No one accounting software product is right for everyone. As good as QuickBooks is, even
Intuit recognizes this fact. So how do you know if QuickBooks is right for your (or
your client's) business? Here are three things to consider.
Features. First you should consider whether QuickBooks offers the
features your business needs. For instance, Intuit only began offering the first-in,
first-out (FIFO) inventory method for certain editions of QuickBooks in recent years.
Prior to that, only the average cost method was available.
Similarly, QuickBooks provides a
Loan Manager and a Fixed Asset Manager
to help manage Notes Payable and Fixed Assets accounts respectively. They both have some
useful features, but the Loan Manager has no Notes Receivable counterpart and the Fixed
Asset Manager is intended more for external accountants than for businesses owners.
Both features are available only in certain editions, and both are more of an
add-on than an integral part of the QuickBooks software. As a result there can be
complications, such as those experienced when backing up files.
Realizing that business needs are diverse, Intuit entered into a cooperative relationship
with accountants, ProAdvisors and programmers to enhance QuickBooks and develop
integrated third-party software solutions. That was in 2002, and almost ten years have passed as
of this writing.
Now, companies who need more advanced inventory solutions such as FIFO and last in, first out
(LIFO) unavailable in their edition of QuickBooks can select third-party software solutions that
integrate with their QuickBooks product. Other businesses, such as those engaged in
property management, can also find third-party software solutions to their QuickBooks needs.
Business size. Second, some businesses can be too large for QuickBooks to
handle. QuickBooks Enterprise Solutions software has mitigated this issue somewhat, but
QuickBooks has historically recommended the following formula to determine if QuickBooks
can handle the entity's accounting transactions:
(Monthly transactions x 2KB x 12) / 1,000
If the result of this calculation is less than 15MB, QuickBooks should be capable of
handling annual company transactions. [Note: don't worry about the "KB" and the "MB" --
just use the numbers shown.] This calculation does
not take into
account the growth of lists, the type of transactions processed by the company, or the
company's computer hardware used to enter and process the transactions. Performance
degradation can be experienced if any given component (such as the number of
company employees) is stretched too far.
There is also the issue of concurrent employees operating the QuickBooks software. Note the
term "concurrent" is used, not "total." Different editions of QuickBooks can support different
numbers of concurrent users, and your software edition and license should reflect the
maximum number of concurrent users you expect.
Cost. Third, you should consider cost in relation to the company's budgetary
constraints. QuickBooks Enterprise Solutions software is the most robust of Intuit's QuickBooks
offerings, but it can be more costly than many small (and most micro) businesses can justify.
Even though QuickBooks Pro has been replaced by QuickBooks Premier as Intuit's flagship
offering, many small and micro business owners still choose QuickBooks Pro to run their
businesses because of the number of features it provides relative to the expenditure required
to acquire the software.
This may change as cloud-based offerings continue to become more feature-rich,
however. Among the advantages of cloud-based QuickBooks products over the disk-based
editions are 1) that your software is automatically kept up-to-date; 2) that your data
is available anywhere you have access to an appropriate web-enabled device; and 3) that your cost
is based on a periodic subscription fee model, rather than a capital outlay. Depending on
future changes to the Tax Code (including §179), the subscription fee model could result in more
favorable tax treatment for your business.
The foregoing list is not comprehensive. It is a good idea to consult a Certified
QuickBooks ProAdvisor (and perhaps one who is also a CPA) when considering whether
QuickBooks is right for your business; when considering which edition of QuickBooks to use;
and to ensure that QuickBooks is set up properly so that you can use the software to your
company's best advantage.
