7 Signs Your Manufacturing Business Is Outgrowing QuickBooks
QuickBooks is valuable accounting software for many small and growing businesses. However, manufacturing accounting is different. Relying solely on QuickBooks to manage data for a growing manufacturing company will result in limitations.
QuickBooks offers a solid foundation when integrated with other applications built for manufacturing businesses. If you’ve noticed the following symptoms, it’s time to explore how to support your evolving needs better.
1. Limited integration with manufacturing-specific applications
QuickBooks has broad integration capabilities, but niche manufacturing applications need help establishing a solid connection. Then, it’s up to you to navigate integration, often without the support you need.
Seamlessly connecting shop floor and accounting systems requires API access and two-way data flows. QuickBooks needs to catch up here. Integrating JobBOSS2 with QuickBooks enables accounting efficiencies while potential bolt-on integrations like Fathom help with analytics. But data integration hurdles like extraction, transformation, and loading—not to mention enabling process changes—mean this integration is far from turnkey.
Plus, historical data migration and revamped workflows are required when joining QuickBooks to applications like JobBOSS2. Unfortunately for manufacturers, it’s not as easy as flipping a switch. However, careful implementation, planning, and ongoing adjustments help.
2. Inadequate reporting for complex manufacturing needs
QuickBooks offers multiple out-of-the-box reports, but they only go so far in meeting manufacturers’ data analysis needs. QuickBooks needs more functionality for generating the deeper operational insights an industrial business requires.
Manufacturers need real-time tracking of key metrics like backlogs, works-in-progress, sales, and accounts receivable to guide decisions. QuickBooks doesn’t provide live production monitoring or role-based visibility into shop floor activities.
However, advanced tools like Power BI can extract QuickBooks data and layer on manufacturing intelligence from systems like JobBOSS2. Power BI’s dashboarding and drill-down capabilities help managers, sales teams, and shop floor workers stay synced with integrated visibility into deadlines, stock levels, delays, and more.
3. Difficulty managing multiple contacts and addresses per entity
QuickBooks allows only one primary contact and address to be associated with each customer or vendor entity. However, manufacturers frequently navigate relationships with multiple decision-makers, accounting staff, purchasing agents, and relevant sites at every client organization.
QuickBooks’ inability to track secondary sales contacts, billing resources, or plant locations constrains operations. When data is fragmented across siloed spreadsheets requiring manual input, in-house teams lose visibility into the nuances of procurement protocols or order fulfillment preferences.
This issue compounds when manufacturers scale their customer rosters and have multiple vendors servicing expanded product lines. Juggling critical customer hierarchies and purchasing relationships via makeshift workflows could be more efficient.
4. Challenges with complex inventories and works-in-progress
Accurately tracking manufacturing inventory status across raw materials, components, subassemblies, and finished goods becomes awkward and unmanageable in QuickBooks. Its simple inventory categories of “products” or “non-inventory” items don’t quite represent manufacturing’s intricacies.
Some businesses try grouping items as Bundles to associate the ingredients with the end products, but this risks unintended consequences like negative inventory balances when invoices reduce quantities.
Work-in-progress tracking accounts for materials consumed, operation steps completed, and resources used for jobs in all stages of production—some of which aren’t yet fully built or invoiced. QuickBooks can’t connect production processes to inventory movements and associated costs.
Multilevel bill of materials structuring is absent, adding further hardship when managing availability for downstream production schedules. Using disconnected spreadsheets and informal processes rather than automated, integrated systems, risk oversights, calculation errors, and materials shortages.
5. Restrictions in data conversion and import capabilities
As manufacturers scale up, huge volumes of data are generated from inventory, production, quality control, scheduling, and more. This disparate data requires collection and analysis. However, QuickBooks can’t process data from peripheral manufacturing systems.
Whether converting historical records during a new QuickBooks implementation or automating daily/weekly data feeds, manufacturers often struggle with technical barriers, import wizards with vague instructions, and mismatched data structures between systems.
Something as routine as collecting vendor invoices needs manual review and spreadsheets to ensure accuracy. Information crucial to production planning, like upstream supply chain delays or material standards updates, depends on manual updates. This approach increases the risk of relying on outdated information for important decisions.
6. Inefficiency in managing large volumes of transactions
As manufacturing production ramps up, key transactions like inventory issues and receipts, stock transfers, and purchase orders can easily snowball into tens of thousands of records per week.
QuickBooks bogs down trying to cope with high volumes of data, which leads to data entry bottlenecks. Employees get frustrated struggling with system latency as transaction records continue queueing.
This inefficiency stalls everything from material planning to month-end close reporting and analytics, reducing your ability to optimize costs or meet target metrics. QuickBooks Online specifically caps transactional throughput based on your subscription tier—hit your tier’s limit, and you can’t recapture lost insights.
7. Complications tailoring the chart of accounts for mfg
While QuickBooks offers some flexibility to add or rename general ledger accounts, manufacturers often hit a wall trying to contort QuickBooks’ finance-focused structure to reflect manufacturing’s operational complexities.
Adapting QuickBooks’ chart of accounts to capture material types, production processes, quality metrics, customer/product profitability, and other manufacturing concerns proves frustrating. Workarounds like broad bucket accounts, convoluted concatenated names, or excessive segments create complications beyond income tracking and expense accounting.
Production planning requires flexible, granular tracking and reporting. For example, metrics like “temperature during curing” alerts manufacturers to emerging defects—without that knowledge, your team could cycle through multiple production rounds before catching an error. QuickBooks custom fields and reporting can’t calculate process steps or operational data points, such as scrap rates or machine utilization.
Why is QuickBooks not good for manufacturing companies?
QuickBooks is not ideal for manufacturing companies because it lacks capabilities for industry-specific tasks.
The shortcomings include:
- Limited inventory tracking details
- The need for advanced data analytics
- Lack of customizable features for manufacturers
- It doesn’t easily support rapid growth or scalability
It doesn’t offer the type of inventory granularity essential in manufacturing settings.
Integrating QuickBooks with specialized manufacturing software helps connect critical financial insights with tailored manufacturing production data for true end-to-end visibility.
Is your manufacturing business outgrowing QuickBooks?
If your growing manufacturing business relies heavily on QuickBooks but needs greater connectivity with other manufacturing-focused software like JobBOSS2, Chortek can help.
Our years of experience integrating QuickBooks with specialized manufacturing platforms allow us to customize solutions that match your evolving operational requirements. By outsourcing accounting, growing manufacturers can leverage automation and scale up—with access to an expert accounting team.
Contact Chortek’s outsourced accounting experts to discuss how our advanced integrations and outsourcing services can empower your expanding manufacturing business.
