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Knowing You’ve Outgrown QuickBooks

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Most midmarket ERP software implementations are accomplished with moving off QuickBooks and for the most part, users can plan and execute the transition rapidly. And with the right consultant, the transition can be planned and executed rapidly, but how do you know when it’s time?

For most startups, after one or two years of growth QuickBooks features will not be robust enough, and thus QuickBooks does not compare to other ERP software solutions. Clear signs that it is time to move on are when almost all reporting is done in Excel and QuickBooks is being used as a check writer and for journal entries only (all other ERP processes are being done in disparate systems).

Here are some other signs that you are outgrowing QuickBooks. Most of them involve figuring out where your bottlenecks are in the daily, monthly, and annual accounting cycle:

  • You need a better way to create consolidated financial reports for multiple companies, with the ability to format the reports any way you want.
  • You need to either consolidate companies with multiple currencies into one currency or process multi-currency transactions within one company.
  • There are more than 15 users, and you need to be able to add full access and read-only users as needed.
  • There is a need for audit controls and SOX compliance.
  • You need flexible automated workflow for PO requisitions and vendor invoices.
  • You need to import data from outside systems (i.e., customized billing system, payroll entries, or payments from another system).
  • You need to enter more than a few transactions a month
  • It takes too long to get financials each month
  • It takes too long to bill clients
  • You cannot determine your true cash balance
  • You are spending too much time on duplicate entry of data into multiple systems. 

Sometimes companies insist on hanging on to QuickBooks because they believe that a change would take too long, it’s too expensive or they think they will lose their QuickBooks history if they change to another system. Some have built their internal processes around QuickBooks processes, and although it may be inefficient, people are used to it. Also, they believe that the status quo is fine—until they lose their main QuickBooks user or their data gets corrupted.

The next step is to prioritize your functional requirements—which ones are critical, important, or “would be nice to have.” Then, come up with a ballpark figure for what you are willing to pay for this on a monthly basis and research what systems are available to meet your needs.

Some businesses choose to stay on QuickBooks until the proper staffing within the accounting department allows for change. For the most part, staff must be able to get the day-to-day work done and spend the time to effectively set up a new system. You need at least a few true accounting personnel to run a midmarket accounting system. Traditionally, in QuickBooks environments, companies have all “non-accounting” users.

Preparing for the transition can be easily accomplished in the cloud or on-site, but here are a few tips:

  • Genuinely like and trust the software implementer you decide to work with. Ask for references and check them.
  • Ensure that the data in QuickBooks is accurate. You cannot expect to convert inaccurate data and have it be a good starting point in a new system.
  • Have the proper staff in place on your end.
  • Determine who will be the project manager on your side to use as a point person for the project.
  • Make sure that all staff vacation and time-off schedules are known in order to assist the software implementer in coming up with a project plan. Keep modifying the plan as adjustments come up. This allows for a series of small accomplishments along the way and keeps everyone focused on the goal.

QuickBooks is a common choice for startups, although some may choose otherwise depending on users and functionality. Much of the early on choices do affect long term goals.

Anne-Claire McAllister is president of New York-based Microsoft Dynamics and Acumatica partner Accountnet Inc. The firm focuses on software for ERP, reporting, workflow and procurement with specialties in the nonprofit, financial services, healthcare and the professional services market. McAllister is a member of the Hedge Fund Association and serves on the board of a nonprofit organization.

6 Comments

These are great comments and good to know. Going to a mid-range ERP system is definitely not for everyone. As far as the ERP is dead article is concerned, it seems to really focus on the fact that companies want a subscription model for paying for software services as opposed to paying for it outright. All of the major mid-range ERP software vendors now have subscription based pricing, so I am not sure I agree that ERP, which means Enterprise Resource Planning by the way, is necessarily going away. One of the main points of an ERP system is that it comes with a lot of functionality built-in. For instance, these systems come with a financial report writer and other report writers to access and format the data in a way that companies may want to see it. Many of them come with data import capability as well. You don't need to go to a third party developer. It comes available with the cost of the software. Lastly, what we really see as a major motivating factor in looking at other alternatives to QuickBooks, is the account structure and the ability to generate reports in the way companies want to see their data. Quick Books has a class field that many companies use to track departments. Then we see companies wanting to track additional dimensions such as divisions, locations, projects, profits centers, etc. They try to put all of this information in the class field, and over time, they have a hard time reporting on it. ERP systems have the capability within their chart of accounts structure or within the ability to setup user defined dimensions, to track multiple responsibility centers and to then very easily report on these centers or dimensions, using reporting tools available within the software. It's all a great discussion and educational to everyone! Anne-Claire McAllister

Posted by: ACMcAllister | June 6, 2013 3:29 PM

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Yes, it's true that many people are moving off QuickBooks to mid market ERP systems. Since QuickBooks Enterprise has evolved over the years, Intuit has also seen THE REVERSE TREND. Over the 16 years, I have worked with plenty of ERP consultants migrating clients off QuickBooks. Over the last 5 years, I have also worked with Intuit partners migrating clients from mid-market ERP systems like Sage 100, Syspro, Dynamics GP, etc. to QuickBooks Enterprise. These clients found they could do a lot if not more with QuickBooks Enterprise for a lot less. In this economy, customers are looking to save money and remain competitive and either choose to move UP or DOWN. As the author mentions in the beginning, whatever the decision, it's important for QuickBooks customers to have a competent and experienced ERP consultant they trust to help them with their choice...UP to traditional mid-market ERPs or OVER to QuickBooks Enterprise. With all the add-ons available for QuickBooks Enterprise, it is it's considered an ERP solution, too!

kathy@erpvar.com www.erpvar.com

Posted by: kgraham1 | June 6, 2013 2:06 PM

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http://www.forbes.com/sites/ciocentral/2012/02/09/the-end-of-erp/

Posted by: jwbraswell | June 6, 2013 11:22 AM

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It is ERP software that is struggling to keep up with current trends. There was an article in Forbes last year that said the product is going away.

Posted by: jwbraswell | June 6, 2013 11:20 AM

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Leslie,

I had the same reaction. This post seems like its based on QuickBooks 2010. A lot has changed in the past three years and QuickBooks Enterprise Edition was specifically improved to go up market. Anne-Claire, I'd be happy to have a call to share the updates. In the meantime, here's some updates:

* QuickBooks Enterprise has the ability to consolidate multiple financial statements and use a Crystal report writer tool to format the reports. Chuck Vigeant has built the best one out there: http://www.clearify.com/products/30-QQUBE-Technology/

* QuickBooks can go up to 30 users, not 15.

* You absolutely CAN import data from outside systems. Intuit built an SDK to get access to the database, and a web services tool to allows you to automate a synch with other systems, including billing systems, payroll systems and bill payment systems.

In our outsourced bookkeeping and Controller service we integrate bill.com, insperity payroll, SmartVault and Avalara, among others to automate business processes. (full disclosure we built Insperity Reveal http://reveal.insperity.com using that web services tool). There's a transaction importer that we haven't used but is marketed heavily http://appcenter.intuit.com/transactionproimporter

That's one of the big advantages of QuickBooks. Because they have such a large market share (Intuit says 88%) there are thousands of systems that have been integrated with QuickBooks. You can search all Intuit approved systems at http://marketplace.intuit.com

* There's a full audit trail on every transaction and you can do a "date specific" close prior periods. There's also a big weakness that you can change master file data (e.g. customer and vendor info) that won't get captured in the audit report. Its auditable, but probably not SOX compliant.

* This year (2013)they added batch process capability that makes it really easy to enter a large number of transactions. In Enterprise they use a Sybase version of SQL. We did some load testing of a client with millions of micro transactions and had no latency.

QuickBooks by no means perfect for everyone, and there are lots of reasons why someone would move up to MS Dynamcis, but its not as bad as it was in 2010.

steve sking@growthforce.om www.growthforce.com

Posted by: Sking@growthforce.com | June 6, 2013 9:54 AM

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I don't believe the author knows how robust QuickBooks really is.

Posted by: LESLIEM | June 5, 2013 3:01 PM

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