Solutions. QuickBooks to ERP. Enable Business Growth. White Paper. AcumenIT

Transcription

1 Solutions I QuickBooks to ERP Enable Business Growth White Paper

2 Introduction QuickBooks, with more than 4.5 million users, is the most popular small business accounting system in the world. QuickBooks provides a good value and a reasonable set of features to meet the needs of small businesses. QuickBooks is a good starting point, but many organizations fail to recognize when their business needs have outgrown this simple solution. While QuickBooks offers a good entry-level solution, many growing and larger companies find that its many limitations prevent growth and agility. Every growing organization reaches a tipping point where the tools and processes that supported their initial growth begin to hinder their ability to operate efficiently. When your business begins to diversify and grow in complexity, you need more than basic bookkeeping and backward looking reporting. You need a complete business management solution that will automate financial processes, provide management and executives with timely information, eliminate errors, reduce risk and fraud, offer advanced functionality to address other business requirements, integrate with other business systems, and enable growth. To drive and sustain growth, businesses need to equip their people with the information and tools they need to work more efficiently and improve business performance. Growing companies must replace QuickBooks with a business management solution that is capable of integrating and supporting all of the various business functions and processes. This business management solution is commonly referred to as ERP (Enterprise Resource Planning). Every growing organization reaches a tipping point where the tools and processes that supported their initial growth begin to hinder their ability to operate efficiently. When your business begins to diversify and grow in complexity, you need more than basic bookkeeping and backward looking reporting. How Do You Know When You ve Outgrown QuickBooks? Some companies have been able to push QuickBooks far beyond its intended use by building manual systems in Access or Excel, for example. These systems sometimes allow companies to continue to use QuickBooks and delay the purchase of a new system. However, at some point QuickBooks simply becomes too inefficient. Growing companies often don t realize how crucial business software is to enable growth and expansion. This is especially true for a company s accounting department where even the most subtle growth in productivity can mean an exponential increase in workload. Is your accounting department wasting valuable time doing double data entry or trying to configure QuickBooks to do things it wasn t designed to do? If you identify with any of the following scenarios, it s time to graduate from QuickBooks to a more complete ERP business management solution. Performance Eventually QuickBooks users may begin to notice a decline in performance, including a delay in the solution's menus and reporting functions. Most companies using QuickBooks tend to notice such problems when the file size reaches 250 MB or when the total number of transactions exceeds 32,000. Significant performance problems usually occur when any list (customers, 2

3 vendors, employees) exceeds 10,000. An advantage of moving to an ERP system is the scalability of the database like Microsoft SQL Server database platform enabling it to house several terabytes of data without a decrease in performance. Audit Controls Growing companies need a double-entry accounting system that allows them to comply with government regulations, industry standards, and corporate quality initiatives. QuickBooks is a single-entry accounting system meaning it doesn t feature audit controls. Audit controls keeps record of every transaction entered into an accounting system so the account balance can be traced back to the transactions that make up that balance. Double-entry ERP accounting systems ensure transactional integrity by providing an audit trail for every change or transaction. This compliant ERP solution helps management protect company assets from inappropriate use or loss. User Security QuickBooks has a very simplistic security system. As companies grow, they continue to define the accounting roles to create better internal controls. For example, organizations should separate the invoice creation process from the cash receipts process. Also, new vendor setup should be separate from the invoice creation and bill paying processes. This separation of duties should allow for more granular security to ensure that users are authorized for specific access in the accounting system. Reporting The simple reports available in QuickBooks may not provide an accurate view of your organization. Oftentimes, QuickBooks users have customer and revenue data in supplemental systems. Creating a detailed report that provides you with all the information you need requires a lot of time spent manually entering data from one source to another. QuickBooks reports can take an unacceptable amount of time to run, print, or export to Excel. Users can get frozen out while the reports run. ERP solutions feature several ways for management to gain insight on real-time financial status and operational performance. Spreadsheet Reporting Businesses that run QuickBooks inevitably reach a stage where employees are relying on spreadsheets to plug the information gap because data is scattered across the business in multiple systems. Often, there are employees that need access to financial information who don t have access to QuickBooks, or they use Excel when they are out of the office because they can t access QuickBooks remotely. Because there is no one place to keep it, data simply ends up in spreadsheets. The result is that your employees are spending more time hunting for data than making decisions on it. Multiple Reporting Entities There are no provisions for multiple reporting entities in QuickBooks. You have to create separate companies for each entity and do your reporting outside of QuickBooks. Once you create a new company in QuickBooks, there is no way to share customers, vendors, or employees, so you are required to set those up again in each new company. Outgrown QuickBooks? Is your accounting staff wasting valuable time doing double data entry or pushing QuickBooks to do things it wasn t designed to do? Does your reporting give you the visibility and accuracy you need to run your business? Do users experience performance delays with menus, reports, navigation? Are your auditors concerned about your financial controls or lack of security and compliance features? Does your finance and accounting staff spend significant time outside of QuickBooks using paper or Excel spreadsheets? Do you need to manage complex processes that QuickBooks cannot support? Do you need to integrate QuickBooks with other business systems? Do you have multiple lines of business and need to centralize your data? 3

4 Scalability As you expand product lines and enter new markets, your business processes become more complex. With basic accounting software like QuickBooks, even the simplest processes, like invoicing and month-end closing can take hours even days to complete. You need the business process automation that an ERP solution can provide to handle growth and be competitive without increasing headcount and adding to your payroll. Unable to Lock Down Closed Periods It is common for someone to enter a transaction into the wrong accounting period; either by month or year. These accidental postings can be difficult to track down and correct. They often come to light at the end of the year when you realize that your prior year's retained earnings don't agree to the prior year's financial statements or tax return. More Than 5 Users QuickBooks generally becomes problematic when you reach five business users. The activity level from more than five users bogs down the database manager in QuickBooks resulting in the disconnection of users from the system and sometimes, a corrupt database. If you are close to five users now and are growing, you should start to evaluate a more robust ERP system that can accommodate additional users. Remote Access The desktop versions of QuickBooks only work well when you have an internal network drive on which to store the application and database. QuickBooks starts to have limitations when a company needs to have multiple users access the system from remote locations simultaneously. Work with Accounting Professionals Most accounting professionals have experience with systems that are more comprehensive than QuickBooks such as Microsoft Dynamics GP or Infor Visual. They expect a tool that will allow them to do their jobs efficiently. Accountants become frustrated very quickly when trying to institute controls and closing procedures in QuickBooks. Top Business Issues That Drive ERP Adoption 1. Need to manage growth expectations 2. Must reduce operating costs 3. Need to be easier to do business with 4. Interoperability issues across multiple locations 5. Must improve customer response times Source: Aberdeen Group Integration to Critical Business Applications Companies often invest in custom applications that handle very specific areas of their business. And from the beginning, these custom programs are manually integrated with QuickBooks. Eventually this can become unmanagable too frustrating, slow, and kludgy. Moving to an ERP solution enables you to integrate more easily and seamlessly with most third party applications, allowing you to address critical requirements while improving controls. Equity Event If the organization is preparing for or foresees an equity event, it would be advantageous to have certain controls in place. Due to the lack of key controls in QuickBooks, outside investors and advisors may not be able to rely on the data contained in QuickBooks and this could jeopardize the equity event even before it happens. 4

5 Value and Benefits of ERP The main benefit of ERP software is that it integrates the flow of information between various business processes and integrates business transactions with your company s financial system in real time. ERP software enables improved business decisions by making information from various parts of the business available throughout your business operations in real-time. It posts relevant business transactions to the general ledger and other financial systems allowing management to see financial implications in real time. ERP software covers all business processes starting from sales order entry, shipping/delivery, product pricing, warehousing and inventory, procurement, production, invoicing, service, financials, HR/payroll, project accounting, and more. Startups and small businesses often lack well-defined processes, roles, and workflows. It s not unusual to see these businesses staffed by numerous workers that act as jacks-of-all-trades. This is at the core of what makes so many small businesses successful: that is, these companies have individuals who are always willing to roll up their sleeves and dive into any aspect of the company to keep things running. But as the business grows, work and work processes will undoubtedly need to be better defined and better controlled. Companies must drive greater reliability, higher efficiency, and increased effectiveness of all of its workers and work processes. ERP solutions are especially well suited for this type of environment. These processes provide for tighter controls over sales, customer service, purchasing, inventory, shipping, production, payments, receivables, and finance. Example When entering a sales order, the customer service person can see the available inventory for the sales order in the various warehouse locations. If no inventory is available at the time of the order, the ERP system can allocate planned production or planned purchases, or estimate when a make-to-order could be completed by your manufacturing operations. ERP can also apply the proper pricing for the applicable customer, sales tax, and shipping charges, and determine promised delivery date. Once the order is entered, the ERP system reserves the inventory to fulfill the order. The system then automatically plans the required production orders to replenish the sold inventory and related external purchases of raw material (or finished goods depending on whether you make the product in-house or buy it from supplier). ERP Benefits Increased sales Streamlined order processing Improved customer satisfaction Reduced lead time Increased productivity Improved quality Reduced operating costs Increased working capital Faster cash collections Increased inventory turns Decreased inventory on hand Reduced stock outs Reduced shrinkage Establish uniform processes Improved financial reporting Increased employee productivity Gain competitive advantage Regulatory compliance Reduce redundant data entry 5

6 QuickBooks to ERP Transition Typically, a company begins to consider a transition from QuickBooks to ERP when its current business operations are causing it to suffer unbearable and costly pain. In most cases, unbearable pain becomes manifest through some combination of business process inefficiency, reporting limitations, inability to support growth, and exposure to excessive risk. The starting point for ERP selection is an internal due diligence process designed to discover and document all critical business processes and ERP requirements. An effective assessment requires a deep understanding of business operations and ERP capabilities in order to determine how those capabilities are likely to translate into benefits, costs, and risks given a company s particular circumstances. Business Process/Systems Review (BPSR) This form of internal assessment is intended to identify, define, and document all of the critical business requirements for ERP. This includes a complete review of business processes as well as IT/server systems that support the business applications. The result is a comprehensive report that documents workflow, processes, and reporting requirements and provides a complete set of ERP requirements that can be given to the ERP vendor to communicate needs. It can also include a software Fit/Gap Analysis that catalogs identified disconnects and shortcomings of the current software as matched against the primary functional requirements of the business. Critical elements in a BPSR include: Corporate growth objectives and business models Reporting requirements Business process analysis Performance improvement requirements Internal control and risk management requirements IT systems and technology requirements An AcumenERP Senior ERP Consultant / Business Analyst can help you perform an assessment on your QuickBooks environment and business processes to document problem areas and inefficiencies that are preventing your business growth. Following the on-site assessment, findings and recommendations serve as a guide for future planning. A BPSR can be customized to meet your unique needs or focus on a specific business process. A BPSR will help you maximize your investment in ERP and ensure a smooth QuickBooks to ERP transition. Due Diligence An effective assessment requires a deep understanding of business operations and ERP capabilities in order to determine how those capabilities are likely to translate into benefits, costs, and risks given a company s particular circumstances. Best Practice Conducting a Business Process/Systems Review (BPSR) with a Fit/Gap Analysis can ensure all requirements are identified and documented correctly providing a comprehensive template to manage software and vendor evaluations more effectively. 6

7 Conclusion As a complete and auditable system of record, ERP has the ability to help organizations gain visibility into operations, streamline processes, promote efficiencies, manage demand, increase employee productivity, service customers, and cut costs. Truly ERP has the ability to transform growing businesses into ones that can perform on a larger scale. The more time, effort, and focus that is dedicated to the front end of the ERP selection process to identify critical business requirements and analyze corporate growth objectives, the more the ERP solution will deliver substantial ROI and competitive advantages. ERP represents a serious investment in capital and resources for any organization, and it is vitial to the future success of the business. Successful companies are approaching the QuickBooks to ERP transition process with a structured methodology and clear plan to identify the right solution, affect a smooth implementation, and immediately begin to help accelerate business growth. Migrating from QuickBooks to ERP is easier than you may think. Today s mid-market ERP solutions offer easy import for your QuickBooks data. Using template-based setup, step-by-step checklists, and specialized QuickBooks training resources, data can be migrated to the new ERP software easily and employees can quickly adapt to the new system. With 24/7 access to online training tutorials, employees can get fast answers to common questions and learn to navigate the new system easily. Methodology Matters The more time, effort, and focus that is dedicated on the front end of the ERP selection process to identify critical business requirements and analyze corporate growth objectives, the more the ERP solution will deliver substantial ROI and competitive advantages. QuickBooks to ERP For more information and resources about how you can enable business growth and transition from QuickBooks to ERP, visit: 7

8 About AcumenIT AcumenIT is a business consulting firm headquartered in Greenville, SC dedicated to providing industry-leading ERP solutions to mid-market companies. AcumenIT specializes in helping companies automate and integrate business processes to reduce costs, operate more efficiently, gain a competitive advantage, and enable growth. AcumenIT s approach is a deliberate focus on Business Performance Improvement (BPI) through the effective use of technology to help clients gain a greater alignment between business strategy, process, and technology. AcumenIT is a Microsoft Gold Certified Partner and Infor Channel Partner. AcumenIT is closely aligned with Microsoft, Infor, and other Independent Software Vendors (ISVs) to help clients standardize on industry leading midmarket ERP products and business solutions. As the name indicates, AcumenIT specializes in the implementation, training, and support of ERP solutions. Our experienced staff of consultants has successfully completed more than 300 implementations of ERP solutions including many QuickBooks to ERP transitions, and our proven methodologies ensure projects are completed on time and on budget. The Acumen Approach The better your systems are designed to support your business strategy and processes, the more effectively you can improve employee productivity and business performance. Toby Stansell President & COO AcumenIT Contact AcumenERP Ray Scarborough Business Development & Operations Manager AcumenIT Ray.Scarborough@AcumenIT.com For more information about AcumenIT, visit or call AcumenIT. All rights reserved. The information contained in this document represents the current view of AcumenIT on the issues discussed as of the date of publication. Because AcumenIT must respond to changing market conditions, this document should not be interpreted to be a commitment on the part of AcumenIT, and AcumenIT cannot guarantee the accuracy of any information presented after the date of publication. This White Paper is for informational purposes only. ACUMENIT MAKES NO WARRANTIES, EXPRESS, IMPLIED, OR STATUTORY, AS TO THE INFORMATION IN THIS DOCUMENT. Complying with all applicable copyright laws is the responsibility of the user. Without limiting the rights under copyright, no part of this document may be reproduced, stored in or introduced into a retrieval system, or transmitted in any form or by any means (electronic, mechanical, photocopying, recording, or otherwise), or for any purpose, without the express written permission of Acumen. 8