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Seven signs it’s time to leave QuickBooks behind: A guide for growing distribution companies
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Time to read: 6 min
Business growth is never a bad thing, but it can feel that way if you’re trying to wrangle your expanding operations entirely on QuickBooks. While the accounting software is a great financial management solution for small- to medium-sized businesses, its limitations begin to show when your needs become more complex.
With more SKUs, multiple warehouse locations, higher order volumes, additional suppliers, and nuanced financial reporting, you need a system that can bring your departments together, keep information flowing, and support seamless operations.
Here are seven signs that your distribution company has outgrown QuickBooks, and that sticking with it could be holding your business back.
What we cover:
1. Inventory management is a nightmare 2. Important information lives outside the system (likely, in someone’s head) 3. Excel has become the backbone of the company 4. Your systems don’t communicate with one another 5. Every task includes at least one manual step or handoff 6. Business decisions are reactive, rather than proactive 7. Financial reconciliation takes ages Quickbooks vs. ERP systems Business Central: Your distribution ERP solution Take your distribution business to the next level Section title
1. Inventory management is a nightmare
QuickBooks can handle the simple, straightforward processes of buying, storing, and selling inventory at one location. If your business needs anything more than that, you’ll find QuickBooks to be lacking. Advanced inventory reporting simply isn’t there.
For distribution companies, QuickBooks has no built-in capabilities for barcode canning, or serial number, lot number, and expiration date tracking. It struggles to differentiate between multiple warehouses or other sites.
To capture this increased complexity, distributors are forced to resort to external applications or spreadsheets for handling inventory information. When it comes time to reconcile at the end of the month, everyone is sifting through multiple spreadsheets for inventory information that should just be in one place.
2. Important information lives outside the system (likely, in someone’s head)
Process and workflow documentation only becomes more important when operations expand. Your entire business needs to be aligned around the same consistent, repeatable steps, and information, like routing and purchasing schedules, needs to be easy for people to find. If the only place this information is stored is in your or someone else’s already overloaded brain, it’s a disaster waiting to happen.
Your business becomes dependent on just one or more individuals, rather than relying on processes. And while higher subscription tiers of QuickBooks can provide you with automated workflow capabilities, they're limited to financial processes; interdepartmental workflows are impossible to replicate.
3. Excel has become the backbone of the company
One day, you look at your computer desktop and realize it’s become crowded with Excel documents: spreadsheets for tracking inventory, vendor information, customer-specific pricing, and financial reporting. What’s worse, you know you can’t do your job without them.
Excel is an incredibly useful tool for analyzing data and building custom reports, but it shouldn’t be your main tool. If you and your team are maintaining and regularly working from shadow spreadsheets—the term for Excel documents housing information that should be contained within your official business systems—it’s an indicator that your current system isn’t providing the functionality you need. And with shadow spreadsheets in play, your data is at serious risk.
Multiple versions of the same document, some with the most up-to-date information and others without, can circulate between team members. Without a single verifiable source of truth, trust erodes in both the system and the spreadsheets designed to work around it because team members can’t reliably believe what’s in either one.
4. Your systems don’t communicate with one another
You’ve seen how disastrous it can be when different departments don’t communicate with one another. The same thing can happen when business software doesn't integrate.
The accounting team uses QuickBooks for finance, the warehouse team uses a different platform for inventory, and the sales team relies on yet another platform for monitoring customer activity—and you’re paying separate subscriptions for all of them.
When these systems operate independently, employees have to work harder to connect the dots between them. They may need to manually transfer information, double-check records, or contact other departments just to get a complete picture of what's happening. That leaves a lot of room for mistakes, like data entry errors and a lack of up-to-date info.
5. Every task includes at least one manual step or handoff
With technical systems that don’t communicate, you’re left sending email reminders or pinging your coworkers on a chat platform to force processes to flow between departments. Or you're manually updating prices, quantities, and discounts in every place they appear.
When you weren’t handling as much business, the manual tasks your employees had to complete to keep things moving probably didn’t seem so bad. Now that you’re processing more orders than ever before, the cracks are starting to show. What should be relatively straightforward, easy processes become a series of disconnected tasks requiring constant employee intervention.
6. Business decisions are reactive, rather than proactive
When you can’t see what’s happening across all areas of your business, you’re often left responding to problems after they’ve already occurred. QuickBooks provides useful financial information, but growing distribution companies need visibility beyond their accounting records. You need to understand what's happening throughout the supply chain, including inventory availability, purchasing activity, supplier performance, and sales trends, to be able to anticipate what’s coming.
7. Financial reconciliation takes ages
Your finance team dreads the end of every month because it means sorting through the tangle of your data to complete month-end close. They’re spending days chasing down important figures from different departments, trying to reconcile records from multiple systems, and manually combining reports to put together an accurate picture of your company’s overall performance. And when they’re focused solely on compiling information, they miss out on analyzing it.
These processes only become more complicated the more your business grows. By the time you have a complete picture of your business's performance, the information may already be outdated.
Quickbooks vs. ERP systems
QuickBooks can handle the day-to-day financial functions that most small businesses need: income, expenses, payroll, invoices, reports, and account maintenance. An ERP can do all that and more, providing robust options for deep financial work like role-based dashboards, tax regulations, and international compliance, then linking these functions to inventory, sales, and customer service.
While many distribution organizations choose to move to an ERP platform when they realize QuickBooks is no longer enough for them, that is not the only path forward. If you’re not ready to leave QuickBooks, there are plenty of extensions that bring new functionality to the platform through inventory tracking, project management, and accounting.
At its core, QuickBooks is an accounting software, lacking capabilities around inventory, warehousing, and fulfillment. An ERP platform can take on many roles within your company, supporting financial and operational initiatives in equal measure. It offers many modules and extensions, so it can grow and fit whatever shape your company is taking.
Image: Caption.
Business Central: Your distribution ERP solution
If you’re feeling the pain of all the above, it may be time to consider moving beyond QuickBooks and investing in an ERP system designed to support your company's growth.
One potential ERP solution is Business Central. Designed to connect core business functions, Business Central provides growing distribution companies with a comprehensive platform for managing all their operations, not just finance.
Here's how it can help:
Connected financials and operations: Bring the work of several different departments into one unified environment. With information connected across departments, employees can work from one consistent source of truth for business data.
More advanced inventory management: Track inventory across multiple locations, manage item variants, use lot and serial number tracking, and support warehouse processes with additional functionality and extensions as needed.
Purchasing and supply chain visibility: Manage vendors, automate warehouse operations, and monitor incoming shipments while gaining better insight into supply and demand.
Microsoft ecosystem integration: Connect with familiar tools such as Excel, Outlook, and other Microsoft business applications, so employees can find the information they need across their existing workflows.
Reporting and business intelligence: Find financial and operational data all in one place to better understand inventory levels, profitability, sales performance, and other important business metrics. Make month-end close a breeze.
Room to grow: Extend Business Central with additional applications, integrations, and functionality as your business evolves, whether you're adding warehouse locations, expanding product lines, or introducing new sales channels.
Take your distribution business to the next level
Leaving behind a familiar software and moving to an ERP system is a significant undertaking. It involves evaluating your existing processes, identifying the functionality that your business needs, and determining how and if a new system can accommodate your future growth.
Syvantis Technologies can help you make the transition, and support the future of your business without having to carry around the past.
No matter how you choose to move forward, do so with confidence in your processes and your system.
All blogs and downloadable resources are written by real Syvantis team members with help from our expert consultants.
