There is no denying that QuickBooks is the world's most popular small business accounting system. It is reported to have 3.5 million users. For the money, QuickBooks provides a good value and a reasonable assortment of features to meet the needs of small and entry level businesses. While QuickBooks offers a good entry-level solution, it has limitations that prevent the product from meeting the needs of many companies and organizations – especially growing companies and larger organizations. Download Microsoft Dynamics GP and QuickBooks comparison brochure.

Limitations of QuickBooks

Comparing to higher level accounting systems QuickBooks has these basic limitations:

• Limited accounting system features
• Limited database performance
• Lack of Scalability
• Lack of integrations with other software packages
• Limited capabilities for enhanced internal control
• Inability to customize for specific needs

Microsoft Dynamics GP offers around 1,500 more features than QuickBooks Enterprise. For example, listed below are 16 key features provided by Microsoft Dynamics GP that are not found in QuickBooks.

1. Allocation calculations
2. Intercompany accounts
3. Statistical accounts
4. Supports landed cost tracking
5. Forecasted demand based on formulas
6. Multiple ship-to on same order
7. Automatic tracking of vendor performance
8. Partial pay invoice for partial receipt
9. Default printer destination by document type
10. Automatic calculation of late fees
11. Supports multi-dimensional items
12. LIFO and FIFO inventory methods
13. Applies sales tax rates by item
14. Support multiple warehouses
15. Lot & Serial number tracking
16. Customer specific pricing

If you run a smaller operation, these product characteristics are actually appealing. For one thing, having fewer features makes Intuit QuickBooks easier to use. If hundreds of new features were added to the product, users would have more difficulty mastering it. In addition, if QuickBooks incorporated a more robust database, its price would increase. If your organization is rapidly expanding, however, you will eventually outgrow the QuickBooks feature set and database performance.

DETERMINING WHEN YOU'VE OUTGROWN QUICKBOOKS

As a general rule, you are beginning to outgrow QuickBooks when you notice an unacceptable delay in the menus and screens when navigating QuickBooks, or when reports take an unacceptable amount of time to print. As a general rule, most companies using QuickBooks start to notice a decline in QuickBooks performance once the file size reaches 30MB or the total number of transactions exceeds 14,000. However, file size and transaction volume are not the best indicators of impending performance problems.
In QuickBooks, the number of customers, vendors, employees and other lists most dramatically affect performance. QuickBooks support acknowledges that significant performance problems generally occur when any list exceeds 10,000 – however, as a practical matter most companies see performance issues far earlier. For example, with each added employee, QuickBooks launches slower, and only a few hundred employees on a list can lead to unacceptable performance issues.

CPA's may love or hate Quickbooks Seeking the advice of CPA about accounting software is always a good idea. One of the reasons some CPA's love Quickbooks is that they know you will generate nice fees for them because they may have to spend a lot of time sorting through an accounting system. One of the reasons some CPA's hate Quickbooks is that they know that they may have to spend a lot of time sorting through your accounting system.

FROM QUICKBOOKS TO MICROSOFT DYNAMICS GP

The reality is that once you've started seeing performance and feature shortcomings in QuickBooks, this is a sure signal that your company is on the verge of outgrowing QuickBooks. The performance suggestions mentioned above will only delay the inevitable need to move to a stronger solution. One of the best migration upward paths offered to QuickBooks users is to step up to Microsoft Dynamics GP . There are numerous benefits to migrating from QuickBooks to Microsoft Dynamics GP . Presented below are just a few of those benefits.

Needs and Trends Resulting From Growth

As the business grows, specific needs for which QuickBooks is not particularly well-suited begin to appear:

• There may be a need for more simultaneous users than what QuickBooks can support.
• Multiple locations and remote workers may drive the demand for wide area network (WAN) IT infrastructure. Users will need to access the accounting application from multiple locations, perhaps including overseas locations.
• More transactions and greater demands on the application could cause the QuickBooks database to begin to perform poorly. Further, the need to switch to single-user mode in QuickBooks for certain functions may reduce productivity among team members.
• For the business that begins operating internationally, being able to denominate transactions in various currencies will become a demand on the accounting application – one which QuickBooks does not presently support.

In addition, the following general trends in the growing business may develop:

• Growing revenues and expenses and increased accounting complexity may drive recruiting a full-time accounting professional to join the management team.
• External financing requirements could lead required financial statement audits.
• Increased revenues, expenses, and users lead to increased risk; accordingly, the business will begin focusing on internal control over key business processes.
• Business growth likely will lead to more formal and organized detailed business performance planning processes, with appropriate financial and operational reporting against forecasted results.

Your Client is Growing and Needs a Scalable Solution

One of the challenges facing growing businesses utilizing QuickBooks is the limitation QuickBooks places on the number of simultaneous users of a data file. Depending upon the version of QuickBooks employed, the number of simultaneous users ranges from one to twenty-five.
Once an organization reaches these limits, QuickBooks provides no options for adding additional simultaneous users. As growing companies add employees and leverage the accounting application for additional management capabilities, this issue becomes quite significant and can limit an organization’s ability to continue to grow.
Further, anecdotal evidence indicates that adding more simultaneous users in QuickBooks negatively impacts database performance – sometimes severely. Therefore, even if QuickBooks could support the required minimum number of simultaneous users for a growing small business, this could impact system performance to the point that the system is unusable from a practical standpoint.

Specifically addressing the issue of scalability presented above, Microsoft Dynamics GP addresses and solves this problem by providing robust functionality for a large number of users without compromising performance of the database.

Internal Controls Have Become Increasingly Important to Your Client

For a small startup organization, internal controls are often little more than an after-thought. After all, in that environment, the business owner is often personally involved in almost every transaction and therefore, has first-hand knowledge of most events within the organization. As the business grows and additional team members are added, the need for internal controls increases to provide reasonable assurance that the business is meeting its key objectives.
Microsoft Dynamics GP addresses the issue of internal control from a number of vantage points. Among these are:

• A role-based security model
• Workflow management tools
• Enhanced financial and operational reporting
• Enforced password expirations and security-enhanced password rules.

For example, when creating users in Microsoft Dynamics GP , very specific user security roles can be established and these roles can then be assigned to individual users. Once the system administrator establishes a role – or modifies a predefined role – that role can be assigned to one or more individual users.

Strong financial and operational reporting is another key element in the internal controls structure available in Microsoft Dynamics GP . The ability to access hundreds of predefined reports coupled with the ability to create a virtually unlimited number of reports through FRx, PivotTables®, Analysis Cubes, and other data query and reporting functions means that numerous detailed exception reports can be built to analyze Microsoft Dynamics GP data for potential internal control compliance issues. Your Client Needs Workflow Tools for More Control and Improved Efficiency.

Workflow is the automation and tracking of transactions through a business process. Steps in a typical workflow include initiating, approving, processing, and completing a task. While the smallest businesses can operate effectively with paper-based transaction processes, the inefficiency of handling, sorting, routing, filing, and retrieving paper causes a significant increase in the time and expenses associated with processing a transaction. Electronic Workflow facilitates immediate status reporting on a transaction.

QuickBooks Inventory Functionality is not as Robust as your Client Requires

For small inventory-based businesses, QuickBooks inventory capabilities might be s ufficient during the early years of operation. However, as the business grows and matures, the limitations inherent to inventory functionality in QuickBooks may force the business into developing expensive and error-prone workaround procedures, including maintaining inventory information in external spreadsheets or databases and journalizing information into QuickBooks. Such a process is not conducive to long-term growth and profitability.
Features that growing businesses may require but are missing in QuickBooks are as following:

• Support of different inventory valuation methods
• Support for Serialized Inventory
• Support for Multiple Warehouses
• Support for Barcoding
• Support for Warranty Tracking
• Support for Fully-landed Costing
• Designation of Alternate Vendors
• Storage of and Support for Pictures of Items
• Tracking of Shelf Life
• Support for Demand Forecasting
• Item-Specific Commission Rates

Microsoft Dynamics GP provides a strong feature set with respect to inventory and offers more robust functionality as compared to QuickBooks in this critical area. By taking advantage of the inventory functionality enabled in Microsoft Dynamics GP, businesses are able to effectively optimize their investment in inventory, while providing customer service and satisfaction.

Advanced Warehousing and Distribution Functionality is Required

While QuickBooks allows users to establish multiple price levels for a given item, the number of price levels is limited to 100. Accordingly, a warehousing/distribution company with more than 100 customers – each of whom might have a different pricing structure – may not have the capability of storing all customer-specific pricing data in the application. If this is the case, manual overrides of system-generated pricing would be required at the time of sales order or invoice entry.

Another QuickBooks limitation with respect to warehousing/distribution organizations arises with respect to reordering inventory items. Though QuickBooks can automatically generate purchase orders directly from individual sales orders and estimates, there is no provision in QuickBooks to automatically create purchase orders based on predefined stocking levels associated with each inventory item. Thus, manual purchase orders must be created periodically in order to ensure appropriate quantities of inventory are on hand.
Likewise, it is also not possible to automatically create purchase orders for drop-ship sales orders in QuickBooks.

Additional limitations facing QuickBooks-based warehousing/distribution companies include:

• No support for confirm pick operations
• No support for confirm ship operations
• A limit of 14,500 inventory items
• No warehouse management tools to assist with warehouse layouts, picking methods, and movement processes
• Lack of web-based access for reporting, customer self-service tools, and online inquires
• No lot tracking capabilities
• No support for “ship complete” customers
• No support for blanket purchase orders
• No support for RMAs, and
• No support for demand forecasting.

While some or all of these features may not be desired or necessary in small warehousing/distribution businesses, lack of these features creates significant inefficiencies in growing warehousing/distribution organizations.
Fortunately, Microsoft Dynamics GP provides robust functionality addressing the issues outlined above. As such, it offers a reasonable upgrade for current QuickBooks based companies to assist growing organizations meet the customer service, inventory management, and financial reporting challenges presented to warehousing/distribution firms.

Your Client has Expanded Internationally

A key challenge faced by many growing businesses is how to address the issues associated with doing business abroad. Issues that may arise include:

• The potential need for language-specific user interfaces to accommodate foreign workers
• The need to denominate transactions in currencies other than dollars, and
• The requirement to record local taxes, such as value added taxes (VATs).

QuickBooks is lacking in international accounting capabilities.

• First, though QuickBooks is sold in several international versions – Canada, United Kingdom, Australia, Thailand, and New Zealand for example – multiple international versions cannot share the same data file. Thus, it would not be possible to mix-and-match US-based versions of QuickBooks with any international versions sharing the same database.

• Second, QuickBooks does not currently provide for any foreign currency support in the US edition. Therefore, in the event a US-based business needed to denominate certain transactions in foreign currencies, users must make all relevant calculations outside of the application and then manually post entries into QuickBooks to reflect any gain or loss on foreign currency adjustments.

• Third, QuickBooks does not provide any support for multi-language user interfaces. In the event a small business desired to have both English and Spanish user interfaces available to employees, such functionality is not offered by QuickBooks. This contrasts to other entry-level accounting applications such as Microsoft Office Accounting Professional 2008 (English and Spanish) and Simply Accounting (English and French).

Each of the above issues might restrict a growing business from reaching its’ full potential.
Accordingly, many businesses faced with these challenges switch to an accounting solution that is flexible and customizable to their specific needs, such as Microsoft Dynamics GP .

Microsoft Dynamics GP is ready to work around the world to meet the international needs of growing businesses, as each of the above challenges is resolved in Microsoft Dynamics GP. First, with respect to availability across regions, Microsoft Dynamics GP is available in the following countries and geographic regions:

• Australia,
• Canada,
• Ireland,
• Latin America, including the Caribbean and Mexico,
• Middle East, including East Mediterranean, Egypt, Gulf region, and Saudi Arabia,
• New Zealand,
• North, West, Central, and East Africa,
• South Africa,
• Southeast Asia,
• United Kingdom, and
• United States.

Additionally, Microsoft Dynamics GP is available in the following languages: US English, International English, French Canadian, and Latin American Spanish and multiple languages can be mixed in the same installation. Even in a single country, single language installation, Microsoft Dynamics GP supports foreign currencies.

Your Client Needs Additional Financial and Operational Reports beyond What QuickBooks Provides

Issue: Reporting Periods

QuickBooks is a date-driven system which bases its reporting structure on transaction dates as opposed to accounting periods. While reports can be generated based on any d ate range, common fiscal period structures like a 4-4-5 reporting calendar where each period contains either four or five weeks of activity cannot be accommodated easily in QuickBooks.

Microsoft Dynamics GP can be configured to use almost any reporting period desired, including 4-4-5 fiscal periods, 13 periods of four weeks each, and other user-defined periods. These same fiscal accounting periods are used for budgeting, forecasting, and reporting, and all are accessible through both proprietary and most third party report writers.

Issue: Grouping of Data on Reports

Most of the financial statement presentation in QuickBooks is hard coded and cannot be changed. While QuickBooks has the ability to prepare both single-step and multi-step income statements the list of account types (e.g. Bank, Accounts Receivable, Other Current Asset, Cost of Goods Sold, etc.) used for summarizing financial reports cannot be customized.

Accordingly, users in many specialized industries (such as financial services or computer software) and users with complex financial presentations (such as assets held for sale, discontinued operations, or an extraordinary item) can change neither the basic names of many financial statement captions nor the order or presentation of financial data from within the application.

Issue: Reporting on Business Segments

QuickBooks provides for segmented or departmental reporting with an additional reporting field called Class. A Class is an alphanumeric field which identifies a segment, cost center, profit center, or other reporting unit and is used to segment financial information on the income statement only; the use of Classes to segment financial data is not supported on QuickBooks-based balance sheets. QuickBooks transactions can be assigned to one and only one Class or Subclass in the financial reports, and there are no provisions for using wildcards to select multiple Classes for a single transaction (e.g. assigning a transaction to a profit center and a transaction type simultaneously), and then creating reports based on either transaction group.

Microsoft Dynamics GP allows complex account structures with an elongated number of characters for the account and multiple discrete segments. These segments make it possible to group, select, and analyze transactions using this dimension alone.

Issue: Customizing Reports

QuickBooks Pro and Premier offer numerous reports with some degree of customization available. Custom reporting by adding or removing fields to a standard report is possible in some cases; however, many common reports cannot be customized in the report writer and instead require the user to export the data to a spreadsheet and manually sort and group data into the desired presentation each time an updated report is needed. While output to an intranet or to a portal is possible by saving a file to Excel or PDF, there is no simple way to schedule groups of reports in QuickBooks or easily provide for up-to-date key performance indicators (KPIs) on an intranet, as can be accomplished with the Report Scheduler and the Business Portal in Microsoft Dynamics GP.

Issue: Reporting and Using Statistical Information

Many organizations track non-financial metrics of business performance and create daily, weekly, and monthly reports based on these KPIs. QuickBooks does not provide a supported method for tracking and reporting on non-financial information such as headcount, square footage, units sold, customer counts, or calculated ratios. As mentioned previously, Intuit includes the QuickBooks Financial Statement Designer with certain versions of QuickBooks, but the lack of support for tracking and reporting non-financial information in the accounting application makes it difficult, if not impossible, to report on these statistics without manually inserting the information each time a report is prepared.

Microsoft Dynamics GP provides flexibility and control over reporting of these key amounts, ratios, or KPIs by allowing Unit Accounts for non-financial information in addition to the standard Posting Accounts.

Issue: Allocating Expenses to Profit Centers

One of the issues associated with having multiple profit centers is allocating shared expenses and other transactions and account balances. Though QuickBooks allows transactions to be posted directly to a profit center (or Class), it does not provide for automatic allocation of these expenses.

Issue: Consolidated Reporting

Though QuickBooks uses Classes to address the issue of segmented reporting on the income statement, in QuickBooks Simple Start, Pro, and Premier consolidated financial reporting is not supported. Consolidated financial reporting is supported to a limited degree in QuickBooks Enterprise Solutions, as consolidating of up to five entities is supported in that edition of QuickBooks.

Microsoft Dynamics GP provides combined and consolidated financial reporting through numerous applications such as the native Report Writer, the Advanced Financial Analysis module, or solutions such as Microsoft FRx. Further, the industry-standard Microsoft SQL Server database platform simplifies the process of connecting almost any Open Database Connectivity (ODBC) standards-compliant application to a Microsoft Dynamics GP database, and as a result, Microsoft Dynamics GP data can be accessed by many Windows applications, including Microsoft Office and Crystal Reports. This means that end users can even use familiar tools such as Microsoft Excel to develop and present consolidated financial statements and other reports.

Issue: Budgeting and Forecasting

When a business grows to the point that it has multiple users of financial information or multiple profit centers in the company, the company’s management needs to be able to create automated budgets and forecasts based on user-defined criteria. The QuickBooks budgeting tool provides one simple budget for each fiscal year based on a monthly r eporting period. However, a growing company may need multiple budgets for different purposes such as an external budget for banks, a more challenging internal budget for the officers and board of directors, and an even more stringent budget for profit center managers. QuickBooks does not support this functionality directly, nor does it support the reporting or budgeting of non-financial key performance indicators such as unit sales.

Issue: Analysis Tools and Alternative Output Formats

The primary analysis tool for QuickBooks-based data is exporting prepared reports to Microsoft Excel spreadsheets. While it is possible to access and analyze data with tools such as PivotTables, ODBC database queries, and other advanced methods, all of these tools require the user to have either QuickBooks Enterprise Solutions or third-party add-in applications.

Microsoft Dynamics GP provides robust and flexible financial and operational reporting based on industry standards such as Microsoft SQL Server, XML, and exporting to the entire Microsoft Office suite of applications. Microsoft Dynamics GP even includes a tool designed to retrieve data from a Microsoft Dynamics GP directly into a Word document, an Excel spreadsheet, or a PowerPoint presentation.

Your Client Needs More Robust Customer Relationship Management

QuickBooks offers a summary customer page which shows estimates, sales orders, invoices, credit memos, and customer payments on one screen. Users can also create notes to document interactions with customers which are reflected in the customer’s profile. Vendor and customer addresses in QuickBooks can be synchronized with addresses in Microsoft Outlook 2000 and later.

While these features enable some information to be associated with customers, it does not provide basic CRM functionality, which typically includes at a minimum:

• Prospect and active customer tracking, including links to all correspondence to and from a customer and a common contact database.
• Sales force and sales process management.
• Customer note tracking so others can effectively work with a customer.
• Automating and tracking of routine correspondence with customers.

Microsoft Dynamics CRM is the CRM application integrating with Microsoft Dynamics GP and providing full CRM functionality throughout growing organizations. Dynamics CRM provides a centralized repository for current and prospective customer information, including:

• Sales Management
o Lead and opportunity management
o Contact and account management
o Tracing the stages of the sales cycle
o Maintaining a database of product information which is easy for the sales force to access (either in the office or from a remote location)
• Customer Service Management
o Case management
o Service scheduling
o Service contract management
o Knowledge base maintenance and creation
• Marketing Automation
o Create, analyze, and segment targeted customer lists
o Plan and execute campaigns for targeted customers
o Marketing planning and budgeting
o Creating and maintaining lists
o Planning and creating campaigns
o Executing and managing campaigns
o Tracking marketing information

Link to: Microsoft Dynamics GP Product Page