Because of its low cost and relative simplicity, QuickBooks is the accounting software of choice for many firms. It is, however, an entry-level accounting system, and growing enterprises quickly learn about the software’s flaws. While many of QuickBooks’ flaws may be worked around with manual workarounds and third-party software, eventually those methods are insufficient, and problems arise that limit growth. For many of these firms, knowing when they need to switch to a new system is the most challenging element.
When Aviva Biology Services, a pioneer in the creation of antibody detection to pinpoint the causes of cancer and degenerative disorders, bought another biotech firm, it realized QuickBooks couldn’t handle its multi-subsidiary needs.
Dyla LLC, the creator of Forto coffee shots and Stur flavor enhancers, discovered that maintaining two different businesses on QuickBooks wasn’t sustainable as the company evolved. Staff were wasting too much time syncing inventories on spreadsheets. The company moved from QuickBooks to NetSuite.
If your company identifies one or more of the indicators below, it’s probably time to upgrade from QuickBooks and implement a comprehensive enterprise resource planning (ERP) system. ERP solutions gather data from across your organization and combine it into a single digital ecosystem. Warehouse management, finance management, customer resource management, and many other corporate tasks are divided down into modules. It doesn’t have to be a painful and disruptive process to switch to an ERP platform. Today’s solutions make it easier for businesses to incorporate certain ERP modules as needed.
12 Signs It’s Time to Get Rid of QuickBooks
1. Manual Processes: The limitations of QuickBooks capability lead accounting departments into intricate workarounds in spreadsheets and a tangle of journal entries, whether it’s revenue recognition or the monthly close. As a result, accountants must manually import data from several systems into QuickBooks or extract data from QuickBooks for analysis. Manual processes are inefficient and prone to error, leaving less time for analysis and value-added work.
2. Because QuickBooks restricts access to the system, essential corporate information is frequently maintained on spreadsheets. Workers then squander time trying to locate the latest and most accurate data by playing “search for the spreadsheet.” Spreadsheets, on the other hand, are vulnerable to manual data entry errors and often have insufficient audit and compliance controls, making them vulnerable to fraud.
3. Several entities: QuickBooks is unable to handle multiple entities directly, resulting in inefficient manual workarounds and hampering organizations looking to expand internationally. Multi-entity consolidation becomes a big resource drain if it isn’t automated.
4. Businesses that develop beyond spreadsheets typically turn to add-on programs to cover gaps in areas like inventory management in order to manage inventory within QuickBooks. Enjoy Life Goods, a manufacturer of allergen-free foods, discovered that as the company grew, QuickBooks and FishBowl for inventory management failed frequently and couldn’t supply the real-time data it required. This is a common issue for businesses who use QuickBooks. They add third-party solutions to fill in gaps in QuickBooks capability, only to discover that the connections aren’t as robust as they claim, data isn’t synchronized, and problems arise during updates. As a result, data is scattered around the business in various systems and spreadsheets.
5. User and storage limits: As a business grows, it quickly outgrows the number of user licenses QuickBooks provides, as well as the amount of storage available. For QuickBooks Pro, the maximum number of concurrent users is three, and for QuickBooks Premier, the maximum number is five. Businesses can add up to ten users to the Desktop Enterprise edition before the price climbs to $30. When the company file size exceeds 1 GB, QuickBooks performance begins to suffer. Businesses that go beyond these restrictions risk experiencing costly and inconvenient system outages.
6. QuickBooks’ limited capabilities and rigid structure hinder businesses from modifying it to meet their specific requirements. Businesses, for example, cannot limit or change who approves a purchase request or the approval procedure.
7. Because of the lack of customization, some businesses are turning to QuickBooks alternatives to adhere to industry best practices such as compliance reporting and audit controls. They discover that QuickBooks does not meet their requirements, requiring them to resort to intricate workarounds, restricting productivity and putting them at danger of noncompliance.
8. In QuickBooks, the more customers, products, revenue, and sales channels a company has, the more difficult it is to extract insights from that data. Data is not updated in real time since it is generally stored in various systems or spreadsheets. Limited reporting capabilities compel accounting to rely on spreadsheets, which are prone to errors and data collection is time-consuming.
9. Month-end closure is tedious and time-consuming because of its limited capability and scope. This puts a lot of pressure on the accounting department to complete the month- and period-end close. Before entering data into QuickBooks and cross-posting transactional data between systems, employees are obliged to track down data from several departments.
10. Sales forecasting and budgeting are based on guessing because QuickBooks is a poor repository for past data, making sales forecasting and budgeting challenging. Employees may resort to making educated — and often wrong — estimates because data for trend analysis exists elsewhere but is too difficult to uncover and extract.
11. Adding new product lines or revenue streams is difficult: When a company undergoes changes, employees must devise workarounds to adapt them. Everyday tasks like making modest modifications across matrix SKUs and adding new sales tax rates aren’t supported by QuickBooks. Processes that beg for automation must be carried out manually or using spreadsheets.
12. Audits are costly and time-consuming: As rules and other compliance standards change, accounting teams who rely on spreadsheets find that preparing for audits is time-consuming and risky. Many firms discover that the audit takes longer than expected and, as a result, is more expensive.
You’re all set to go. What’s the Next Big Thing After QuickBooks?
When people recognize that QuickBooks is holding their firm back, they must assess and choose a more sophisticated alternative, which is often a cloud-based ERP system. Given ERP’s reputation for being best employed with big-scale projects and by major enterprises, this may appear to be a scary prospect for some. Today’s ERP platforms, on the other hand, enable businesses to start small and scale up by incorporating modules like as inventory management, customer relationship management (CRM), financial management, and human capital management.
For example, NetSuite developed the SuiteSuccess technique to help firms get up and running with ERP in 100 days or fewer. Financials First focuses on core financial management, with pre-configured reports and dashboards for jobs such as controller and CFO. Companies can gradually increase their use of the software once it is in place.
With a thorough ERP system in place, firms can automate time-consuming manual operations, freeing up employees to focus on analysis and duties that increase revenues. Drill-down capabilities are included in the reports created by the platforms, and they provide insights into the entire business spanning financial, sales, employee, customer, and product data. When you compare QuickBooks to an ERP platform, you’ll see that the latter eliminates the requirement for several point solutions and failed integrations. Its user-friendly and adaptable customization platform allows clients to tailor the system to their own requirements while also incorporating industry best practices.
Choosing how and when to leave QuickBooks might be a difficult task. Some businesses begin with an ERP system, but for the most part, it’s a question of recognizing when and how QuickBooks is preventing them from expanding into new markets and opportunities. Any one of the signals listed above could be enough to convince you to make the change. Many people regret not switching away from QuickBooks sooner. Others switch from QuickBooks to another interim solution only to discover that it no longer meets their demands, leading them to upgrade to a full ERP suite once more. For organizations that have outgrown QuickBooks, ERP platforms are now more accessible than ever.
Outgrowing QuickBooks: Frequently Asked Questions
When it comes to QuickBooks, how big is too big?
There is no hard and fast rule based on revenue or employee count, but firms who rely on spreadsheets for fundamental accounting, have over 500 SKUs in inventory, or want to expand into new channels, locations, or items would require a more comprehensive system than QuickBooks. Companies that rely on stand-alone programs to plug holes in their operations, such as inventory management, are likely ready for an ERP system.
What’s the next logical step after QuickBooks?
While there is financial management software that provides additional accounting functions, most firms that are upgrading from QuickBooks choose cloud-based ERP systems that provide essential accounting features that scale with the company as it grows.
Is QuickBooks used by huge businesses?
No, QuickBooks is primarily used by small firms that do not require extensive reporting or accounting.
Is QuickBooks suitable for a small or medium-sized business?
QuickBooks is adequate for a company with an accounting department of no more than five personnel. QuickBooks may not be ideal for some small accounting departments due to additional difficulties such as the necessity for inventory management or more advanced reporting.
