Ok, that title might be a bit dramatic but hear me out! If you're currently running a construction company, chances are you are using QuickBooks. QuickBooks controls over 70% of the small business accounting space across North America, this is huge! So what's the problem? Well, for one, the world has changed a lot since QuickBooks was first developed.
A quick history lesson on QuickBooks
When QuickBooks started way back in the 1980s the world was very different. Desktop software was a new thing. In fact, having/using computers at all was still a new thing. After the birth of the personal computer revolution, small businesses started adopting computers to assist with record keeping and operations. Because computers were first developed to perform repetitive calculations, it was only right that accounting software became the foundation for every business operation. And QuickBooks was one of the first solutions on the scene.
QuickBooks had led the way for generations as the number 1 choice for accounting software. As their user base increased, they also became the defacto standard for accountants. In fact, I couldn't get my personal accountant to switch our accounting to a different platform. He is just so accustomed to QuickBooks, he is reluctant to change what ‘works’. So what does this have to do with QuickBooks killing your construction business?
The Internet has changed the game for accounting systems
Unless you are living off the grid, you already know that the internet has revolutionized everything - and I do mean everything; from banking to taxis, to retail stores, everything. The accounting world is not an exception to this transformation. In the mid-2000s, other accounting systems started to really take advantage of having an internet-based platform or 'cloud-based’ as it is commonly called. These new cloud-based solutions completely revolutionized accounting systems and the workflow between business owners and accountants that existed for decades. It allowed accountants to work on businesses remotely, even from other countries and allowed banks to seamlessly integrate with the accounting system for reconciliation.
The Need for QuickBooks to catch up with its competitors
Let's face it, if you're the biggest in the industry, you will have targets on your back, and QuickBooks is the target of many competitors! It’s a classic David vs Goliath scenario, with slow moving giant QuickBooks defending itself against smaller, more nimble competitors who have been faster to adjust and accommodate for a more cloud-based business model. QuickBooks is struggling to keep up. They have been attempting to make a digital transformation, building their online product and trying to reach feature parity with the desktop equivalent as fast as they can, but the capabilities of the desktop version are still far superior to what they offer through the cloud. For that reason, many accountants and controllers are choosing to continue using the desktop version. In order for them to stay relevant from a business management perspective, QuickBooks has developed an online marketplace for other software solutions to integrate with their platform and create a more complete robust solution for businesses.
The benefits of QuickBooks Online
With any new technology, the challenge is always finding the innovators, the early adopters, the people that will take the arrows in their back for using your products (ok that last one might be extreme) but the point is you need users to adopt your software platform. QuickBooks has been doing just that. They have shifted their focus to a different audience for their online products. Generally speaking, the target audience is people with smaller companies that don't necessarily have dedicated accountants, that do much of their admin work from their mobile phones or tablets.
QuickBooks offers different plans for small businesses, so your available features are dependent on your plan, but all versions allow business owners to send estimates, track sales, send invoices and track payments.
Some of the more advanced features include the ability to track time and track inventory. There is also an add-on for a payroll solution that helps calculate tax, vacation and other deductions. It sounds like QuickBooks does everything, so why isn’t it the right choice for your construction business?
Why QuickBooks Online can't work for your Construction Business
Let’s say you've been in business for a while. You do your payroll, your bank reconciliation, your inventory management, bill payment all through QuickBooks desktop solution. Sure, there are a few things you would like to see improve, but for the most part it works! But now the sales and service people at QuickBooks are not so gently pushing you towards their cloud platform. So you start to look into it, and that’s when you start noticing there are still some features missing from the online version. Features that have become an integral part of your construction business process. Features that your controller and accountant require to ensure your business’ success. So how in the world can you switch to the new platform when you don't even have half of the features you need to run your business? And here in lies the problem!
QuickBooks is in a growth race, to own the internet accounting space, so they have to move fast. Their goal is to get as many customers onto their platform as fast as they possibly can. In some cases, it is to the detriment of the businesses they are servicing. If you ask me, most construction companies in the HVAC, Plumbing or Electrical business are still 3 to 5 years away from a smooth transition to the online platform. It's a problem.
QuickBooks has essentially abandoned the desktop version. They have not made any new innovations to this platform in years and any updates are only to correct existing bugs. Sure, they keep incrementing the number on the splash screen (the screen you see when you open QuickBooks for the first time), and they've made some stability improvements, but the limitations of the product still exist. If you're in the pro version, you are still limited to 14,500 inventory items, after which you have to upgrade to "Enterprise" which sounds great, except you still have huge multi-user support issues, run the risk of data corruption and remote access challenges.
But wait, there's hope! Alternative solutions to QuickBooks Online
We've already established that QuickBooks online is not the solution for your construction business, so let's not go there. So then what's the answer, another accounting software? Maybe, but honestly, this will depend on your specific business needs. I can't personally recommend any accounting software for you because I'm not your accountant. What I can say is that there are other accounting solutions that have feature parity with QuickBooks that you might want to look into. The important thing is that they have a cloud-first model i.e. it works through a browser, which will give you maximum flexibility.
In the meantime, there are alternative solutions that can keep you running – and growing - for at least the next 5 years, while you wait for QuickBooks to get you the features you need to make the shift. SnapSuite provides the ability to sync and back up your QuickBooks data to the cloud - an online database. I know, or at least I hope, that you're already doing some form of regular QuickBooks backup, but this is different. What SnapSuite does is extract the data from QuickBooks and sync it to a real-time cloud database. This means, not only can it sync with our own software for billing, purchase orders and payments; but we can also give you access to your QuickBooks data online, which would be much faster than your actual QuickBooks Desktop System. This also means that if your QuickBooks file system fails, we have a fully updated synced copy in the cloud so we can either repopulate your QuickBooks in full or we can push the data to another accounting system of your choice (anything cloud-based accounting system of course).
When we developed SnapSuite to help contractors and business owners in the skilled trade sector, one of our primary goals was to truly understand their pain points and challenges and moving to cloud-based accounting software is definitely one of the top challenges. Our goal was and still is to provide solutions that can help contractors in the skilled trades slowly migrate their business over time. If you have field workers and sales staff that still prefer paper documents, no problem. We can help you transition to a digital system that allows for that. If you want to continue to use QuickBooks Desktop, then do so. We can help you stretch more life out of your existing investment. The important thing to understand is that this is a no-compromise solution; SnapSuite’s custom tailored solutions give you the best of both worlds.
If this is a challenge that resonates with your current business, feel free to contact us for a free no-obligation consultation. We are more than happy to help.
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