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Outgrowing QuickBooks?

Outgrowing QuickBooks? Are you sure you’re ready for the transition?

Doug Jones, Fahrenheit Finance August 2013

Intuit’s QuickBooks is the accounting package most commonly used by small and mid-sized businesses.  Over the years Intuit has added many features and options, and the current QuickBooks Enterprise version is a pretty robust accounting package.  It still, however, is basically just that…an accounting package. 

It is no wonder then that growing businesses frequently decide that they want a system that integrates the various functions that comprise their business…sales, marketing, production, estimating, inventory, HR and other functional areas.

Frequently they are enticed by a software package that is specifically designed for their industry.  It claims to handle all aspects of companies in that industry from business development through order processing through shipment through collection.  And many of them do exactly that.  Not surprisingly, most of these systems have relative strengths and weaknesses.   A great production module is paired with a weak financial reporting system, etc. One benefit of these systems is that they do not include modules that are irrelevant to that specific industry.

Other companies lean toward the various Enterprise Resource Planning systems that dominate the larger company space.  ERP systems aim to provide an integrated suite of modules that cover all business processes of a company. They are not designed for a specific industry, but rather can handle a wide variety of business process which can be customized for a specific company’s needs. The benefit of flexibility comes with significant up-front costs to customize the system to a company’s needs.

Either option can look very promising to a company who has been frustrated by QuickBooks’ real and imagined limitations, so the purpose of this article is not to try to talk anyone out of such a transition.  Rather, it is to help anyone headed down that road avoid some of the problems that others have encountered.

What do companies neglect to consider?

  • What is the total cost?  Now and every year thereafter?  The cost of the software license is only the beginning.  Consulting fees to get the system installed and annual support fees seem obvious but are frequently overlooked or underestimated.  Additional licenses will be required as the company grows and more users require access to the system.  And those additional users will increase the annual support fees in future years.
  • Hardware: For some reason, many owners of small and mid-size companies view computer hardware like home appliances…they should be good for 7-10 years!  Not so, and the installation of new software frequently means the replacement of much of a company’s hardware.
  •  Training:  Offered by either the software provider or a qualified third party, training is frequently the first thing to be cut in the budget.  This age old tradition has been strengthened by an environment where people learn how to use their new smart phone or tablet by “just playing with it.” That strategy works fine for a device that you are using on your own.  Not so much with an application that links several diverse departments and functions across a company.  Even if they are able to figure it out by trial and error, the cost of getting there will be significant.
  • Time:  This is an easy one.  Take the amount of time expected to complete the migration and double it. Stuff happens.
  • Who’s in charge?  First, what doesn’t work:  the president being in charge or no one being in charge.  The president, despite all good intentions, will have many other important issues to deal with during a lengthy transition process. The concept that each department head will be in charge of their portion will not work either.  Since the new system is intended to bring together the various areas of a company, there will be many “cross-functional” decisions to be made, and they need to be made the right way at the beginning to save headaches later.  So, yes, there needs to be a project manager.  That person, either an employee or an outside resource, should be completely dedicated to the project.  They need to have a complete understanding of how the business operates, and they need to be a great communicator with staff in all areas of the business.  Too often the following mistakes are made when designating a project manager:
  • They are not relieved of their existing duties by a qualified replacement.
  • The individual knows one area of the business really well (often accounting) but doesn’t have a working knowledge of the other business functions.
  • The project manager is expected to DO everything with regard to the new system.  This can involve a lot of data importing, data entry, report creation, etc.  Much of this work needs to be delegated to others. Otherwise it can become overwhelming for one person to handle.  That results in time delays, taking shortcuts and burn out.

So forge ahead with a new system, but make the process more productive by avoiding these mistakes which so many others have made before you!

Doug Jones is a Director at Fahrenheit Finance, where he works with small and mid-sized companies as a Fractional CFO and on special projects in accounting and finance.  He can be reached at