a backup copy of QuickBooks. In this example, you’d be in violation of the EULA. Two people using QuickBooks = 2 licenses required.

My interpretation of the EULA is that each PERSON that will be using QuickBooks needs their own licensed copy of QuickBooks software. That approach prevents any misunderstanding as well as any possible violations of the EULA, whether accidental or intended.

FOR MULTI-USERS OF QUICKBOOKS

Ok, here is the legalese first:

"Multi User License and Multi User Add On Pack Purchasers. You may: (a) install the Software on the number of computers equal to the number of user licenses you purchased; (b) access and use the Software solely by the number of specific persons corresponding to the number of user licenses you purchased, with no substitution of such users (for example, if you purchased a 3 user license pack and you have 10 employees in your company, the original 3 specific persons who were initially provided with access to and use of the Software, are the only persons licensed to use the Software unless you purchase additional licenses; (c) place a copy of your software data files on a network for access by licensed users; (d) install the Software on 1 additional computer above the number of the license(s) you purchased, solely to accompany your software data file, and not for use of the Software by another user; and (e) for each user license you purchased, make one copy of the printed materials accompanying the Software, if any, or print one copy of any online user documentation solely for use by licensed users. Notwithstanding (b) above, you may replace a specific user if such user leaves and must be replaced with a new employee."

Translation to non-legal speak:

• You have to have a paid license for EACH PERSON that will be using QuickBooks regularly. For example, if you want 4 people in your office to use QuickBooks regularly, you should purchase 4 licenses to be compliant. It doesn't matter whether these 4 people are all in the same office location or if three are in the main office and one is in a remote office. 4 licenses for QuickBooks would still need to be purchased.

• If you want to put the full copy of QuickBooks (and not just the database server manager) on your server or host computer, that is permissible, as long as nobody is regularly using QuickBooks on the server or host computer. This is key – if someone is going to be using QuickBooks regularly on the server or host computer, a license must be purchased for it.

• This discussion of users has nothing to do with the number of users that can be created within a QuickBooks company file. This discussion relates to the actual installation of the QuickBooks software.

CRITICAL NOTE: Even if you purchase the right number of licenses, another restriction may apply. That restriction is the simultaneous access restriction which is discussed below.

BUT WAIT - YOU'RE NOT DONE YET!

MULTI USER IS NOT THE SAME AS SIMULTANEOUS ACCESS

Simultaneous access is not a copyright protection device, but a product feature within QuickBooks that allows multiple users to access a data file at the exact same time. 

Each of those users must still be licensed, whether or not they are using the simultaneous access feature at any given time. 

QuickBooks Pro, Premier and Enterprise licensing is sold in packages to allow simultaneous access for businesses needing multiple users of QuickBooks. Examples – Pro 2 user, Premier 3 user, Enterprise 5 user, etc.

TO ILLUSTRATE:

Let’s say that your company has 6 people that need to use QuickBooks. 4 of these people will use QuickBooks regularly, and the other 2 will only need access once in a while.

For you to comply with the multi-user portion of the EULA – since 6 people will need to access QuickBooks, your company would need to purchase 6 licenses of QuickBooks to be compliant. You may very well find that you can get a discount when you purchase multiple licenses of QuickBooks, but you still need to purchase a total of 6.

But, as part of this process, you don’t feel you should have to shell out for 6 licenses, especially since two of the people won’t be using it regularly.

So, you purchase 5 licenses of QuickBooks Premier and install it on the 6 different computers, figuring nobody will know.

PROBLEM #1:

By doing this, you have violated the terms of the EULA. You should have purchased 6 licenses.

PROBLEM #2:

Even if you did purchase 6 licenses to be in compliance with the EULA…

Only 5 computers could connect to your QuickBooks data at any one time. That is because you purchased the Premier version of QuickBooks, and by default, the Premier version only allows up to 5 people to have "simultaneous access" to the company QuickBooks data file. QuickBooks Premier allows no more than that, no matter how hard you try (QuickBooks Pro allows no more than 3 in the 2011 edition and no more than 5 in older editions). In this situation, to have all 6 people access the company QuickBooks data file at the same time, the only option is to purchase the Enterprise edition of QuickBooks, which allows up to 30 people access at the same time.

This is due to the simultaneous access restriction that is embedded into QuickBooks Pro, Premier and Enterprise. No matter how many licenses you need to purchase to be compliant with the EULA, access will be limited to the maximum number of simultaneous users (i.e. 3 users maximum for Pro, 5 users maximum for Premier versions, etc.)

CONCURRENT USERS OR PER MACHINE LICENSING?

I am constantly asked this question and can offer the following advice…

For all intents and purposes, you will need to toss both of these terms out when it comes to purchasing QuickBooks licenses and get comfortable with the idea that a license needs to be purchased for each person that will be using QuickBooks, and that the simultaneous access feature embedded in QuickBooks may still prevent all of these users from connecting to QuickBooks at the same time.

THE FINAL WORD

The reality is this – to avoid any unexpected visits by the software police (and remember, a disgruntled employee can make one phone call to make that happen!), simply follow these guidelines:

• Purchase one license for EACH PERSON that will be using QuickBooks. This will keep help you keep everything legit regarding your QuickBooks licensing.
• If you are going to have more than 3 people connecting to QuickBooks at the same time, purchase either the Premier version (which allows up to 5 simultaneous users) or Enterprise version (which allows up to 30 simultaneous users). This covers you when it comes to the "simultaneous access" control feature in QuickBooks software.

Comments about this blog post? Feel free to post them in the box below.

________________________________________________________________________________________________

Comments

[Scott Gregory, QuickBooks Expert]

Hi Woody:

Thank you for the feedback on this article - appreciate it.

Not sure what your experience has been, but I find as much confusion about the multi-seat licensing of QuickBooks as there is about the EULA by itself. If you have any resources that better explain that, I'd be happy to share them.

Good analogy about driving the car for sure!

Scott Gregory

[Woody Adams]

Very good breakdown, Scott, is exactly or near exactly as how I explain it to users. However, you can either buy a unique license for each person using QB or a multi-seat license, it's really about making sure that each unique human being clicking on the QB icon during any time of the license life are covered. I like the driver's license example, where there is one car but all family members need a license (or seat in the license) to drive. And this policy is no different for citrix or RDS, etc. Each different user must have a license or a seat on the multi-user license.

[Neena]

Scott - very informative article. It clears up a lot of the mystery surrounding Quickbooks licenses.
For more specific questions I have found the chat support on the Intuit site to be very helpful.

[Scott Gregory, QuickBooks Expert]

Ted:

I am unsure how the UK version works, but guessing it is similar to the US.

With the US version, you just uninstall via the Control Panel. There is no specific process to "unregister" a copy of QuickBooks.

From there, you'd just install on the new computer as desired.

Hope this helps!

Scott Gregory

[Ted N]

Hi Scott,

I use Quickbooks Pro 2010, its a UK version.

We currently have it installed on two computers, used by one person. However want to uninstall it on one and install it on a new computer. Will I be able to do this? How can I 'unregister' it on the old computer?

Many thanks

Ted

[Donna]

We have a 2 user license, one for me and one for my boss. Can we install it on a laptop as well to take to meetings without purchasing another license? The only two people using this would be me and my boss.

[Scott Gregory, QuickBooks Expert]

Janice:

To answer your question - yes, you have to purchase a license for each computer that will be using QuickBooks.

To save 20% on your QuickBooks purchase, please visit my web site:
http://www.betterbottomline.com/software.shtml

Scott Gregory

[Janice]

My boss just upgraded to quickbooks pro 2012, do we have to purchase the product 4 times for all computers that we are adding it too.

[Scott Gregory, QuickBooks Expert]

Hi Ellen:

As mentioned in this post, I am not an expert on the QuickBooks licensing agreement.

However, based on what you have outlined, it sounds ok to me within the scope of their requirements.

Scott Gregory

[Scott Gregory, QuickBooks Expert]

Geraldine:

If you are using the UK Premier 2010 version, I can't see why it wouldn't upgrade to the UK Premier 2011 version.

As I only work with the US versions, you may want to check in with Intuit on that just to be sure.

Scott Gregory

[geraldine]

i have quickbooks premier 2010 can i upgrade to quickbooks premier 2011 uk version

[Ellen]

Scott - I use Quickbooks Pro 2012 for my business with a single user license. I see that I could install a second copy of the software on a laptop for use at home. I would only want to use the second laptop copy with a company file set up for a nonprofit group I volunteer for. Can I do this? The nonprofit company data file would only be accessed at home on the laptop. There would never be more than one person accessing a company data file at the same time, but there may be more than one person accessing the program at the same time (at home on the laptop working on the nonprofit data file & at the office working on the business data file). Is this OK?

[Scott Gregory, QuickBooks Expert]

Bubba:

You are correct - if you purchase QuickBooks from someone that has already registered it, you are in violation of the Intuit licensing agreement.

The only way you can successfully do that is to get the other person to complete a transfer of asset form with Intuit, and that is typically when a business is sold, etc.

Scott Gregory

[Bubba]

Bare with me here: What are the ramifications of purchasing QB from a 2nd party who has already utilized the purchased edition? I'm told this is not legit, but please clarify if you would. Thanks....

[Graham Delco]

Thanks a lot Scott:

[Scott Gregory, QuickBooks Expert]

Graham:

You'll need to contact QuickBooks directly to resolve your registration problem. They are the only ones that can help at this stage.

Visit www.QuickBooks.com for contact options...

Scott Gregory

[Graham Delco]

I had a problem with registering Quickbooks. 5 computers were already registered but the sixth one has a problem. All other computers that attempted to register has a problem so its not a problem within a computer.

Previously, I can register online by entering the registered email address and other information, but now, it does not go ahead for registration. Instead, it redirects the registration to enter a validation code which should be taken from a quickbooks staff. Since we cannot contact Quickbooks, we cannot register other laptops with Quickbooks. What should I do?

[Scott Gregory, QuickBooks Expert]

Austin:

Indeed, the purchase of 2 user licenses will allow both computers to access your QuickBooks data at the same time, assuming you have the proper networking in place to allow the file to be shared.

Scott Gregory

[Austin]

If we purchase 2 single user licenses, can they be set up to update the same QB file concurrently?

[Scott Gregory, QuickBooks Expert]

Nancy:

If you are purchasing someones' old computer with QuickBooks on it, you are transferring assets from them to you.

If that is the case, to be properly licensed, you (or the previous owner) will need to contact Intuit and arrange for an asset transfer form to be filled out so that you can be shown as the proper owner of the QuickBooks software.

The license stays with the original owner unless you are able to qualify for one of these asset transfers. Otherwise, you have to purchase your own copy of QuickBooks and install it.

Confusing I know...

Scott Gregory

[Nancy]

What would happen if you were to purchase someone's old computer that already has QBs installed or if a family member gave you there old computer that already registered the software and license?...

Please explain? Isn't it one license per computer? So if I now were to own that computer wouldn't the software be mine? What about support if I decided to take that computer? Would I be able to get hel under that license? Could I use it for my own purposes and put in my name? Or am I forced to use my family members name?

I just don't understand?

[Sherrie]

We currently have a 2000 program and it is becoming very slow. When we are doing searches on the memo section, if we are going 2 months back, the search takes a long time. If we are in single user, it goes much faster. Are there any versions that do these type of searches quickly when all 5 users are on a the same time? How about if we are looking for an invoice 4-6 months back?

[Carole D.]

I have a questions. From what I have been reading, as long as it is installed on a server can Quickbooks be accessed by anyone as long as the acesses at one time do not exceed the number of licenses purchased?

[Scott Gregory, QuickBooks Expert]

Hi Troy:

The information you have posted is completely new to me and makes no sense at all.

Your license for 2011 was purchased by you and does not expire if you purchase 2012. You can take the 2011 CD and install it on a computer whenever you like (assuming that is the only computer it is installed on of course) and use the 2011 version of QB as normal. You can also do the same with your 2012 license.

I'm curious who was telling you this information? Also, I'm curious about why this question even came up?

It is true that you can't transfer your license to another business, but that license is yours to use as you like.

Maybe what they were trying to say is that you can't use QB 2011 and QB 2012 on the same data file at the same time. If that is what they meant, that is true. This is only an issue if you have multiple people accessing QB at the same time though, which doesn't sound like it is the case for you.

Please post additional details if you like so we can better understand why this issue came about.

Scott Gregory

[Troy]

Last years license is no longer good if you upgrade. I understand their reasoning on the one license per one individual. I am however confused as why my license from a prior version becomes obsolete when I upgrade. I have the 2011 version of quick books. I assumed I could purchase the 2012 software and use my prior license along with the new license from the new version. WRONG! The 2011 license will not carry over to 2012. Since they are so concerned with users each caring a license it would be nice if the software upgrade wouldn't cause the user to loose all previous licenses only to have to purchase again. Since their license is non transferable I am basically out on using the old license. It would be nice if large mammoth companies like Intuit would care about the thousands of small businesses they short changed.