January 8, 2021
Most nonprofits and small businesses begin their financial lives using Intuit’s QuickBooks, which— with more than 80% market share—is by far the most popular accounting application. It’s well known. It’s also easy-to-use, and it offers the functionality a business or nonprofit needs when it’s starting out.
But if your business has moved beyond the entry level, your organization may be facing a number of challenges as you hit the limits of QuickBooks’ functionality. QuickBooks simply wasn’t designed to provide professional financial management capabilities to growing organizations with sophisticated, evolving demands that require more and better visibility into financial and operational performance—such as automating key processes, providing anytime, anywhere access, enforcing internal controls, customizing functionality, and integrating with other critical applications.
The Hidden Costs of Quickbooks
Organizations accustomed to spending extra time managing workarounds in QuickBooks may not even realize the number of inefficiencies getting in the way of doing day-to-day business. These inefficiencies become ingrained in the day-to-day operations of the business. And because there’s no immediate cash outlay, doing nothing may seem like the only option—or at least the most cost-effective option. The reality is if you’re using QuickBooks you’re incurring a broad range of hidden costs.
Most organizations don’t integrate QuickBooks with other key business applications. It’s very common to see lots of manual integration points between systems in companies using QuickBooks—which may be fine when volumes are small, but is a real productivity killer as the organization grows. Finance departments must manually research, re-enter, and verify data that’s already captured elsewhere at the cost of lost productivity, data entry errors, and revenue leakage—making it virtually impossible to gain a 360-degree view of the overall finances.
Organizations with sophisticated accounting requirements, such as revenue recognition and job costing, often find the need to develop workarounds because QuickBooks doesn’t provide the built-in capabilities for these complex processes. To address these deficiencies, finance organizations will often export data to multiple spreadsheets, set up dummy accounts, and ultimately create additional journal entries to be entered each month. Some even develop homegrown applications for recording revenue or expenses outside of the system. These workarounds can lead to duplicate entry errors or reports based on incorrect or stale data, introduce inefficiencies into the process, consume additional time and resources, lack control and compliance, and create another source of information outside your financial system. Limiting collaboration, not providing adequate controls over data, and lack of integration can all delay strategic decision-making and obstruct growth oriented business management.
The Benefits of Cloud Computing
QuickBooks’ limitations drive the need for organizations to transition to a more robust system and a new generation of cloud computing-based financial software has entirely changed the dynamics. The cloud computing vendor takes on all the information technology cost and assumes the risk of moving from an outdated financial system. All you need is a web browser and an Internet connection—no need to invest in technology, servers, software, or IT.
As they outgrow QuickBooks’ capabilities, organizations should consider a cloud-based system that delivers best-in-class financial and accounting functionality, and offers:
Anytime, Anywhere Business Visibility
- Access to Real-Time Data and Processes available anytime, anywhere with a web browser and Internet connection—offers unprecedented access to users inside and outside your organization.
- Flexible Reporting with built in multi-dimensional architecture, delivers accurate and timely reports with relevant insights into data.
- Role-Based Dashboards deliver real-time global and local visibility into the state of the business—to the right stakeholders at the right time—providing deep insights into business performance.
- Extensive Integrations with leading applications enable organizations to easily, cost-effectively assemble an interoperable system of best-in-class applications, providing the best solutions for your business needs.
- Easy User Defined Workflows automate, control, and streamline processes as needed to optimize processes throughout the organization.
- Scalable Architecture Grows with evolving business needs.
- Multi-Ledger System delivers scalability and control for high-volume, high-transaction businesses.
- Multi-Scenario Planning drives business performance and management, and enables storage of an unlimited number of budgets, forecasts, and other relevant reporting formats.
Overcoming Resistance to Change
Despite the inefficiencies and hidden costs of continuing to use QuickBooks, many organizations conclude it’s more cost effective to keep what they have when faced with the cost of change now vs. the cost to postpone. While this might have been true before — when the only option was to switch to expensive on-premises software like Microsoft Dynamics or Sage — today’s cloud computing-based systems are extremely cost effective. In fact, the time you save from simply automating critical processes and eliminating spreadsheets can often more than cover the cost of moving to the new system, typically in just a few months. To learn more about the cloud computer options available to increase the efficiency of your organization, contact Jim Norton, CPA, Senior Manager, Accounting Technology Services, at email@example.com.