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.

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Comments

[D]

It looks like Intuit want it both ways. You are allowed a maximun of 5 concurrent users, but you must purchase for the number of users that may use Quickbooks.

You right, I don't read the EULA, as it ussually contains a dozen pages of legalize, and requires you to hand over your first born.

With Terminal and Cloud Services, these agreements are unworkable, and companies need to move to concurrency (you license for the maximun number of users that will ever be using the software at one time).

Most of us are not worried about the software police, and you can place me in this group that can sleep easily at night, when we purchase software based on concurrency, and ignore the fine print in the EULA. Scott, I think you are in the small minority on this one.

[Woody Adams]

Hey Scott, good stuff. Here is how I see it all. Simultaneous use is irrelevant. Terminal server is irrelevant. Hosting QB is irerlevant. In the end, all I need to know is how many unique human beings are going to click on the QB icon during the life of the license ownership. This # equals how many licenses or seats on the firm license I need. For i.e., there are 5 people who access QB. They have QB Pro 2011. Though only 3 of them can be in the same data file at one time, they still need to pay for all 5 people using QB. The one user license allows for installation on a dekstop and a laptop computer, that is it. A multi-seat license allows for installation onto the same # of computers as # of seats on the license. Now if one employee leaves, and a new one arrives, that new employee can take over the old employees seat.

[Scott Gregory, QuickBooks Expert]

Jim:

I'm curious - are you purchasing a US or UK version of QuickBooks?

Scott Gregory

[Jim]

Scott,
Thanks for the observations. I'm buying QB Pro 2011 right now, and can't believe the following statement in the License, "Intuit is a global company and may access or store personal information in multiple countries, including countries outside of the European Union that may be deemed to have inadequate protections. When you agree to these this (sic) Agreement, you agree to this practice." If this was presented to me personally (instead of for my employer), it would be DOA (dead on arrival), since I would not knowingly allow my personal info to be stored in countries 'deemed to have inadequate protections.' I will be shopping for an alternative, since accepting this is a very unreasonable requirement!

[Scott Gregory, QuickBooks Expert]

Hi Wes:

A couple of thoughts to hopefully help clarify:

1) QB Premier is not sold in 5 user packages, no matter where you get it. You'd have to get a 3 user and 2 user package in order to get to the 5 licenses of Premier you mention. I'll assume that is what has happened to this point.

2) If in fact you do have these 5 licenses, I don't see the need to purchase any additional licenses. These 5 licenses will allow you to install QB on 5 computers and allow those 5 people to access a QB data file at the same time, which I'm guessing you are trying to do.

I can't speak to the specifics of the conversation you had with the rep from Intuit, but it sounds to me like they were mistaken.

The licensing and functionality is/has been the same in the Pro and Premier packages for years. The only ringer was the new change this year with Pro only that you can only have 3 people in a data file at once - no more than that. With Premier, you have always had the ability to have up to 5.

Does this help?

Scott Gregory

[Wes]

One thing that is not clear in regard to Intuit's definition of a license is "simultaneous" access. I interpret that to mean more than one user accessing the database concurrently, not separately. Apparently Intuit interprets a license as the ability to access the company data file, but not simultaneously.

I recently purchased Quickbooks Premiere Manufacturing and Wholesale Edition 2011 for a client who expected to have 5 concurrent licenses as it is advertised on the retail package. After a call to Intuit, I was informed that we do have up to 5 users aloowed to access the data file, butI would have to purchase an additional license for simultaneous access for each user at a cost of $350. I bought the product from Amazon for $270.

Needless to say, the owner of the business was pretty upset when this infpormation came to light. He had previously been Using Quickbooks Pro and was already accustomed to having SIMULTANEOUS multi-user access. Arguing with Sanjay proved to be futile.

My questions are: Why is Intuit now charging for simultaneous access for the Premiere Edition of their product? Can I just purchase another shrink wrapped retail package for Amazon to obtain the additional license and save $80, or are we going to be forced into purchasing the license through the Quickbooks licensing wizard?

[Scott Gregory, QuickBooks Expert]

Hi Sam:

Thanks very much for taking the time to offer your feedback on my QuickBooks blog – I appreciate you stopping by, even if it was by accident :)

Scott Gregory

[Sam M]

Thanks for the info Scott!

While I wasn't looking for info on this particular subject, you presented your information clearly, and it was an informative and enjoyable read.

Just wanted to say it since no one else has (on this post anyway)

-Sam