10 Reasons Businesses Shouldn’t Use QuickBooks
Businesses need financial reporting and forecasting to expand and scale. There is efficient and effective software out there that provides what businesses need to grow, and QuickBooks is not one of them. With the proper financial data, finance leaders can make informed decisions about their growth and development. QuickBooks simply cannot offer the same level of detail and accuracy needed, with dimensions, recurring revenue, and forecasting. When it comes to making decisions about the future of your company, you need to be sure that you’re using the best possible tools, and QuickBooks doesn’t automate enough of the job. Here are 10 reasons businesses should avoid QuickBooks.
1. QuickBooks Isn’t Designed for Accountants
QuickBooks is a nice bookkeeping tool for small businesses, but it isn’t designed for accountants. While both bookkeeping and accounting are vital to any business, they serve different purposes. Bookkeepers ensure that all financial transactions are properly recorded in the company’s books, including invoices, receipts, and payments. Accounting focuses on providing decision-makers with financial information needed to make informed business decisions. The main difference between bookkeeping and accounting is that bookkeeping is chiefly concerned with recording financial transactions, while accounting is primarily concerned with interpreting, analyzing, and presenting those transactions. Knowing when to use each one will help you keep your finances in order and make better decisions for your business. If all you need is bookkeeping, stay the course with QuickBooks. If you want better insights, then use a financial management platform that’s endorsed by the American Institute of Certified Public Accountants.
2. QuickBooks Automation Is Limited
QuickBooks relies heavily on manual processes. This can be frustrating for businesses trying to digitize their workflows. Although QuickBooks does have some automation features, they are often limited and may not work the way you expect them to. If you’re looking for accounting software that will automate most of your bookkeeping tasks, QuickBooks is probably not the right fit for your business. For example, QuickBooks doesn’t have a double-entry bookkeeping feature. This means that you can’t track your expenses and income in two separate accounts, making it difficult to keep track of your finances and produce accurate financial statements.
Some of the key benefits from better automation include improved efficiency, accuracy, consistency, and freed-up resources. Most companies using QuickBooks probably dedicate too much time to manual processes. QuickBooks can’t give you a single view of shared accounts, customers, and vendors across entities. Instead, your finance team is forced to jump from one instance of QuickBooks to another, manually tracking areas such as intercompany eliminations, revenue recognition, and allocations and accruals for expenses. Unsurprisingly, this invites errors and leads to even more time spent making corrections.
3. QuickBooks Doesn’t Integrate Well
QuickBooks doesn’t integrate well with other software applications such as Salesforce. It doesn’t have a native integration to Salesforce, subscription billing, and can’t do credit memos to existing contracts, leaving you to do billing and revenue recognition in spreadsheets. This can be a big problem for businesses that rely on Salesforce for their customer relationship management and use QuickBooks. The lack of integration can lead to inefficiencies and errors in your data, which will impact your bottom line.
There are numerous benefits to integrating software applications within an organization, including cost reduction, improved efficiency, better decision-making, and a competitive advantage. When software applications are integrated, employees no longer need to search multiple databases or files to locate the information they need, saving a significant amount of time wasted on reconciliations and preventing errors.
4. QuickBooks Is Unable to Track Revenue Recognition
Businesses use a variety of reports to track their financial performance. Two of the most important types of reports for accountants and chief financial officers are balance sheets and income statements. QuickBooks is unable to track revenue recognition, a major gap as revenue recognition is a key accounting principle. Without proper revenue recognition, a company’s income statements will be inaccurate and could mislead investors and creditors.
There are a few possible workarounds, such as manually tracking revenue recognition using a separate spreadsheet or software program, which is time-consuming and not ideal for companies with high transaction volume. Despite these workarounds, the lack of proper revenue recognition tracking in QuickBooks is a serious miss that could have devastating consequences for a business. Investors and creditors rely on financial statements to make informed decisions, and if those statements are inaccurate, it could lead to disastrous results.
5. QuickBooks Is Unable to Track Multiple Entities
Using QuickBooks, each company entity requires a separate instance. The lack of tracking can lead to duplicate invoices and payments. QuickBooks also lacks some important features essential for businesses with multiple entities, such as generating consolidated financial statements. This can make it difficult to get a clear overview of your business’s financial performance. To avoid these issues, it’s important to have a system that can track all your entities separately.
6. QuickBooks Lacks Financial Controls
Financial controls are important in any organization. By putting financial controls in place, companies reduce the risk of errors and fraud and ensure that their accounting records are accurate and reliable. QuickBooks makes accurate auditing difficult as the user interface isn’t designed for auditing, and there are no dedicated auditing tools. Users must export data to Excel spreadsheets and use third-party software to perform audits, making the process time-consuming and error-prone.
7. QuickBooks Doesn’t Enable Remote Work
QuickBooks desktop has limited remote working capabilities. It’s not built to be used by employees who are working remotely. QuickBooks was designed to be used by employees who are in the same office as the company file. This can pose problems for companies with employees who work remotely or travel frequently. QuickBooks desktop is not built to handle remote working situations, leading to problems with data synchronization, communication, and collaboration.
There are a few ways to work around these limitations, such as setting up a VPN so that your remote employees can connect to the company file or using a third-party service to host your QuickBooks desktop file online. Another option is QuickBooks Online, but users sacrifice functionality compared to QuickBooks desktop.
8. It Takes Longer to Close the Books Using QuickBooks
The most significant disadvantage of a lengthy financial close process is the likelihood of errors and omissions. When data must be manually entered into multiple systems, the chances of human error increase exponentially, resulting in inaccurate financial reports and costly mistakes. A lengthy close also takes time away from other important tasks, as the finance team is usually bogged down during closing, preventing them from focusing on strategic initiatives. Additionally, a drawn-out close process can create unnecessary stress for everyone involved, leading to burnout and turnover, both costly problems for businesses.
9. QuickBooks Makes Forecasting Difficult
It’s hard to do financial forecasting using QuickBooks because it only offers basic reports that don’t provide a lot of information on future trends. There are some paths to get around this difficulty, such as using third-party software that integrates with QuickBooks and provides more robust financial reporting capabilities or exporting data from QuickBooks into a spreadsheet application like Microsoft Excel. However, QuickBooks still lacks the data needed to make strategic business decisions.
10. QuickBooks Users Depend on Spreadsheets
QuickBooks users are overly dependent on spreadsheets to get the data they need to make better decisions. Finance leaders face a host of issues when relying on spreadsheets, including limited functionality, difficulty sharing, time consumption, security risks, and data quality issues. QuickBooks’ dependency on spreadsheets makes it unreliable at best.
Summary
We’ve listed 10 reasons businesses shouldn’t use QuickBooks, but there are many more. For executives at growing companies who want to make data-driven decisions, Sage Intacct provides real-time financial insights. Sage Intacct is a true cloud-native financial management system, built in the cloud for the cloud, and offers simplified integration with other cloud-native platforms such as Salesforce. It offers functionality not found in the various versions of QuickBooks desktop or QuickBooks Online in areas that include core accounting, data entry, revenue recognition, job costing, and reporting. Unlike QuickBooks, Sage Intacct easily handles multiple entities and currencies, simplifies reporting, closing, and audit preparation, and helps finance executives share the data needed to make strategic business decisions.
