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embark 7 signs you_ve outgrown Quickbooks and what to do about it_v2-05 (2)

Graduating from the small business ranks can be both exhilarating and a huge pain. Yes, revenue growth and expansion are badges of honor, and we absolutely applaud you. But applause won't help you run your operations more efficiently, close your books more quickly, or integrate automation for those manual, error-prone processes eating you alive.

Like it or not, this is where businesses just like yours start realizing they're outgrowing Quickbooks, an operational rite of passage if there ever was one. Before you start looking beyond a mere accounting system and plunge headfirst into the ERP pool, however, you want to make sure your business processes and operations actually warrant such a significant move. So, let’s take a look at seven of the more common signs you've outgrown Quickbooks to see if anything strikes a nerve.

1. Drowning in Spreadsheets

What began as a simple solution – maybe QuickBooks Desktop and a few individual spreadsheets – might now be hindering your growing company's financial management and future viability. As data volume and complexity increase, Excel can actually create new challenges for your financial reporting, accounting, and finance folk:

  • Data Fragmentation: Invoices, statements, and reports reside in separate spreadsheets, requiring manual consolidation and reconciliation. This patchwork approach makes it difficult for CFOs to gain a holistic view of their finances and hinders informed decision-making, particularly when managing multiple entities.
  • Manual Data Entry: Essential tasks like expense reporting and inventory tracking involve repetitive data entry across multiple spreadsheets. This not only consumes valuable time but also increases the risk of errors and inconsistencies.
  • Data Duplication: Similar data points might exist in different spreadsheets, leading to discrepancies and potential errors. Reconciling these discrepancies consumes – once again – valuable time and resources, further slowing down your team.
  • Limited Functionality: As your business evolves, complex tasks like multi-currency transactions or advanced inventory management might exceed QuickBooks' capabilities. Spreadsheets then become necessary to fill the gaps, creating a system vulnerable to errors and inefficiencies.

Long story short – you end up in a vicious cycle, where more data necessitates more spreadsheets, leading to even greater complexity and the need for additional manual work – a toxic, inefficient circle of life if there ever was one. Ultimately, your finance team might struggle to keep pace with your business's growth, spending more time on tedious tasks rather than working magic with strategic analysis and insights.

2. User Overload

During the startup phase, many businesses find that QuickBooks Pro offers a sufficient and cost-effective accounting solution. However, as operations expand, limitations can quickly rear their ugly head. At some point, startups transitioning to mid-sized businesses require more robust systems to accommodate increased user demand, all without sacrificing performance or access.

QuickBooks' Crowded Room

  • Restrictive access: Unlike large-scale ERP systems, QuickBooks typically offers limited user licenses, ranging from 1 to 30 users. This can become problematic for growing teams, forcing individuals to wait for access or use workarounds like shared logins.
  • Growth bottleneck: As your team size increases, adding new users within QuickBooks becomes a challenge due to the user cap, limiting your ability to scale operations efficiently.

The Impact of User Overload

  • Collaboration roadblocks: Limited access for a larger team impacts collaboration and information sharing. Team members waiting for access or using workarounds might miss crucial updates or struggle to share data efficiently, potentially affecting project progress and decision-making.
  • Operational delays: Essential tasks like data entry, reporting, and approvals might get delayed due to user access limitations, impeding overall team efficiency and responsiveness while also slowing down your business operations.

Ultimately, a successful team deserves a system that can accommodate its needs. Thus, evaluating alternative solutions beyond QuickBooks might be crucial to unlocking your team's true potential and paving the way for smooth, efficient growth.

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3. Complex Reporting Headaches

Once good enough for financial insights, QuickBooks eventually shows its limitations as your need for comprehensive financial reporting grows. For businesses scaling up, these reporting shortcomings often drive the need for more capable ERP software. Without a more robust solution, your reporting and decision-making can't evolve in lock-step with your operations.

Limited Reporting Capability

  • Static snapshots: Unlike dynamic dashboards, QuickBooks' reporting primarily offers static snapshots of data, making it difficult to identify trends and track progress over time. Of course, this limits your ability to make informed decisions based on evolving financial trends.
  • Drilling down dilemmas: Extracting specific details often requires complex workarounds or manual manipulations with Quickbooks, wasting valuable time and preventing you from gaining granular insights and transforming them into key financial metrics.
  • Strategic insights lacking: Once again, incomplete or limited data impedes strategic decision-making. Robust reporting is crucial for uncovering opportunities, understanding profitability, and predicting future performance. Without these insights, you might miss critical growth opportunities or make decisions based on incomplete information.
  • By understanding these limitations, you can start evaluating if your current system provides the depth of insights needed for your evolving business. Remember, effective financial analysis empowers strategic decision-making, ultimately generating forward-looking business intelligence and propelling your business ahead.

4. Inventory Management Woes

For retail businesses, accurate inventory management is essential to profitability. Knowing what you have, where it is, and how it's moving is crucial for optimizing stock levels, preventing stockouts, and maximizing sales. But if QuickBooks is your inventory companion, you might be facing some frustrating limitations.

QuickBooks' Inventory Features

  • Limited multi-location tracking: QuickBooks typically struggles with tracking inventory across multiple locations, clouding visibility and accurate stock control. This can lead to overstocking in one location and stockouts in another, impacting sales and customer satisfaction.
  • Basic reporting: QuickBooks' reporting capabilities for inventory movement and analysis might be insufficient for your growing business. A lack of insights can make it challenging to identify trends, optimize ordering, and forecast demand effectively.
  • Limited customization and scalability: QuickBooks offers limited customization options for inventory workflows and data fields, potentially hindering your ability to adapt the system to your specific needs. This can lead to inefficiencies and manual workarounds, slowing operations and preventing you from scaling as you otherwise would.

By understanding these limitations, you can start evaluating whether your current system can handle your inventory management needs, both today and tomorrow. In the end, robust inventory management is crucial for optimizing stock levels, preventing stockouts, and maximizing profitability in the retail world, all instances where Quickbooks eventually falls short.

5. Industry-Specific Features

Businesses thrive on efficient project cost management, no matter the industry. Whether building structures, crafting marketing campaigns, or developing software, every detail – from materials to labor – needs precise tracking and analysis for optimal budgeting and profitability. But if QuickBooks is your go-to tool – even a heftier version like QuickBooks Enterprise – the software's generalist approach isn't doing you any favors.

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QuickBooks' Generalist Approach

  • Limited industry-specific features: Designed for a broad range of businesses, QuickBooks often lacks the specialized functionalities required for diverse project types across different industries. This forces you to rely on spreadsheets and manual processes, another blow to efficiency and accuracy in cost tracking and management.
  • Generic reporting roadblocks: QuickBooks reports might not align with the specific data points and insights crucial for projects in your industry. Such a lack of tailored reporting makes identifying trends, optimizing costs, and making informed decisions based on project-specific data difficult.
  • Limited customization options: QuickBooks offers limited customization options for workflows and data fields as well, so adapting the system to your specific industry's project needs isn't fun. Or even possible.

Does your current system provide the tools and capabilities you need for efficient and insightful project cost management within your specific industry? Because the right tools speaking the right language can unlock significant advantages that the competition will undoubtedly jump on if you don't.

6. Integration and Information Silos

Effective cash flow management and stalwart strategic capabilities are essential for small business owners. Yet, with QuickBooks at the core of operations, businesses frequently encounter all sorts of integration roadblocks and miscues:

QuickBooks Integration Challenges

  • Limited native integrations: QuickBooks often struggles to seamlessly connect with various software systems used across different departments, like CRM, e-commerce, or inventory management. This forces you to rely on manual data entry or third-party connectors, increasing workload and potential errors.
  • Data silos and inconsistencies: Disconnected systems lead to data silos, where information gets trapped within individual applications. Obviously, this limits real-time visibility, accurate reporting, and informed decision-making across the organization.
  • Cost complexities: As the number of disconnected systems grows, the need for additional integrations and workarounds multiplies, potentially increasing costs and complexity as you strain your IT budget and limit your ability to scale efficiently.

Thankfully, simply by understanding these limitations, you can start evaluating whether your current system provides the integration capabilities needed for seamless data flow, efficient workflows, and informed decision-making. In the end, robust integrations empower collaboration, streamline operations, and unlock valuable insights for sustainable growth.

7. A Lack of Data-Driven Decision-Making

Data drives intelligent decision-making in today's competitive business landscape. Therefore, your leadership team needs timely, relevant, accurate information to guide strategic choices, identify opportunities, and navigate challenges effectively. Unfortunately, if QuickBooks is your primary data source, you're probably facing an information deficit, and that's not great.

QuickBooks Reporting Limitations

  • Limited analytical capabilities: QuickBooks often lacks the robust analytical tools needed for in-depth data exploration and insightful reporting, restricting your ability to uncover hidden trends, understand key performance indicators (KPIs), and gain actionable insights for strategic decision-making.
  • Static information snapshots: Without data dashboards and real-time insights, leadership can't monitor performance and make timely adjustments, leading to reactive decision-making based on outdated data and potentially missing growth opportunities.
  • Industry-specific data gaps: As previously noted, generic reporting in QuickBooks might not cater to the specific data points and metrics relevant to your industry. Therefore, Quickbooks can limit informed decision-making and your ability to benchmark against industry standards.

Therefore, it’d be a good idea to see if your current systems have the data depth and analytical capabilities for insightful decision-making and proactive business leadership. If not, your organization is operating from behind the competitive eight-ball.

An ERP Solution vs. Accounting Software

Needless to say, a robust, cloud-based enterprise resource planning system addresses all of these potential pain points and oh-so-much more. To revisit the Quickbooks-related issues from above, just through an ERP-tinged lens:

  • Eliminate Spreadsheet Reliance: ERP systems reduce the need for external spreadsheets, minimizing manual errors and data duplication.
  • Advanced Reporting Capabilities: ERPs offer detailed, customizable reports and dynamic dashboards essential for strategic decision-making.
  • Tailored User Support: An ERP system supports growing teams by allowing simultaneous access to financial data, fostering collaboration.
  • Robust Inventory Management: ERP features like multi-location tracking and real-time stock levels address complex inventory challenges.
  • Industry-Specific Functionalities: ERP systems cater to unique operational requirements with specialized tools and functionalities.
  • Seamless Integration with Business Systems: A robust ERP will ensure efficient workflows and data consistency by integrating seamlessly with other software applications.
  • Data-Driven Decision-Making: ERPs enhance strategic planning by providing comprehensive, nuanced, timely data analytics for informed decision-making across the organization.

Granted, we’re not necessarily saying it’s time for you to immediately ditch Quickbooks and migrate your data to a comprehensive ERP. What we are saying, however, is that it’s well worth your time to find out if you have indeed outgrown Quickbooks. Thankfully, that’s exactly what Embark’s team is here for, helping you identify your current and future needs as well as identify the ideal solutions for your goals. And if Quickbooks is just fine for you at the moment, that’s exactly what we’ll tell you. But there’s no time like the present to start preparing for the road ahead, right? So let’s talk.

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