QuickBooks is a widely used accounting software that helps with the most basic of accounting tasks. While QuickBooks may fulfil your accounting needs today, this doesn’t necessarily mean that your business can rely on it forever to provide the right accounting tools and functions.
Your business has evolved over time. It started with a few employees, a little bit of sales revenue, and some customer accounts. You’ve added some products here and there, reinvested some money into the company, and now you have close to 100 employees. In addition, you have thousands of products offered to thousands of customers. As you can see then, the environment is very different from when your company was smaller. However, your core software is still QuickBooks.
QuickBooks may do the job in an accounting or finance department, but it is not enterprise resource planning (ERP) software. ERP is a business management solution that encompasses multiple functional areas of a company and its data, such as accounting and finance. Business processes are related between these related systems, which means they can be streamlined and easily analysed–if a company’s processes have outgrown QuickBooks.
The four main ways in which QuickBooks is lacking is inventory management, integrations, reporting and business growth.
Inventory
QuickBooks is not well suited for inventory management. The more complex your business becomes, the more important this issue becomes. While handling the day-to-day tasks of running a small business, it’s easy to lose track of what’s happening in the background and that’s where QuickBooks falls down. As a growing business, you’ll need to record different kinds of information on multiple systems and then reconcile the results between them after your financials have been closed. You’ll need to adjust your inventory numbers as orders come in, or when products are returned.
Integrations
Issues associated with QuickBooks integration are not new. In fact, nearly every corner of the market has been impacted by this challenge. Several companies and industry associations have spent considerable time and effort trying to improve QuickBooks’ limitations. Yet, when you talk about data interchange between applications, the conversation often comes back to an assessment of how well QuickBooks integrates with other systems.
Because QuickBooks lacks functionality in integration, employees must navigate across several applications to verify data, which reduces their productivity. Also, data is scattered across applications, which leads to retrieval issues.
Without integration, your QuickBooks data is spread across multiple applications. There’s no place to get the whole story, and everyone in your company must piece together small parts instead.
Everyone works best with the right tools, but when one set of tools is scattered across several applications and no central location for data analysis, your business suffers.
Reporting
If you’re using QuickBooks to report on your business performance, you’re probably missing key information. Reporting in QuickBooks is limited, and the format doesn’t allow for reporting capabilities like dashboards or complex data segmentation.
While QuickBooks provides basic reporting that works well enough for many businesses, it’s not adequate for advanced accounts. As data grows more complex and customers require more granular reporting for regulatory compliance, you may be forced to hire a costly consultant to provide third-party reports or export large amounts of data to an outside vendor.
Because QuickBooks lacks full functionality, you must sacrifice time and resources re-entering invoices, collecting data for reports manually, and updating stock turnover and other data. This makes it difficult to access and manipulate crucial business data.
QuickBooks can often lack reporting capabilities that meet your unique needs and help you communicate better with customers.
Business growth
If you find your company growing, QuickBooks becomes extremely limited. And this is definitely not a good thing. The system performance slows to a crawl. You can’t enter critical data on time, so reporting quickly becomes an afterthought.
If you use QuickBooks, a message box might pop up saying that “QuickBooks is busy processing transactions.” This means it has froze while your business was trying to run a report or enter transactions in the middle of a day-to-day operation. Bad performance is not merely annoying — it can stunt your company’s growth. A study by Aberdeen Group showed that 40% of businesses migrate to new software because of slowness, crashes, and other system-related problems.
QuickBooks is only as powerful as the industries it applies to. In some cases, a system is needed that not only handles the traditional business functions of accounting, but also offers specialized features to satisfy needs unique to an industry.
There are certain industries that require a customized system for managing clients, sales, and financials, such as manufacturing, distribution, life sciences, and food and beverage. Because QuickBooks cannot accommodate these industries, the software is not scalable for a growing business.
Summary
At one point or another, most businesses will reach the limit with the software. While its capabilities allow for an enormous amount of flexibility to start up a business, there comes a time when the one-size-fits-all approach isn’t a good fit anymore.
QuickBooks may do the job in an accounting or finance department, but it is not enterprise resource planning (ERP) software. ERP is a business management solution that encompasses multiple functional areas of a company and its data, such as accounting and finance. Business processes are related between these related systems, which means they can be streamlined and easily analysed.
Download the Signum guide ‘Tell-tale signs you have outgrown your accounting system’ to help you decide if it’s time to move on to ERP
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