Summary: QuickBooks Enterprise’s basic manufacturing capabilities are a good starting point for new companies. But the famous (and dreaded) “QuickBooks ceiling” kicks in at the worst time: when your business is extremely busy and stretched thin. Here’s how to identify whether you’ve hit the QuickBooks ceiling, along with a good method for assessing manufacturing software for small businesses.
Years ago, you started with QuickBooks because that’s what everyone recommended for new, tiny businesses. (Fun fact: that’s still what everyone recommends for new, tiny businesses.) Over the years, you progressed through QuickBooks’ offerings as your company grew, and now you’re on QuickBooks Enterprise.
Maybe you heard about the “QuickBooks ceiling,” but you put off that issue for another day. Now you’re worried that “another day” is today.
Is it?
Let’s Talk About the QuickBooks Ceiling
There’s one guaranteed sign that shows your company has hit the ceiling: your software performance tanks. Instability arises when you have about 25K inventory items, 2GB files, or 1M transaction lines. At that point, your software starts crashing, certain reports never finish running, and data corruption headaches become migraines.
Bad place to be.
However, since QuickBooks isn’t a perfect fit for manufacturers to begin with, manufacturing companies start outgrowing QuickBooks Enterprise much sooner than that.
Manufacturers can tell they’ve hit the ceiling when their business is falling behind because:
- They need deeper insight into job status to address bottlenecks
- They need to accurately compare costs vs. budget in real time to avoid margin erosion
- They need real multilevel BOMs because nested subassemblies have led to stockouts
If any of those made you cringe (or think, “Wow, I can do that?”), it’s probably time to get yourself a manufacturing ERP. It’s a lot better than relying on QuickBooks’ bolted-on manufacturing capabilities.
How to Assess Your Options for Manufacturing Software for Small Businesses
Picking out new software when you’re overwhelmed already can seem like an impossible task. Relax. It’s not impossible; it just requires you to identify what you need and which options can do that. The steps below should help.
Step 1: Narrow Your Focus
Let’s clarify our terms. When you’re choosing actual, purpose-built manufacturing software, you have to choose the software that’s geared for your kind of manufacturing.
I’m an expert in discrete manufacturing software, specifically Sage 100, which is the go-to solution for make-to-stock (MTS) manufacturers, assemblers, fabricators, and manufacturers with high inventory levels.
ERPs can focus on any kind of manufacturing operation: process manufacturing, engineer-to-order (ETO), pharmaceuticals, food and beverage, etc., so make sure you work with experts who understand your specific needs.
Step 2: Identify Your Current Issues and Solutions
It’s important to ensure your new software can solve the problems you’re experiencing with QuickBooks right now. A quick Problem/Solution document helps with this.
Earlier, I listed some examples of where QuickBooks Enterprise hits its limits. Below, I’ve created a sample Problem/Solution document that lists those current problems in QuickBooks, along with their solutions using Sage 100 with Production Management.
- Job status insight (Tip: use a 2-3-word headline for each section of your document so you can easily find things in it.)
Problem: Right now, in QuickBooks, I can’t see stages once a job has started. Because of that, I can’t see which subassemblies are taking the longest, and I don’t know where to allocate staff.
Solution: In Sage 100 with Production Management, I would be able to see detailed job statuses in real time (meaning I can track items through each assembly stage) and have greater clarity on where to assign additional labor.
- Profitability control
Problem: Right now, in QuickBooks, I can view estimated costs, but tracking overruns is difficult. I’ve had a few margin surprises.
Solution: In Sage 100 with Production Management, I would be able to work with real-time numbers for my jobs, covering labor, materials, overhead, and direct AP costs. I could adjust these numbers as needed and compare costs vs. budget in real time.
- True multilevel BOMs
Problem: Right now, in QuickBooks, I’ve been running into stockouts due to a perfect storm of nested subassemblies and my hardworking but exhausted office manager. If she forgets to add just one subassembly to a large order, the system doesn’t roll up material requirements properly, and I’ve been left scrambling for supplies more often lately.
Solution: In Sage 100 with Production Management and Bill of Materials, I could get a true, multilevel BOM that captures the whole hierarchy of subassemblies and assemblies at once. It would roll up into a single material requirements list, so I can order accurately and avoid stockouts or cost overruns from emergency expediting.
You understand the structure now? Trust me: this document will really help you. The best part is that you can work on it bit by bit, every week. Whenever you run into a QuickBooks issue, you can list it as a problem. And when you research manufacturing software for small businesses, you can list solutions as you find them.
Discuss Your Manufacturing Software Options
Word from the wise: you won’t be able to fill out all the solutions on your own. Most software companies don’t list in detail what their software can’t do, so at some point, you’ll want to consult with a software expert.
If you’re a discrete make-to-stock manufacturer, assembler, or fabricator, you can ask me or anyone at my company for help.
Whether you’ve already hit the QuickBooks ceiling or you think you may soon, my point is that you don’t have to worry. By following this process and documenting at least the “Problem” part of your Problem/Solution document, you’ll be well on your way to blasting past that ceiling and supporting your company as it continues to grow.
At that point, you can call in an expert.
