Spark365
QuickBooks vs Business Central
for Managing Inventory (2021)
5 things to consider if you're a small business with inventory
Is QuickBooks the right choice for your small business inventory needs?
What’s appealing about QuickBooks is how user-friendly it is. It’s super easy to install and set up yourself. As a fast-growing startup, QuickBooks seems to fit the bill: It's affordable and DIY and gets the job done without expensive IT or consulting fees. It makes sense that you’d want to save money and do it all by yourself.
But there are a few things you need to consider before committing to the QuickBooks. A little foresight on how accounting software works with businesses in the long-term can help you make the best decision for your business now.
If you're a business that handles inventory, Microsoft Dynamics 365 Business Central is a powerful software to consider for your growing small business.
1. QuickBooks means you’ll be dealing with multiple systems
This is the number one headache of growing businesses. QuickBooks is limited to core accounting. But your business will have other needs. If you deal with physical goods, for example, you’ll need to manage your inventory, which is outside the scope of accounting. You can manage manually with Excel for a short while, but soon you need to start looking for an inventory solution. Since this is separate from QuickBooks, you’ll now have two different solutions. As you find solutions for other parts of your business operations, you’ll end up with a clunky cluster of add-on solutions that are tacked onto QuickBooks to make up for it can’t do.
Add-ons are imperfect because connecting separate technologies are inherently problematic. You’ll need to do double-entry or experience a delay in your data. This leads to additional cost, or worse, mistakes in your delivery.
Almost all small businesses need more than just QuickBooks, pretty quickly. Traditionally, companies tend to wait until they’re bigger to switch to an all-in-one solution.
But now, small businesses have the option to start early with an all-in-one solution. Microsoft Dynamics 365 Business Central has core accounting plus advanced inventory functionality (and many more). You can simply activate the functionality when you start to need them. It’s all in the same solution for a smooth experience, with real-time data.
2. QuickBooks lacks scalability
QuickBooks fits small companies -- up to a certain point. The truth is, QuickBooks is not designed to scale. If your small business deals with physical goods, and therefore inventory, your transaction volumes will increase rapidly, which means your data will too. The QuickBooks database is a single file that continues to grow over time. The larger the file becomes, the slower QuickBooks gets. As your company grows to above 1000 transactions per month and you have more people in your database, the file size outgrows QuickBook’s sweet spot of performance, slowing things down excruciatingly while also increasing your risk of data corruption.
You will get to a point where you must switch over. And it’s a lot harder to switch than you think. Companies don’t realize this until it’s too late: Once you’ve gotten to a point where you’ve outgrown QuickBooks, the migration process to a bigger solution is painful and exhausting.
Instead, you could start with a scalable solution from the beginning. Microsoft Dynamics 365 Business Central is designed and priced for small businesses in the way no other ERP has in the past. But provides you with scalability and saves you time and effort.
Dynamics 365 Business Central runs on Microsoft’s Azure cloud platform, an industry leader in data capabilities and can scale to support infinite transactions and users. So you never have to worry about scalability.
QuickBooks is a good fit for many small startups, but if you are a small company that is seeing growth and expecting more growth, it’s better to start with Business Central – the earlier the better.
3. QuickBooks lacks inventory transfer functions
If you’re a small business with inventory, your inventory will need to be transferred and managed. QuickBooks does not have inventory transfer functions, which means, you’ll need to find another solution to do this.
You may have multiple locations to store your products. For example, you keep samples and small volume products at your office or home. You might store large volumes or large-sized items at various warehouses in multiple areas closer to your customers. As you receive orders from all over the world, you need to transfer your inventories from one location to another. However, QuickBooks Online does not have multiple locations for inventory. Therefore, you cannot transfer inventory items from one place to another with the product.
Microsoft Dynamics 365 Business Central has multiple location and transfer inventory functions, along with various other inventory management functionality.
Business Central also tracks back-order purchases separately. Suppose you have six units of physical inventory in your office, and you receive an order for ten units. You are short four units. Let’s say you already placed a purchase order of four units to your vendor. You can reserve those four items for the order of ten units in advance. Generally, you can only reserve items if you already have enough inventory. With Business Central , you do not need a separate Excel file to record your stock. You can reserve specific inventory among your on-hand inventories. You can track items sent for outside repair as having a separate inventory status. And much more!
4. QuickBooks doesn’t offer pricing options
As your business grows, your customer list will grow. too. You will realize at that point that you may need a more complex pricing scheme. QuickBooks does not offer variable pricing.
As you service various types of customers and their shopping needs, you may have select group of customers that should get special discounts or pricing. Business Central offers different pricing options to make this possible. Business Central can also set pricing conditions so that a specific group of customers (the first condition) will receive a discount, but only when they buy specific items (the second condition). You can set up a price rule with these two conditions.
QuickBooks, except its very high-end version (QuickBooks Desktop Enterprise), does not provide such tailored functions. Which when you start needing more different pricing options you’ll have to switch from the basic QuickBooks to Enterprise-version. This is not an upgrade -- it would require a full data migration to a new system, which takes you back to reason #2 above.
5. QuickBooks is limited in serial number and lot number tracking
If your business handles physical goods, lot or serial number management and tracking can be a critical part of your daily inventory management. Winning customer’s trust is key for future repeat orders. When customers requests a specific lot for their order, you must fulfill the order with the correct lot.
Serial and lot number tracking is limited with QuickBooks Pro. For example, QuickBooks does not allow multiple lots for each line on a transaction. QuickBooks cannot auto-generate new lots and serial numbers. And QuickBooks does not prevent the entering of duplicated serials. Business Central, on the other hand, prevents duplicated serials either by auto-generating one or the system locks you from doing so by notifying you of a duplicate error.
QuickBooks does not let you choose to activate serial number tracking only for specific items. In Business Central, you can manage whether or not the lot/serial # is mandatory by item. You might not require tracking for both or either for every item. Business Central lets you customize your tracking on each item in this way. The system can assign which items are managed, and automate the process. The system won’t let the user move foward in the system if the lot/serial # is not entered as you’ve specified it into the system. The settings are built-in, so it’s impossible for the user to forget.
With Business Central, you can achieve all of these inventory tracking elements and much more. If your customer is asking for traceability, then you can easily pull the specific lot/serial number for the products you shipped to this customer. Business Central’s advanced inventory tracking will make meeting your highest standards of compliance and customer service simple, reliable and automated, so you can focus on growing your businesss.
Startups don’t always consider these points before signing up for QuickBooks. We get it. Being a startup means taking care of “right now” and you’ll deal with the future later. But technology for small businesses has come a long way. Now you have options – and you can choose what makes the most sense for your vision, your business, your style.
Business Central has you covered for all five on this list. And it’s affordable at $70 per per month. Most importantly, with Spark365’s simplified kits, Business Central is now Do-It-Yourself for a low fixed fee that fits a startup budget.
It brings the best of all worlds to you: rich functionality (for scalability), affordability and user-friendliness.
The table below shows for the inventory functions Included with Spark365's DIY Setup Kits for Dynamics 365 Business Central:
If you need any of the functions in the table above that QuickBooks Pro does not offer (Bin, Cycle Counting, LIFO Costing, Standard Costing), we offer additional consulting outside of our DIY Spark365 kits that can provide you this functionality within Dynamics 365 Business Central!
Contact us at info@spark-365.com for details.
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