QuickBooks has been the accounting software of choice for distributors and other small businesses for several decades. Marketed as a full-service offering, Intuit’s QuickBooks can theoretically handle purchasing, distribution, sales order fulfillment, and inventory management. In practice, however, QuickBooks falls short when it comes to meeting the demands of multiple online marketplaces.
In the wake of global supply chain disruptions and a general shift toward online purchasing, smaller distributors have been transforming their business models to serve new channels like digital commerce alongside more traditional retailers. Consequently, they must juggle the logistics of fulfilling multiple small, geographically dispersed orders. As their distribution strategies change, distributors need a solution that can handle the massive amount of data and large number of transactions associated with an omnichannel fulfillment strategy.
QuickBooks is making changes as well. Intuit will no longer allow access to add-on services for its Windows 2018 desktop version. That means that as of June 1, businesses will no longer be able to use QuickBooks Desktop Payroll Services, Online Backup, Live Support, or Online Banking through QuickBooks Desktop 2018.
Businesses that don’t want to upgrade to a new QuickBooks version—or that are already overwhelmed by the hundreds or even thousands of spreadsheets and manual accounting processes required to use QuickBooks for complex inventory and fulfillment management—would do well to research alternatives.
The Natural Progression from QuickBooks to ERP for Distributors
Enterprise resource planning (ERP) solutions offer a feature-rich, intelligent alternative to QuickBooks for distributors looking to upgrade their accounting functionality. ERP automates, streamlines, and centralizes a host of back-end processes, making it an ideal fit for distributors juggling the complexities of serving multiple online marketplaces.
“At some point, QuickBooks tips over,” says Ralph Hess, vice president of sales for Navigator Business Solutions. “It just can’t handle the volume of transactions. It can’t really handle good accrual accounting, so as a distributor grows and matures, they need a more robust and mature ERP backend that allows them to replace the spreadsheets and manual processes they’ve been using for forecasting and ordering from their suppliers. That can help them more efficiently manage their inventory availability.”
Hess adds that migrating beyond QuickBooks is about much more than accounting. He says that when small distributors are looking to replace QuickBooks, they’ll typically comment, “It does purchasing, but that’s all it does. It doesn’t help me purchase better or smarter. I can’t seem to keep track of my serialized or lot-controlled inventory in a good, easy way. I can’t get really proper landed costs on products that I’m selling, so I can’t really properly evaluate my margins and my margin contributions.”
Here are five ways in which QuickBooks fails to keep up with the stringent demands of the digital marketplace.1. Scalability
QuickBooks requires a lot of manual input and processes, which can be time-consuming and prone to error. As distributors scale to meet the demands of multiple online marketplaces, they need a solution that can scale and be automated to improve efficiencies and productivity.
2. Inventory Levels
Accurate inventory levels are essential for any distributor working in the digital marketplace. QuickBooks has limits when it comes to inventory management, and data must be manually entered in many cases. Growing distribution companies require automation and accuracy when it comes to tracking inventory for online commerce.
3. Connectivity with Online Marketplaces
Distributors now must synch up with multiple online marketplace backend systems for real-time inventory and order fulfillment. This integration with online marketplaces just isn’t robust enough or adequate for online marketplace sales today.
4. Automation and Intelligence
Distributors are increasingly relying on centralized back-end processes for managing budgeting, finances, and accounting. Automation and intelligence can be applied to a vast amount of data to help monitor and manage the business, as well as inform future decision-making. QuickBooks simply does not offer such built-in automation and analysis of giant data sets.
5. Demand Forecasting
Having the right products in the right quantities at the right time is central to distribution. That takes solid demand forecasting, which is made more difficult by increasingly fickle consumer preferences. Quickbooks simply doesn’t bring the robust demand forecasting capabilities that are needed for keeping pace with buyer needs.
ERP solutions are designed to handle all these complexities of distribution, and neatly tie in data from operations, procurement, logistics, supply chain management, sales, marketing, and human resources. Data is centralized and can be easily shared among departments. The result is improved productivity and efficiency, less chance for error, and the ability to make business decisions on the fly.
ERP platforms also offer built-in intelligence and automation, making them an ideal solution for small distributors looking to transition beyond QuickBooks as they navigate the business of serving multiple online marketplaces. For more on this topic, download our free guide, Comparing QuickBooks with SAP Business One