by John Cohen
QuickBooks has a huge market share of sole proprietors and small businesses/nonprofits, probably well earned because of its simple structure and user friendliness. But its simple structure and user friendliness also create some of its more serious problems.
For even small organizations, the biggest QuickBooks weaknesses are the lack of built-in internal controls, the poor reporting flexibility, and the sometimes awkward and time-consuming tasks to accommodate complex situations. Lack of internal control is the most dangerous, since it means the organization is subject to increased risk of undetected errors and even fraud.
Most users don’t use QuickBooks to its full potential anyway, so professionals like NPA Consultants spend a fair amount of time maximizing the QuickBooks features for our clients. But in any case, “the big question” has always been at what point should an organization move up to a more sophisticated software solution. The answer is not absolute, but here are a few suggestions for users to think about.
IF you have more than one or two accounting staff inputting data, you have enough volume to start thinking about a better software package. At the very least, you should have someone review your general internal control procedures and maximize the usefulness of the program while reducing risk.
IF you have multiple profit or cost centers, you may even be using “classes” in QuickBooks, but your staff may be spending excessive time in input and “work-around” reporting, especially using Excel spreadsheets.
IF you can’t produce financial statements without re-entering the QuickBooks trial balance into another program (e.g., Excel) you should consider a program which accommodates your reporting needs or supports one of the popular report writer programs.
IF you are using a “bolt-on” product which downloads to QuickBooks, you may be able to simplify the process, reduce staff time and confusion, provide for more detail, and reduce risk of error by using one integrated system.
IF you have a number of fixed assets and have been keeping track of them (and depreciation) on Excel sheets, you should either purchase a separate fixed assets program or consider moving up to a more sophisticated accounting program which has a fixed asset module.