QuickBooks is the entry into accounting software for many businesses, thanks to its low price point and relative simplicity. However, it is an entry-level accounting system, and growing businesses quickly come to understand the shortcomings of the software. While many of QuickBooks’ shortcomings can be overcome with manual workarounds and complementary software, eventually those steps are not enough, and problems emerge that begin to stifle growth. The difficult part for many of these businesses is determining when they need to move to a new system.
If your business recognizes one or more of the following signs, it’s probably time for you to move on from QuickBooks and grow your organization with a comprehensive enterprise resource planning (ERP) system. ERP systems collect business information from around your company and integrate it into one digital ecosystem. Separate business functions are broken down into modules, including warehouse management, finance management, customer resource management, and much more. Moving to an ERP platform needn’t be a disruptive and painful process. Today’s systems allow companies to more easily add specific ERP modules as they need them.
12 Signs That You're Outgrowing QuickBooks
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Manual Processes
Whether it’s revenue recognition or the monthly close, the limits of QuickBooks functionality force accounting departments into complex workarounds in spreadsheets and a morass of journal entries. This leaves accountants gathering data from disparate systems and manually entering it into QuickBooks or pulling data out of QuickBooks for analysis. The cumbersome manual processes are prone to error and leave less time for analysis and work that brings value.
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Spreadsheet Overload
Because QuickBooks limits access to the system, vital company data is often stored on spreadsheets. Workers then waste time playing “hunt for the spreadsheet” trying to find the most recent and accurate data. Meanwhile, spreadsheets are at risk of manual data entry errors and typically have weak audit and compliance controls, introducing the risk of fraud.
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Multiple Entities
QuickBooks offers limited ways to manage multiple entities, with different capabilities depending on the product. QuickBooks Online allows multiple companies under one login, but each company requires a separate subscription. Still, the platform lacks a full multi-entity ledger with native consolidated reporting across entities. QuickBooks Desktop Enterprise can combine a limited set of reports—such as P&Ls and balance sheets—but only under aligned charts of accounts. Rather than providing real-time consolidation, combined reports must be exported to Excel. Other Intuit solutions may support multi-entity management after additional setup and configuration, but outcomes vary in terms of accuracy and automation. As companies scale, these limitations increase manual effort and introduce data inconsistencies, complicating data governance and draining resources.
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Disparate Tools and Data
In order to manage inventory within QuickBooks, businesses that grow beyond spreadsheets often turn to add-on applications to fill gaps in areas like inventory management. For example, Enjoy Life Foods, a maker of allergen-free foods, found as it grew QuickBooks and FishBowl for inventory management crashed regularly and couldn’t provide the real-time information it needed. This is a frequent problem for companies running QuickBooks. They add on third-party solutions to patch holes in QuickBooks functionality only to find that the integrations aren’t as robust as advertised, data doesn’t sync, and issues arrive during upgrades. That leaves data spread in different systems and spreadsheets across the organization.
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User and Storage Limits
Growing businesses may quickly exceed QuickBooks’ user cap or run up against storage limits. QuickBooks Online caps users at 25 per entity, even at its highest tier, while QuickBooks Desktop Enterprise supports up to 40 simultaneous users. However, QuickBooks Desktop performance diminishes as the company file size increases; businesses exceeding these limits risk costly and disruptive system outages.
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Lack of Customization
QuickBooks limited functionality and rigid structure prevent businesses from customizing it to fit their unique needs. For example, businesses can’t limit or change who approves a purchase request or the process for approval.
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Absence of Best Practices
That lack of customization has some companies looking to QuickBooks alternatives to follow industry best practices, such as compliance reporting and audit controls. Many find that QuickBooks can’t fit their needs, once again forcing them into complex workarounds that impact efficiency and put them at risk of noncompliance.
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Lack of Visibility
The more customers, products, revenue, and sales channels a business has, the more difficult it is to gain insights from that data in QuickBooks. Because information is often stored in separate systems or spreadsheets, data is not updated in real time. Limited reporting capabilities force accounting to turn to spreadsheets, which are error-prone, and gathering data is labor-intensive.
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Tedious Month-End Close
Limited functionality and scope create a heavy workload for the accounting department conducting the month- and period-end close. Staff is forced to track down data from different departments before entering it into QuickBooks, then cross-posting transactional data between systems.
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Guesswork in Sales Forecasting and Budgeting
QuickBooks Online now offers forecasting and budgeting tools, but data management remains a significant challenge. Inconsistent data across records makes extracting information a time-consuming, manual effort, decreasing the quality and reach of historical trend analysis. Without standardized and organized data, employees may be tempted to fill forecast and budget gaps with educated guesses—even if the information exists in a hidden location.
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Difficulty Adding New Product Lines or Revenue Streams
Every time there are changes in a business, staff have to accommodate them with workarounds. QuickBooks doesn’t have built-in support for everyday functions like making simple changes across matrix SKUs and adding new sales tax rates. Processes that cry out for automation have to be done manually or from spreadsheets.
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Expensive and Burdensome Audits
As regulations and other compliance standards evolve, accounting teams that have to rely on spreadsheets discover preparing for audits is time-consuming and subject to risk. When the audit is conducted, many businesses find it takes longer than expected and is therefore more expensive.
You’re Ready to Move On. What’s the Next Step Up From QuickBooks?
Aviva Biology Services—a pioneer in the development of antibody detection to determine causes of cancer and degenerative diseases—realized QuickBooks couldn’t meet its multisubsidiary needs when it acquired another biotech firm.
Similarly, Dyla LLC, maker of Forto coffee shots and Stur flavor enhancers, noticed running two separate businesses on QuickBooks wasn’t sustainable as it grew. Staff were spending too much time in spreadsheets synchronizing inventory. The manufacturer switched from QuickBooks to NetSuite.
Once people realize that QuickBooks is holding the company back, the next step is to evaluate and select a more powerful option—one of the most common solutions is a cloud-based ERP system. This can sound like a daunting prospect for some, given ERP’s reputation for being best used with large-scale projects and by large companies. However, today’s ERP platforms allow companies to start small and add functionality as they grow by incorporating modules like inventory management, customer relationship management (CRM), financial management, and human capital management.
NetSuite, for example, has created the SuiteSuccess methodology to get businesses up and running on ERP in 100 days or less. The Financials First solution focuses on core financial management with preconfigured reports and dashboards for roles like controller and CFO. Once in place, companies can expand their use of the software at their own pace.
With a comprehensive ERP system in place, businesses can ditch onerous manual processes in favor of automation, freeing up staff for analysis and tasks that grow profits. Reports generated from the platforms include drill-down capabilities and they deliver insights into the entire organization across financial, sales, employee, customer, and product data. When you evaluate QuickBooks against an ERP solution, you’ll see that an ERP platform eliminates the need for multiple point solutions and integrations that fail. Its intuitive and flexible customization platform lets customers adapt the system to their unique needs while offering industry-leading practices baked in.
Determining how and when to move off of QuickBooks can be daunting. Some businesses launch their company on an ERP system, but for most it becomes a matter of determining when and how QuickBooks is holding them back from growth and new opportunities and markets. Any one of the above signs can be reason enough to make the move. Many find that they wish they had moved off of QuickBooks earlier. Others move from QuickBooks to another interim solution only to discover later that the new solution still doesn’t fit their needs, forcing them, once again, to upgrade to a full ERP suite. ERP platforms today are more accessible than ever for businesses that have outgrown QuickBooks.
FAQs About Outgrowing QuickBooks
How big is too big for QuickBooks?
There’s no hard and fast rule based on revenue or employees, but businesses that find themselves reliant on spreadsheets to conduct core accounting, have reached over 500 SKUs in inventory, or are hoping to add new channels, geographies, or products find they need a more comprehensive system than QuickBooks. Companies that look to standalone applications to fill gaps like inventory management are probably ready for an ERP solution.
What is the next step up from QuickBooks?
For businesses using QuickBooks Desktop Enterprise, Intuit Enterprise Suite offers a cloud-based step up. It shares much of QuickBooks Online’s interface and functionality, adding the ability to consolidate financials across multiple entities. However, setup and configuration typically fall to the customer, leading to varied results. On-premises systems often face scaling hurdles and require significant IT expertise to maintain and upgrade. This is why many growing businesses move to cloud-based ERP systems—especially those that require core accounting features alongside modules for inventory, CRM, and more.
Do big companies use QuickBooks?
No, QuickBooks is typically reserved for small businesses that don’t need advanced reporting or accounting. Despite improvements to user permissions and security, QuickBooks Online lacks many of the capabilities public companies need to stay compliant with complex accounting rules.
What size company is QuickBooks good for?
QuickBooks is sufficient for a business with up to five people in its accounting department. Additional complexities, such as a need for inventory management or more advanced reporting, can mean QuickBooks may not be right for some with small accounting departments.
