If today’s small and mid-sized manufacturer is to sustain growth and thrive in today’s global marketplace, they must evolve from some of the practices they used in their early stages. Case in point: the use of QuickBooks.
Many small and mid-sized businesses (SMBs) adopted the use of QuickBooks to track the finances of their young businesses. However, many of these young businesses soon realize that to manage the business, the scope of business systems needs to go beyond finance. It needs to include the ability to plan, procure, produce, distribute, and sell, as well as to account. In addition, today’s business climate demands more complex transactions, requires more critical planning and tracking of revenues, greater visibility of customers, and involves more stringent accounting and regulatory standards.
QuickBooks lack of scalability can be an impediment to growth. Companies that implemented the solution as a start-up find that as they have success, the use of QuickBooks can become a limitation. The pressures put on IT when forced to work with inefficient software may close or limit opportunities for new business. Businesses that thrive and survive stay ahead of their employees need for technology, rather than struggle in trying to catch up to it. Efficient solutions scale easily as growth occurs.
QuickBooks accounting-only orientation provides little insight into business opportunities, decision support for client management, or full understanding of the quote-to-cash cycle. This proves problematic in a number of ways. Multiple applications are used in order processing, and multiple entry of information is time and cost consuming.
Since the data in QuickBooks is limited to financials, the information needed to make informed decisions across the business typically resides in other applications. This results in excessive use of spreadsheets, a time-consuming and error-prone practice that fails to deliver a current picture of developments. By the time a spreadsheet is in hand, in today’s accelerating and often-volatile environment, the information is dated. To have a clear understanding of how the business is performing, much more is needed than what QuickBooks provides.
With QuickBooks, companies adapt their businesses to the solution, rather than having the application respond to the growing and changing needs of the business. Leading companies are leveraging multiple applications, such as Financial Management, Product Management, CRM, Operations Management, Supply Chain Management and eCommerce, to automate and precisely track customer interactions in today’s dispersed markets. Rather than having to chase and input data from multiple sources, these applications are integrated to provide users within the business a global view of operations and customer relationships.
Worse still, due to the limited and horizontal nature of Quickbooks functionality, best practices for critical manufacturing workflows aren’t provided by default, creating a burden on organizations to define manual processes that have become “norms” in the manufacturing space.
Not only has the marketplace changed dramatically, so too has the way workers engage in their jobs. Today, many companies must provide staff remote access to and input into financial information, which is not something QuickBooks lends itself to. QuickBooks Enterprise Solutions was designed to be deployed on-premise, and lacks built-in remote access capabilities and key security features to protect sensitive financial data.
Today’s commercial marketplace is marked by rapid and often volatile change. Specifically with regard to increasing regulatory and compliance demands, SMBs must be able to trace and demonstrate the history of transactions and correct them if they were entered improperly. However, QuickBooks only allows users to change history by selecting a single transaction, so auditors monitoring today’s more stringent regulatory demands are challenged by this limitation.
In today’s global markets, growing SMBs need to be able to do business in multiple currencies. QuickBooks isn’t designed for this. Users must create separate files to track multi-currency transactions. This complicates financial record keeping and makes it difficult to answer routine manufacturing questions.
In today’s business environment, where real-time information is increasingly essential to respond to market developments, the difficulties QuickBooks presents in delivering data across the business is another shortcoming. SMBs cannot afford to operate with dated information, constantly looking for spreadsheets. Information must be available where it is needed, when it is needed, and more often than not that is “right now.” QuickBooks struggles with this capability.
QuickBooks scratches the surface for a wide variety of industries and chooses to leverage integration partners to offer second level functionality for specific industries such as construction, manufacturing, distribution, and others. For established and growing businesses in these industries, the business best practices offered in the marketplace by systems with deeper industry functionality can be leveraged for growth.
Locally hosted technology has less appeal to organizations as widespread high-speed internet access, the need for mobility and smart devices have given rise to cloud computing. As the benefits of cloud accounting are realized by more companies, one thing is clear: the cloud has changed the way business operates. Whether you know it or not,
This is the second part of the 2-part series entitled 10 Questions to Ask Before Selecting Your Distribution ERP System. Check out Part 1. To recap, your distribution company has decided to invest in a new ERP system to drive growth and foster a competitive advantage for your distribution business. From Part 1, you’ve assessed