We’ve said it before, and we’ll say it again一 QuickBooks is great for small, order-centric businesses, but your business will experience growing pains if you have a variety of billing models or recurring revenue.
Here are five signs your software company is outgrowing QuickBooks:
- Your Billing is Manual
QuickBooks isn’t made to handle the complex billing of the blend of products that software companies offer, including subscriptions, usage billing, services, training, and perpetual licenses. It can’t easily be integrated with Salesforce, and you can waste a lot of time manually entering information without that integration.
- Your Billing is Inflexible
Because business is constantly changing, flexibility with pricing is imperative. QuickBooks’ inflexibility makes it difficult to scale recurring, usage-based, or complex billing. This means you are unable to take advantage of new opportunities that could deliver more value to your customers
- You Calculate Revenue Recognition in Spreadsheets
The ASC 606 revenue recognition standard created a huge burden for revenue accounting. You need to know your contract assets and liabilities in order to comply with ASC 606. QuickBooks users are forced to manage revenue recognition and expense amortization in spreadsheets, which are just not scalable. Many companies get overwhelmed with constantly updating schedules in spreadsheets, but building end-to-end revenue management can save you hours of calculations.
- Your Reporting is Delayed
GAAP reporting is delayed because revenue is outside the realm of QuickBooks and must be entered in manually. SaaS metrics such as customer acquisition cost (CAC) and customer monthly recurring revenue (CMRR) take time to assess. If it takes two weeks to crunch these numbers after the close, there’s often little time for analysis before you need to deliver the metrics.
- Forecasting is Challenging
The future of your business should be at the forefront of your mind, so forecasting should be happening continuously and on-demand. Without forecasting, you have less business agility, slower business growth and decision-making, and capital consumption. However, piecing together multiple systems and spreadsheets can be burdening to your company.
It’s time to say goodbye to QuickBooks if these signs applied to you, but the good news is that your company is growing for the better! You could likely benefit from a solution that was built for subscription billing and ASC 606 compliance.
When you’re ready to graduate from QuickBooks, contact InCloud360 to explore cloud-based financial systems.
The information in this post was retrieved from Sage Intacct’s whitepaper “Is your software company outgrowing QuickBooks?” Please contact us if you would like a copy of the whitepaper.