For many small and mid-sized businesses, QuickBooks is the preferred accounting software choice for solid reasons. QuickBooks is well-known and easy to use, and it offers the basic functionality that almost any business can use to get off the ground.
Unfortunately, virtually every growing business also soon realizes that the undeniable early value of QuickBooks is soon overtaken by the limitations and required compromises that emerge.
Challenges of QuickBooks:
- Over-reliance on Excel to support financial process and reporting
“After spending over one week shifting through massive spreadsheets, we discovered that we had a calculation error in how we have been recognizing inventory for the past three years!”
“We have to keep Excel spreadsheets for fixed assets ledger and inventory’s overhead calculation.”
- Too many manual data entries
“We need to key in all the customer orders into QuickBooks. Also, we spend many hours manually creating invoices in QuickBooks, and this is at least 3 business days of one bookkeeper.”
- Inadequate controls around financial processes
“You can change the payee names in checks after they are issued. You can change prior transaction history from QuickBooks with one key stroke. Such an easy software to use.”
- Not fit for growing business
“It takes 30 minutes to do a backup of our QuickBooks file. The speed is getting slower and slower. “
The new revenue recognition accounting rule called ASC 606 will become effective on January 1, 2019. ASC 606 is a massive change from the prior GAAP rule. Companies will be required to disclose detailed information about their revenue. You must be able to slice and dice your information to report your revenue.
There is a question if QuickBooks can meet the demands of this new revenue recognition rule.
The New Wave of Financial Management Technology
Previously, when a company outgrew QuickBooks, the options were not appealing. It likely meant spending hundreds of thousands of dollars. But, cloud computing changed everything.
A new generation of cloud-based financial software has entirely changed the dynamics of graduating from QuickBooks. With cloud-based software, your vendor assumes all the information technology cost and risk. All you need is a web browser and an Internet connection – no technology, servers, software, or IT staff. Cloud computing provides numerous advantages that are essential as your business grows.
Please contact any CDH members to review your QuickBooks succession plan.