QuickBooks vs. ERP: What Are the Big Business Differences?

We’ve been asked, “Is QuickBooks an ERP?” QuickBooks is the go-to for many businesses to get their financial house in order, but there’s a time when that software can become far too burdensome because your success has grown so large. That’s a fantastic place to be in your business, but it often comes with increased difficulty in understanding your business and your bottom line.

If you’ve hit a speedbump and aren’t sure how to best use accounting software, or find yourself stuck too deep in the day-to-day tasks and looking for more automation, you might want to consider an upgrade from QuickBooks to an enterprise resource planning (ERP) system.

What Is QuickBooks?

In short, QuickBooks is a financial management suite that comes in a few iterations, such as QuickBooks Enterprise, helping businesses manage their income and expenses. Most often, businesses use QuickBooks to automate various financial processes. QuickBooks includes an array of tools that also plug into other software, so you can use it for business functions beyond those in your financial department.

Is QuickBooks an ERP System?

No, QuickBooks is a type of accounting software mainly used by small and medium-sized businesses to handle the financial aspects of running a company. You might use QuickBooks to manage sales and income, run payroll or prepare for tax season. ERP systems allow you to manage all of your company’s assets, not just finances.

At its most basic, without additional software integrations, the QuickBooks accounting system can only help you manage certain financial tasks.

Dive Into Account System vs. ERP

QuickBooks is a natural starting point for most businesses because they have relatively few enterprise resources they need to optimize. QuickBooks operates relatively independently of your other systems, and it is such a common small business standard that many pieces of software can use QuickBooks filetypes.

However, enterprise systems are mixed on their ability to directly integrate with QuickBooks — this matters because you’ll have to save a file, open it up separately, and then check to make sure everything copied okay, which can become burdensome for large databases or when using multiple platforms.

As your company grows and those difficulties increase, or your need for integration increases, you might want to consider an enterprise resource planning system, or ERP.

An ERP provides you with a single platform that manages your company’s assets. QuickBooks is a financial piece of software, so it only manages financial assets like your goods, inventory, and bills of sale. Powerful ERPs are not only able to track this same information, but they’re also able to integrate your marketing, accounting, strategic planning, sales, and other specialty platforms you may be using — all into one spot.

All of the QuickBooks products from Intuit are accounting platforms, and they should not be looked at as an ERP. The company even states this on its own website: “Is QuickBooks Desktop Enterprise an ERP System? Simply put, no.”

There are many different ERPs for different types of companies, with special offerings for manufacturers, eCommerce stores, publishers, and much more.

The Biggest Differences Between QuickBooks and ERPs

The most notable difference between accounting software like QuickBooks and ERPs is that ERPs allow businesses to manage and monitor processes far beyond their finances. ERPs have an array of capabilities that don’t require additional plugins for you to access them. While QuickBooks may help you tackle your finances, you won’t be able to do much more unless you connect it to other software.

ERPs include various functions, including but not limited to warehouse management, customer service, lot control, and more. Remember that these features are in addition to financial capabilities. As a result, ERPs can serve businesses as an all-in-one option for nearly all of their needs. Rather than switch between numerous software to complete daily tasks, you can complete processes in one centralized hub, helping you stay organized and efficient.

Signs You’re Ready to Upgrade From QuickBooks to an ERP System

Each company is different when it comes to the QuickBooks vs. ERP question, but there are some overall guiding principles that will help you understand if it’s time to upgrade from QuickBooks to an ERP system.

The first is a special word in the question itself, which you’ll find here and all over the Internet: “upgrade.” Almost all companies view an ERP system as an upgrade over QuickBooks because an ERP will offer a broader set of features and functionality. That means if you’re feeling limited by the capabilities of QuickBooks, you should consider the shift.

Another big factor is where you actually do a lot of your performance checks, reporting, and projections. If this has moved to Excel or other spreadsheet and database software, with QuickBooks serving more as your checkbook, you could choose an ERP that allows you to perform all of those tasks within a single program. That’s where the accounting system vs. ERP consideration can really make a difference.

Here are a few other key things that might indicate your company is ready for the upgrade:

• Billing clients is getting slower and more difficult.
• Data from outside of your system is becoming more important, but it can’t be added automatically.
• Financial reports aren’t easily formatted to what makes the most sense for your company.
• If you needed to know what your cash balance was right now, you’d have to spend 20 minutes checking QuickBooks and your accounts to make sure your answer was correct.
• Multiple transactions have to be entered each month from a variety of other systems.
• Orders come in multiple currencies or through multiple channels you have to manually process.
• You’re duplicating data entry across multiple systems.
• You have a growing team where a dozen or more users need to access your system with the most up-to-date information right when they need it.

Why Do Companies Use ERP Systems?

We’ve touched on some general areas where an ERP system performs better than QuickBooks, and that typically has to do with growth. For brands we see, and for your average company, that’s usually about the $5 million to $10 million annual revenue mark — but it could be lower than that for you if you work in an especially complex industry or if you’re running a tight ship with just a small crew.

Taking your business to the next level often means automating processes and integrating them so they’re easier to keep track of on a daily basis. That’s the main reason we suggest smaller companies make the switch to ERP. For instance, you’ll be able to process all of your orders and your returns in the same portal, which can automatically link to your inventory and provide alerts for when things are running low.

Some of the other reasons companies use ERP systems include:

• Better inventory management: Custom orders can be pre-programmed so they occur at a certain point or stock level. That way you never forget to order those items that only sell occasionally. Plus, you can track these versus your other sales to make sure you’re focusing on the goods that give you the best margin. That’s something you want to check when performing the accounting system vs. QuickBooks math.
• Growing business needs: ERPs can grow with you. Consider the FDM4 ERP software for apparel brands. We’re able to integrate multiple channels for a wide range of businesses, giving them functions they need as orders and sales increase. This can include the introduction of an e-commerce store for marketing and advertising.
• Simplified warehouse management: If you choose an ERP system that offers warehouse management system functionality or can integrate with WMS tools, then you have less to worry about in terms of data loss, training time, or in-house coding and development compared to implementing a new system that would work with QuickBooks.

Things to Keep in Mind When Upgrading From Quickbooks

Replacing QuickBooks with an ERP is a popular solution, as it allows them to manage various tasks in one place. If you’re thinking about making the switch to an ERP, consider the following points to ensure the transition happens smoothly:

• Plan for the switch: Transitioning to new software will always take time and effort, and you’ll likely run into obstacles along the way. You can make the upgrade easier by planning. Tasks like setting a budget for the ERP, educating employees, and more can ensure your business is prepared.
• Communicate across teams: Keeping everyone informed about the upcoming changes will ensure fewer hiccups occur. As you go through the motions, be sure to communicate with everyone about how the ERP will help and impact them.
• Look for a reliable partner: When shopping for ERP software, you want to keep an eye out for suppliers that care about your business. Look for software partners with years of experience, like FDM4, that are dedicated to helping grow your business. Having this support will make your transition even more worthwhile.

Is QuickBooks the Right ERP for My Business Needs?

FDM4 helps apparel and consumer goods businesses transform their operations with industry-specific software that integrates functions such as procurement, financial management, allocation, order processing, inventory, and freight. Our enterprise resource planning software helps simplify operations, leading to increased productivity and revenue growth.

If you work in the apparel or consumer goods industries, you’ll benefit from FDM4 in a number of ways. We’ve customized our software solution to meet the specific demands of inventory-based businesses — in fact, we’ve worked in apparel for 20 years and are the leading software provider for imprintables. 

When you’re ready to upgrade your operations software from QuickBooks, FDM4 is here to help.

How Our Turnkey Solution Works

FDM4 installs and supports pre-built and fully customized hardware and software options for clients. That includes integrating legacy systems you’d like to keep with your new FDM4 software. Should you require additional technical support once installation and integration are completed, we can supply that too.

With FDM4, you’ll be able to choose between hosting your own system on your existing network or leveraging our cloud-based application. Either way, you can integrate our operations system with the software of your choice, whether it’s legacy or brand new. FDM4 is a one-stop shop for operations software, hardware, and support, and it can:

• Improve warehouse efficiency: Warehouse slowdowns create internal challenges and negatively affect customer preference. With FDM4, you can upgrade to an automated inventory management program that will help your warehouse workers work more efficiently. For example, your new FDM4 software can recommend the right-sized shipping carton and even tell your employees which items should be placed in which boxes. Your employees can also process full-case and piece picks separately or pick a single order — whichever works best for your workflow.
• Help your employees do their best work: You already know that systems unable to grow as the business does create headaches for employees. Processes that can and should be automated instead result in unnecessary mistakes or slowdowns when software can’t keep up. FDM4 will help your employees do their best work because they won’t have to manage time-consuming processes such as converting currency or calculating freight by hand, so you can cut down on overhead expenses that don’t directly contribute to your enterprise’s growth.
• Prepare your business for scale: Getting your first large order is a really big deal, but when your systems can’t keep up with demand, it reflects poorly on your brand. Fortunately, FDM4’s pre-built and customized software solutions for the apparel and consumer goods industries can keep your integrated functions working together smoothly.

Get in Touch

During our 38-year track record, we’ve helped apparel and consumer goods businesses grow exponentially. Today, we’ve designed our solutions to meet the demands of modern business using innovative mobile technology that will ensure your employees across your entire organization can do their best work — work that will enable sustainable growth.