QuickBooks is one of the most popular introductory accounting solutions for small businesses—and for good reason! It’s user-friendly, easy to set up, and simple to learn. However, as businesses grow, their needs often outpace QuickBooks' capabilities, especially when it comes to inventory management, CRM, eCommerce integration, and advanced reporting. If your business has reached this point, it may be time to explore QuickBooks alternatives. In this guide, we’ll explore why businesses replace QuickBooks and why ERP software is often the top alternative.
To make this process easier, we have put together a QuickBooks Replacement Kit – Switching from QuickBooks.
QuickBooks is designed as an entry-level solution with a primary focus on accounting. For growing businesses with more complex operational needs, these limitations become apparent. Here are the top five reasons businesses replace QuickBooks:
The top 5 reasons to replace QuickBooks are:
- Limited Reporting
- Double Entry and Keying Errors
- Limitations with File Size and Data
- Generic and Impersonal Support
- Lack of Integration/Customization
Limited Reporting and Transparency of Business Health
QuickBooks offers basic accounting reports, but it lacks the ability to integrate data from other systems like inventory or warehouse management. This makes it difficult to combine information in a meaningful way and get a complete view of your business health and performance.
Double Entry and Keying Errors
If you use a separate system in conjunction with QuickBooks (even Excel or paper) you probably already know the troubles of double-entry and keying errors. Taking information from one system and manually transferring it to another is like walking a tightrope with accidents just waiting to happen. Keying errors are particularly common when data does not move automatically throughout the system. Ultimately this can lead to incorrect business information and data loss – impacting customer satisfaction and hurting your bottom line.
Limitations with File Size and Data
Entry-level software is not built for substantial data requirements and may begin to slow as your business grows. To prevent this, it is common for a limit on data file size to be set, which forces you to purge your data on an ongoing basis. The implementation of an all-in-one solution eliminates this process and frees up your time for analyzing the data.
Generic and Impersonal Support
QuickBooks is extremely popular, but as a result, the support you receive may not be personalized and specific to your business. The benefit of moving upstream is that you will receive specialized support by those that understand your business (some businesses more than others). There are some solutions out there that will offer functionality that is specific to your industry in which you can expect the support team to understand your technical and/or business problem.
Lack of Integration/Customization
QuickBooks often requires add-ons or external tools to handle other business functions. This creates inefficiencies and prevents seamless data sharing across departments. One of the most compelling reasons to move off QuickBooks is to have a single system to manage your business. No more paper, excel or inventory add-ons to worry about. Dealing with a single interface with interconnected data can do miraculous things for productivity.
Why Distributors Should Choose ERP Software as a QuickBooks Alternative
For businesses looking to replace QuickBooks, Enterprise Resource Planning (ERP) software is the most comprehensive alternative. ERP systems integrate accounting, inventory management, CRM, eCommerce, and other business processes into a single platform. Here’s how an ERP can transform your operations:
Interconnected Inventory Management and Accounting
First, let’s take a look at the inventory management side of things. Inventory management software helps to evaluate and maintain the health of your inventory. It’s about gaining insight into what you have in stock at your warehouse(s), exact locations of product and tracking where and to who that inventory was shipped.
However, without accounting and financial reporting functionality, it is very difficult to optimize that inventory and find opportunities to increase profit. The marriage between the two allows you to not only verify your inventory asset value to what you have in your warehouse but you can easily pull real-time, accurate financial reports based on the inventory data stored in the system to make smart purchasing and pricing decisions for your business. Doing this with two separate systems only leaves your business at risk for manual error and missed opportunities.
You might ask, "why not integrate QuickBooks or introductory software with a more robust distribution ERP software?" While there are valid reasons to integrate two systems such as eCommerce integration with inventory and accounting software, think of it this way: Why have multiple disconnected systems if all inventory and accounting processes can be managed from one system? Organizations utilizing both accounting as well as inventory data from one central system gain more accurate insight to improve operational processes and drive profits.
Here are a few examples of how inventory and accounting functionality works hand-in-hand in distribution ERP software:
Tracking Profit
No matter what you sell, every business needs to verify inventory with accounting data to avoid financial discrepancies. Having inventory and accounting information stored within one system allows for accurate financial statements, a clear idea of cash flow, liquidity, forecasting and thus, improved organizational efficiency. Information such as views of sales outstanding in A/R, available credit, and A/R aging summary are a few examples.
Ditch Tracking Invoices Manually
Although invoicing processes differ depending on how your business is set up, the idea is to automate invoicing as much as possible to avoid data redundancy and manual errors. For example, by having both inventory and accounting functionality, once an employee ships an order and marks it in the ERP system as such, you can have a workflow that automatically posts the associated invoice and changes the status in the system. Since inventory and accounting are tracked from one system, employees are able to see and add billing or banking details and minimize time spent on administration and redundant tasks.
"Blue link does all of it, it takes orders in, manages the inventory, processes the orders, does the invoicing, accounts receivables, accounts payable... it takes care of everything!"
-Melanie Beckett, SAGA Sciences
Employee Access
It’s vital that the right employees have access to both accounting and inventory information to aid in their daily tasks. Think about it…. Do the same QuickBooks users have access to inventory, sales and warehouse information or just accounting information that lives within QuickBooks? How easily can inventory and accounting reports be shared with others? Look for distribution ERP software that allows for user and group permissions so that the right employees gain better insight into both accounting and inventory information without having to log in to multiple systems.
Accurate Financial Reporting
The value of your inventory is part of your business assets and is important that these numbers are the same as what’s in your physical warehouse and what's recorded in your books. With all-in-one distribution software, robust reporting functionality allows for real-time visibility into the status of accounts, orders, inventory and sales all from one system. This ensures accurate monthly statements, tax returns, and audit-ready records.
How to Successfully Replace QuickBooks
Now that we’ve pinpointed the key reasons to move on from QuickBooks and determined that ERP is the best next step for distributors, the next big question is: how do you successfully transition away from QuickBooks? Here’s what you need to do:
- Determine your business needs.
- Set an appropriate budget based on more robust software - and not based on what you paid for QuickBooks.
- Make the search a priority by assigning resources and empowering people to dedicate the time to finding a new solution.
- Get employees involved and on board for making a change.
- Evaluate software vendors and then make a decision!
Determine Your Business Needs
Now that you have decided that your business needs a more robust inventory and accounting system, it is time to determine what components and processes are important to your business. Organize a list of system wants vs. needs and spend some time with employees throughout your organization to determine where processes can be improved.
Set a Budget
Once you know what you want to achieve with a new system, you should set a realistic budget for the project. Transitioning from an introductory software system to a more sophisticated one requires a large investment of resources including both capital and time.
Although the cost of such a system is significantly more than that of introductory software, the functionality and automation can potentially remove the need to hire additional staff to deal with growth. Factors such as the implementation method will influence the costs, so it is important to learn about the true costs of ERP software when setting a budget rather than using an arbitrary number.
Make the Search a Priority
Set aside the time required for the search beforehand or the project will eventually be relegated to the back burner. Understanding the importance of finding a new system will help avoid the “lack of time” excuse for putting the project off. A project of this scope deserves a dedicated team of people and investment of resources, as it will affect all areas of your business.
Evaluate Software Vendors
Let's assume everyone is on board with making the change and resources have been assigned to the project. Now it's time to start evaluating vendors.
Making the transition from QuickBooks to a more robust ERP system is a business-critical project – the decision ultimately impacts your company’s growth prospects and bottom-line. It is not a project that should be rushed, but to be successful it will need to be made a priority within your organization. Take the time to understand the steps to buying software, get employees and management on board for the project, and make sure you designate the appropriate (and realistic) amount of resources.
How Many ERP Vendors to Evaluate
Although there is no set number of vendors that your company should be evaluating, plan to short-list 2-4 vendors after initial discussions. Here are a few things to keep in mind about the risks of evaluating too many vendors:
- It becomes tough to distinguish between vendors and their offerings: ERP software demos can take hours, so try not to clog your mind. Instead, keep the number of demos low and spread them out over a few days, leaving time in between each to discuss and record notes.
- It wears down resources and employees: Again, it is a time-consuming process!
- It usually delays the decision-making process: The information overload leaves decision-makers feeling overwhelmed, so they often just “choose not to choose”.
Before you begin discussions with vendors, spend some time preparing a list of your requirements, determine where there are opportunities for measurable improvement, and involve the right people in the process. Diving a little bit deeper into this, when evaluating the handful of vendors that you choose to short-list, there are some major considerations to keep in mind such as; customer satisfaction, company size, sales process, support, on-going dependability, and costs.
Tips to Save Money During the Switch
Replacing QuickBooks with ERP is a major financial commitment and in order to make the right decision, focus on more than just cost and functionality—consider reliability, post-sale support, and vendor expertise. Below are strategies to save money during the process.
User Access
Determine which employees need access and how they’ll use the system. Some ERPs offer limited-functionality tools, like mobile sales apps, at reduced costs. Optimize user settings to minimize expenses.
Data Migration
To reduce costs, migrate only essential data, such as vendor, customer, and product information, plus key financials. While manual migration lowers vendor fees, it’s labor-intensive and error-prone. Alternatively, maintain historical data in a separate system for future reference.
Limit customization from the get-go
Avoid unnecessary add-ons or customizations during initial implementation. Many efficiency gains come with the base ERP package.
Internal Expertise
Training an in-house ERP champion to reduce reliance on external support and ensures smoother operations post-Go-Live.
Replacing QuickBooks with an ERP system is a critical step for businesses looking to scale efficiently. While the transition requires careful planning, the long-term benefits far outweigh the initial effort. By choosing the right ERP software and vendor, you’ll set your business up for success with streamlined operations, improved productivity, and enhanced financial accuracy.
