The Most Common Indicators That You’ve Outgrown QuickBooks
- The Most Common Indicators That You’ve Outgrown QuickBooks
- The Problem with QuickBooks
- What Happens When You Outgrow QuickBooks?
- FAQs About Outgrowing QuickBooks
1- Your Financials Are a Mess
If everything seems to take longer than it should, such as entering transactions, making bills, pulling financial statements, revenue recognition, etc., there’s a good chance you’ve outgrown QuickBooks Enterprise a long time ago.
You might also notice you’re having trouble getting adequate visibility on data, or that you base your sales forecasting and budgeting on educated guesses rather than decisions supported by relevant data.
Other signs that your financials are taking a hit with QuickBooks could be difficulty in adding new product lines or revenue streams and financial audits that are costly and time-consuming.
2- You’re Entering Duplicate Data into Multiple Systems
QuickBooks has one function: being a financial accounting software. This means your business probably uses spreadsheets and other tools to manage other crucial processes, like keeping track of the inventory.
Entering data into multiple systems comes at a cost – the risk for human errors becomes much greater and can cause issues company-wide. Moreover, the disconnect between the different tools makes it difficult to generate reports and, therefore, make data-based decisions.
3- There Are More Users Than QuickBooks Can Support
QuickBooks Online can only support 30 users. With such a low user capacity, you may be stuck trying to share access between multiple people, which is highly frustrating and inconvenient. As you may have understood, this software is used by small companies and small business owners.
If you are looking to expand your business and want a higher rate of your employees using cloud solutions, QuickBooks will hold you back from achieving that goal. QuickBooks isn’t the best solution for fast-growing companies; you could quickly find yourself blocked in your business development because of an inadequate tool. Instead, you may want to consider implementing an ERP solution that’s right for your industry, such as Oracle NetSuite, FinancialForce, Sage Intacct, Microsoft Dynamics 365 or Rootstock, with the help of expert consultants, like Big Bang’s.
4- Your Company Now Has Multiple Entities
When your business is no longer operating on one legal account and has grown into a multiple-entities firm, it can become increasingly hard to continue using QuickBooks Enterprise to create accurate reports, whether for inventory or financial consolidations.
Following expansion, your entities will start buying and selling to each other, exchanging contacts, requiring roll-up consolidation in a parent company, etc. Unfortunately, QuickBooks does not support automatic intercompany transactions or intercompany rollup consolidations. Oftentimes for that reason, companies will maintain different accounts for each entity, which is not the best way to streamline a business.
5- Your ERP Requirements Extend Well Beyond Accounting
When your company grows, your number of departments may also expand – this means you’ll need a tool that can help you manage them all in a coherent and streamlined fashion. While QuickBooks can be a great beginner tool for managing your finances, you’ll soon find it lacks crucial pieces of reporting outside of accounting data, which will prevent your business from performing at the best of its capacity.
If you are managing your finances in the cloud through QuickBooks, but still struggling with manual processes pertaining to, for example, supply chain, operations, commerce, reporting, manufacturing, human resources, etc., this can be a sign it’s time to move on and adapt your cloud solution to your growing business needs.
The Problem with QuickBooks
While it is an inexpensive and easily accessible accounting system for small and medium businesses (SMB), QuickBooks has apparent flaws. In fact, it lacks many of the essential functionalities (such as inventory management, customer relationship management (CRM), financial management and human capital management (HCM)) and automation crucial to growing businesses, that wish to streamline their financial activities.
For starters, in QuickBooks, you cannot work with complex financial data containing several variables. Additionally, many of the intricate financial management functions required to support a company’s growth (such as resource management, thorough reporting, tracking, advanced cash flow management and analysis, etc.) are not achievable in the software. As stated prior, the limited number of user licenses allowed on the platform can also be a major drawback in the expansion process of the entire organization.
The primary functions found in QuickBooks are accounting-related and truly limited in scope. For example, if one of your goals is to properly digitize your business, you would need to add complementary business management software to your existing one in order to achieve your objective. This means more integrations, more systems to learn and be trained on, the added risk of human error, loss of control over your data, etc. Moreover, the inability to customize QuickBooks directly makes it all the more difficult to adapt and tailor your accounting solution to your specific needs.
What Happens When You Outgrow QuickBooks?
All hell breaks loose! No – not literally – but it will cause you unnecessary grief. Using an outdated system, while your business requires more streamlined operations, can lead to high levels of frustration and loss of profits. When your company becomes more and more reliant on the cloud each day and realizes that your current software cannot support the evolution of your business, managing it and making sure it operates appropriately will become increasingly difficult.
Not only will it be challenging to operate, but it will also, without a doubt, affect overall productivity and work environment. You’ll feel your staff getting increasingly frustrated, namely due to the stunt of growth opportunities, which may even result in losing key people within the organization.
No one likes to work with a system that no longer supports and benefits their day-to-day productivity and motivation at work.
When you outgrow QuickBooks, another side effect involves arduous and time-consuming close of months due to a lack of data visibility. The accounting department’s workload is increased – employees have no choice but to collect data from several departments before entering it into QuickBooks and cross-posting transactional data between platforms.
All that extra work could be avoided with software that supports your operational needs.
FAQs About Outgrowing QuickBooks
How large is too large for QuickBooks?
QuickBooks will only support a maximum of 30 users. That means that as the number of users in your company grows and gets close to the limit, you’ll notice QuickBooks will rapidly become lackluster, and its drawbacks will become increasingly apparent.
We, however, suggest you start researching other business accounting software products before reaching that point. Trying to operate QuickBooks with an overload of users will slow the system down and affect productivity. Better safe than sorry!
Do large corporations use QuickBooks?
Larger companies tend to gravitate towards more complex cloud-based systems, with advanced reporting capabilities and a much lesser need for manual processes, like an ERP. QuickBooks is not robust enough to handle significant amounts of financial data or provide large businesses with the financial visibility they need, nor is it built to perform large-scale financial reports.
QuickBooks is appropriate for what size business?
QuickBooks Enterprise is most suitable for small to medium-sized businesses with fewer reporting and data visibility needs and fewer financial and human resources.
What is the next logical step after QuickBooks?
The next logical step would be to consider switching to higher-performing software, such as an ERP. Unlike QuickBooks, an ERP is a centralized system that links each process through a common platform. Switching over to an ERP on the cloud will allow for more flexibility – here’s how:
- An ERP system is an integrated management software that will automate some of the most essential elements of your business processes, including sales, marketing, product planning and development, and payroll, for better workplace efficiency.
- As a cloud solution, an ERP platform streamlines the sharing of critical data, in real-time, across business units, from anywhere with an internet connection.
- An ERP will allow you to eliminate tedious manual processes, and provide accurate ROI in real-time and reporting visibility with cumulative data available in one system.
- Finally, empower your remote workforce with secure access to information anywhere in the world—no need to be tied to a legacy system and no more time-consuming hardware upgrades.
If you feel the time is right to make a change for your business, we suggest taking one of our free assessments to see where your business stacks up and determine which solution would be best suited for your needs.