Collaboration with Kristy Barber, Third Stage Consulting
Change is hard. It is difficult enough when switching to a new ERP from an old one but can be even more of a tumultuous journey when leaving your QuickBooks environment and implementing an ERP for the very first time.
We talk to companies on a daily basis who are holding onto QuickBooks as if their life depended on it. And these are not all small companies. We see $20 million, $30 million and even $50 million-dollar organizations, some fairly complex and owned by private equity firms, still running on QuickBooks.
Like a kid learning to swim, as scary as it is it needs to be done. There is absolute risk involved, but the rewards of one of the top ERP systems can take your business to the next level.
The excuses we hear for holding onto QuickBooks include:
- QuickBooks has been working for us, so we have no need to change
- My accounting team and I are comfortable and know how to use QuickBooks
- QuickBooks is simple
- We have built a library of bolt-on products that do pretty much what we need (i.e. some integrate to QB, some do not)
- We have too much going on to worry about changing
While each of these excuses could be valid reasons for hanging onto QuickBooks in certain scenarios, here are some reasons why it may be time for a change:
QuickBooks is NOT an ERP System
Few people argue with this comment as QuickBooks is known as one of the leading accounting systems for small business. What many people don’t realize, however, is that simply building modules around QuickBooks does not necessarily constitute a functioning ERP either.
While QuickBooks will integrate with many systems, it is extremely limited in what it can do with the data it receives and it becomes very manual and risky to manipulate. Below are some sample situations that would suggest it is time to look beyond QuickBooks:
- You are always having to export data to excel and manipulate your reports/models because the software does not have the functionality.
- Your inventory, supply chain management or manufacturing processes are growing, so you don’t have the ability to track job costing, lots, serialization, etc. without difficulty and manual effort.
- If you are shipping items, QuickBooks does not get updated real time (when using desktop). It requires a manual entry so you know an item has shipped. This becomes difficult to grow a sales team without real-time access to inventory.
- You have a lot of manual entry. While there are bolt-on options like Vic.ai and Bill.com to help with A/P or the ability to bring in your bank and credit card feeds, a lot of manual entry is still required. As you grow, you will also need to continue hiring.
- You have multiple locations and need everyone to be in the same system. While QuickBooks Enterprise does allow for multi-users to some degree, managing shared inventory or customers becomes painful.
- You are looking to grow beyond 30 users, which is the maximum for the most robust version of QuickBooks. Other versions allow for 5 simultaneous users, which could become an issue for a growing business.
QuickBooks is limiting your access to information and control over your business
Making quick decisions as your business grows is critical, and QuickBooks is not designed for this. As you grow, your sources of data also grow and access to consolidated information needed to make decisions becomes difficult.
As information becomes difficult to share or acquire, market pressures cause people to make rash decisions based on whatever information they do have, which puts your business at risk. Small business systems such as Oracle NetSuite and a variety of others can help your company scale for growth.
QuickBooks may be siloing your company
Since QuickBooks is limited to financials and accounting, other areas of the business are forced to find their own solutions. This may be fine for a while, but as you grow and become more dispersed in your operations the risk of siloing increases. You may find increasing use of spreadsheets, standalone systems or other short-cuts that seemingly help one area of the business but hinder others.
QuickBooks is not a leading technology
The immediate reaction to this comment by businesses hanging on to QuickBooks is “we don’t need leading technology.” This may or may not be true, but before jumping to this conclusion consider a few facts:
- Gaining market share for most small businesses is a daunting task.
- According to an IDC study published in Forbes, “There is a clear connection between digital transformation and revenue growth.”
- Technology levels the playing field for small business versus large corporations, and many SMB leaders cite their combination of size and flexible use of technology as an advantage over larger companies who take longer to adapt to new technology.
- Data and access to data is becoming an absolute must in business today. QuickBooks does not work well in the world of data access, analytics or internet of things.
Given these points, it may be worth reconsidering the importance of newer, more powerful technology.
All the above points can be summarized under this one simple concept. Consider what you are leaving on the table by sticking to an inferior product. Could new business technology help you create a competitive edge?
Manual processes take time away from proactive business initiatives. Lack of automation limits your growth and leaves you behind the competition, while ignoring signs of trouble may signal a plateauing or declining business. Waiting until the “right time” is no longer a realistic goal when technology and business are moving so quickly.
On top of this, consider the current business environment and global recession. Change is coming fast and hard. Things like stressed supply chains and mobile demands are putting even the most stable businesses in a state of chaos. If you are thinking you will just wait around to see what happens, think again.
QuickBooks will remain a staple for small and simple business models, but if you are starting to see any stress cracks, it may be time to consider letting go. Feel free to contact us to brainstorm ideas on how you might replace QuickBooks – we are happy to be a sounding board as you continue your digitization journey!