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Time to Upgrade from a QuickBooks-Based System: The Limitations of Disparate Digital Data Processes

Topics: Advice for SMBs, ERP, Accounting, Taxes, Business Software

Posted on Jun 3, 2014 9:00:00 AM by Macola

QuickBooks and other similar accounting software programs are commonly utilized by small and medium-sized manufacturers and distributors – particularly start-ups – and can often be found paired with Microsoft Excel to manage manufacturing accounting transactions.

As many businesses that begin with QuickBooks and Excel-based accounting systems learn, once a business has some experience behind it, this is no longer the ideal solution for their needs. Growing companies find that utilizing QuickBooks along with other disparate software solutions can slow their business down, creating lots of room for error as they often involve manual duplication and transfer of data from one system to another. For those companies that yearn for the ability to view and automate transactions in real time, across multiple systems and locations, Enterprise Resource Planning (ERP) systems are key.If your company is using a QuickBooks-based manufacturing accounting system, you may be familiar with the following challenges:


  • The limitation of single-segment account numbers

It is true that you can add a class designation to allow more filtering and reporting choices in QuickBooks; however, this only gives the equivalent of a two-segment chart of accounts. Companies that need multiple items displayed individually – such as cost centers, locations, departments or product lines – cannot meet these needs with QuickBooks or other similar accounting systems.

  • Issues with QuickBooks scalability

The most robust offering in QuickBooks allows for 30 concurrent users. Master records cannot exceed 14,500 and include customers, employees and vendors. Retail versions of QuickBooks also include units of measure and other categories in the total record count. It is unlikely that this is enough for a growing business or a growing business planning projects in the future. When these limits are approaching, it is time for a company to begin exploring ERP for greater access and increased capacity.

  • Limited audit trails

Limited audit trails are likely good enough for a young or small business. However, as a business grows, so does the need for more advanced financial information with little question as to the information’s integrity. The design of QuickBooks allows for correcting errors by modifying or removing transactions; however, this is often not a satisfactory system of control when offering financial records for inspection or when seeking loans, merger or other important business actions. ERP systems have more complex audit mechanisms.

QuickBooks and Excel-based systems can serve as a great starting point for a new company, and often the decision to move from QuickBooks to an ERP system can be seemingly daunting. However, if a growing company is to reach its full potential, it is often a necessary decision.



http://www.brainsell.net/blog/tag/quickbooks/, http://www.forbes.com/sites/quickerbettertech/2014/01/06/why-your-company-may-dump-quickbooks-this-year/, http://www.asisucceed.com/quickbooks-compared-with-erp-capabilities/, http://www.accountingtoday.com/accounting-technology/news/Knowing-Youve-Outgrown-QuickBooks67009-1.html

The ERP Blog covers the impact of Enterprise Resource Planning (ERP), business software and accounting solutions on organizations in the manufacturing and distribution industries.

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