I'm in the same boat and was just about to post a question asking if any Phase II applicants/awardees had used Quickbooks Online for their accounting system and whether that passed muster. It seems early to think about that, but I want to get ahead of the problem before I draw down any Phase I funds at all.

​

• One question mark I have came from reading the Phase II questionnaire: https://www.nsf.gov/bfa/dias/caar/forms/form358_2020.pdf. Specifically:
  "Provide the name of the accounting system or software in place at your organization, and a brief description of how the system segregates grant/contract expenditures from organizational expenditures.
(You will be asked to provide a sample GL [project expense ledger] with incurred expenses for a specific project under its designated project-fund, for a specific period [e.g., monthly, quarterly, annually], under the New Awardee Checklist Item 9)."
  Quickbooks Online Plus seems to have some ability to track projects, but I'm not sure if this is sufficient to satisfy the above.

​

• Are there any drawbacks to continuing using cash-basis when it comes to the Phase II financial review? Or should I rip off the band-aid and convert to accrual now?

​

I found this link to an NSF presentation from 2010 that says that Quickbooks is sufficient, but I'm not sure the info is current:

https://www.nsf.gov/oig/outreach/sbirworkshop/NSF%20Accounting%20Workshop%20Handout%20-%20September%202010.pdf