5 Limitations of QuickBooks for Growing Companies - ERP Software Blog (2024)

Despite its popularity as a small business tool, QuickBooks has a lot of limitations for growing businesses that need advanced functionality.

Many small and mid-sized businesses start off with QuickBooks in their company’s early days as it is a popular entry-level accounting solution. In addition, it offers the basic functionality that companies with a simple business model can use to get themselves off the ground.

However, the majority of businesses soon realize that the initial value of this tool comes with a lot of restrictions and limitations that make it unfeasible in the long term as they start growing or begin to incorporate more complex business processes. Here are the top limitations of QuickBooks for growing companies.

Top Limitations of QuickBooks for Growing Companies

Limited Users and File Size

Since QuickBooks is designed for small businesses, it has limitations on how many users or files it can handle simultaneously. Performance is impacted when handling large transaction volumes or when several users at working in the solution at the same time. After reaching a certain limit, users report slow performance and random crashes, making this a troublesome issue for growing businesses.

Difficulty Adapting to New Business Requirements

From new business requirements to meeting compliance regulations, your financial management solution should be able to adapt to new changes quickly. Businesses should be able to trace and show the transactions history and make changes if needed. However, QuickBooks users find that they are only allowed to change history by selecting a single transaction. Therefore, auditors who monitor extreme regulatory demands are challenged by this limitation.

Lot of Manual Data Entry

QuickBooks was developed to automate a limited set of major accounting functions. Most companies don’t integrate QuickBooks with other business software and manage integrations manually instead. While this works for small businesses with small data volumes, this is not feasible when the business grows. Employees typically are stuck manually re-entering data from one system to another - leading to human errors and wasted time and effort.

Weak Audit Trail

Among the major concerns about this tool is its audit trail. Business owners and accountants prefer to have a comprehensive and well-documented flow of financial information. With this type of financial visibility, they can better make data-driven, well-thought-out decisions. However, many basic accounting software programs, including QuickBooks, allow any user to log in and edit data without restrictions or an audit trail. If changes are not properly accounted for, this might lead to problems down the road, resulting in inaccurate numbers or skewed data.

Limited Financial Visibility

You need real-time visibility into your financial data if you want to make accurate and timely business decisions. QuickBooks doesn’t have any dashboards (only templated reports), so visibility is limited. Companies end up having to make decisions on outdated data.

Takeaway

QuickBooks is a cost-effective solution if you are a small business just starting out or have very simple business processes. However, growing businesses or mid-sized companies will require more advanced financial functionality and visibility into performance for long-term success.

If you’ve outgrown your entry-level accounting solution or are looking for a business management solution that can scale with your business as it grows, Microsoft’s cloud-based Dynamics 365 Business Central is a robust choice, and it is designed for small and mid-sized businesses. It’s an all-in-one solution that connects all your financials, sales, service, and operations under one platform so you can streamline your business processes, boost financial performance, and provide exceptional customer experiences. For a full comparison of features, you can check out our previous blog post, "QuickBooks vs. Dynamics 365 Business Central."

Find out if D365 Business Central is Right for You.

If you’d like to learn more about Dynamics 365 Business Central or explore whether it is the right fit for your business, get in touch with the Kwixand Solutions team. We are a Dynamics 365 Business Central Partner based in Vancouver, Canada, and we help businesses across North America transform and thrive with Dynamics 365. Reach out to us directly at info@kwixand.com or 1-604-256-5800. Alternatively, you can book a free consultation here.