It’s natural to outgrow the fear of the dark, belief in the Easter Bunny, and concern about what peers think of our hairstyle, clothes, and cellphone model. In our experience, it’s just as natural for thriving businesses to outgrow the need for Intuit’s QuickBooks.
QuickBooks effectively manages essential functions during business startup: generating invoices and reports, tracking payments and cash flow, and calculating payroll. According to Intuit’s July 31, 2020, Annual Report, QuickBooks is an excellent product for the 50+ million customers who use it and Intuit’s other products (i.e., TurboTax, Mint, and Turbo). The question is: Is it still the right fit for your business?
Is it time to update your accounting system?
While there are multiple signs that your company needs a more sophisticated accounting system, the three most common are:
- You and your team need customized or hybrid reporting.
- Your company is no longer a single entity.
- Your company conducts business beyond U.S. borders.
Sign No. 1: Need for Customized or Hybrid Reporting
Answers to two questions can indicate that your company needs more—or a different type—of financial reporting firepower.
Question 1) Can you track all the financial and non-financial data needed to increase efficiency and/or productivity, reduce costs and evaluate and optimize practices and processes?
Publicly traded companies need data regarding issued and unissued stock. Retailers and restaurateurs can better optimize profits when they measure revenue by the square foot. Employees of professional service companies can be motivated by incentive programs based on the number of hours billed/collected by individuals or the number of matters—not clients—recruited by the individual. You know your company has outgrown your accounting system when your people must manually input data to compile the needed information.
Question 2) Do your people waste time sifting through non-essential data to find the information they want and need to do their jobs?
Rarely do bookkeepers and controllers need the same information that CFOs require to do their jobs. And it isn’t only financial professionals who benefit from bespoke details. For example, does your chief scientific officer profit from overhead data or information about research and development and scientific trials? When your company’s accounting reports fail to provide relevant information to your people, these reports stifle rather than boost productivity.
Sign No. 2: Entities Share Resources.
Becoming a multi-entity organization is a benchmark that many clients reach early in their business life cycles. For example, one of our nonprofit clients is both a religious organization and the owner of low-income housing units. It cannot mingle funds generated from grants designated to subsidize the housing units with donations that support the church. We also work with tech firms that develop software, offer consulting services, and resell access to servers. They need to track revenue and expenses by service silo and product. Several biotech clients have multiple subsidiaries, each focused on a product and holding rights to its intellectual property. Clients engaged in health care commonly organize into entities based on exposure to legal liability. All of these organizations required more advanced accounting systems. Does yours?
Sign No. 3: Multinational means Multicurrency
Companies that do business in the U.S. and abroad are often multi-entity operations. However, even when they are not, they still need reporting that can convert foreign currencies into U.S. dollars and consolidate domestic and international operations statements. For example, if your company conducts e-commerce, consults with individuals and entities abroad, or conducts trials in countries where bureaucratic requirements are less onerous, your company would benefit from an accounting system that seamlessly integrates foreign currency.
The Best Accounting System for Your Company
QuickBooks is great for some—just not all—companies. If you suspect that your company has outgrown it, let’s find out. We’ll review your accounting records and provide a customized report at no cost to you. Your complimentary report includes an expert assessment of whether QuickBooks delivers the type of financial data you need to spur company growth, forecast and report accurately, minimize fraud and enable you and your management team to focus on your core functions. If it is not, we can recommend a system that better suits your company’s needs. Just give us a call: You’ve got nothing to lose and everything to gain.