So here you are, Small Business Owner. Off on your own, chasing the dream of running a successful enterprise. You’ve thought of everything: you have a product, you have a plan to get that product to people who want it, and you’ve even found your first customers. Just one question – how are your customers going to pay you?
Inevitably, you start scouring the internet, Google-ing your way through “Best accounting software” and “accounting?” and you’ve come to realize that there are a lot of accounting systems on the market. But you remember that commercial, the one from TV with Danny DeVito in it, for Quickbooks Online. Which leads to a quick google search of reviews.
G2 Crowd lists Quickbooks online at 4.5 stars. So, you start asking yourself, is this the one?
Is Quickbooks Online better than that other solution?
The answer is, predictably, “it depends”. Here’s why:
What is Quickbooks Online?
Quickbooks Online is the cloud-based accounting solution offered by Intuit, a slightly stripped-down version of the desktop Quickbooks application. It’s feature-rich, easy to use, and not especially expensive. For your early business, Quickbooks Online is a great solution, especially if the business is a one-person show.
Quickbooks Online is dead simple to set up. It comes with a good starter chart of accounts right out of the box, and there’s a huge online community of people who are there to help you get yourself established in the system. You can link your bank account and automatically download your transactions. The built-in payroll system is great for your early payroll cycles, and you can use Quickbooks as a credit card processor so your customers can pay you more quickly.
Most accountants available for hire to do some of your more complicated tax transactions is almost certainly familiar with using Quickbooks, and the built-in reports are good.
Quickbooks Online is certainly a great solution for your business as you grow, start hiring a team, and ramping up your sales cycle. Many of our own clients at Positive started their journey into accounting using Quickbooks, and we certainly prefer it over some of the other solutions on the market (Wave, Xero, Intacct, Freshbooks, etc)
If Quickbooks Online is so good for accounting and finance, then why did you indicate that “it depends”?
Quickbooks Online is a great solution for a small business, one that is a single legal entity, trading in a single country. In fact, when you look up the various software solutions in the same space as Quickbooks (especially in the Gartner Magic Quadrant) we are faced with a variety of software solutions focused on growth companies in a simple SaaS Model. There are options for scaling, and you can do a lot with them.
Where it starts to come up short though is when you start planning for the future of your company. Like, do you need to know what your cash-flow is going to look like in a couple of months? You’re going to need to build that outside the system. Trying to stick to a budget? Outside the system. Adding a second legal entity to capitalize on different markets? You guessed it, outside the system.
Quickbooks Online was built for small businesses
The reality is that Quickbooks Online really can’t scale as well as some other solutions, it just wasn’t built for that. As your financial requirements become more complex, you will find yourself building a lot of systems outside your accounting system, patching together a network of spreadsheets that makes your head spin. You may even hire a CFO, or retained a virtual one, who has built a great business model for your company but populating that report with actual financial data is a time-sync as you copy your figures over by hand.
Getting back to the original question, is Quickbooks Online better than other accounting software?
Sure, it’s better than a lot of solutions that are on the market, but does it do everything your business needs to succeed and grow? What we’ve learned at Positive is that our clients and partners often start on Quickbooks but soon discover that they need more.
They need is a more comprehensive, holistic system. That’s where enterprise-grade ERP (Enterprise Resource Planning) systems come in. Systems, like NetSuite (our product of choice at Positive) or SAP, are built for businesses that have outgrown Quickbooks Online. They offer specialized modules, which can be added or dropped from the solution based on the user’s needs. Budgeting and planning are built in, as is the ability to manage multiple legal entities in the same system with a lot of the consolidation work built directly into the core modules.
The bottom line…
Quickbooks is the top of the pyramid of entry-level accounting software solutions, that pyramid just happens to be down the block from a much bigger pyramid.