For entrepreneurs and small business owners just starting out, spreadsheets work just fine. Spreadsheets can handle simple budgeting, invoicing and can even be used to track inventory.
As your business grows, you may turn to QuickBooks or similar programs such as FreshBooks. Accounting programs like QuickBooks are relatively inexpensive, easy to manage and can accommodate many different types of data and tasks.
Spreadsheets and QuickBooks are both great options for businesses of a certain size, sole proprietors, consultants and other entrepreneurs.
As your business continues to grow and expand, however, the limitations of these tools become apparent. You may find yourself trying to use multiple, unwieldy spreadsheets or documents to forecast sales, plan production and manage inventory.
Consider that accounting programs such as QuickBooks lack a solid inventory tracking program. QuickBooks can’t hold inventory data, adjust for quantities on hand or track purchase orders.
Perhaps the biggest challenge for a growing enterprise is that spreadsheets and accounting programs are disconnected from each other. They are not necessarily integrated with your entire operation. This can make ordering, forecasting, inventory control and invoicing much more difficult than they need to be.
The Signs You’ve Outgrown QuickBooks
Sooner or later, your business will outgrow spreadsheets and QuickBooks. But, how will you know when you’ve reached this point or are about to reach this point? These are the signs:
- It’s taking longer to reconcile your financials at the end of the month.
- Your sales forecasts are based more on guesswork than solid figures.
- You’re having trouble keeping up with orders.
- You’re uncertain how much inventory you have in your warehouse.
If this sounds like your business—or close to it—then it may be time to consider an ERP solution.
What is ERP?
ERP stands for Enterprise Resource Planning. Basically, ERPs merge accounting, financial, inventory management, marketing and sales functions into a single database and user interface. The goal is to provide a central repository for all information and to provide access to the information across departments.
ERP systems help companies of all sizes manage financials and assist in sales forecasting, manufacturing planning and execution, customer care and support and shipping logistics.
Not surprisingly, companies that manufacture or produce complex engineered-to-order products find ERP systems to be particularly useful. But, companies of all kinds, in a variety of industries, can benefit greatly from ERP.