Manufacturing Software and QuickBooks

QuickBooks + Manufacturing: It is possible!

All too often we hear from potential customers who have either purchased versions of QuickBooks that claim to handle manufacturing, or contracted with consultants who claim they can make QuickBooks fit their manufacturing processes. They all want to solve the problem of Manufacturing and QuickBooks

Needless to say, it isn't pretty, and its very expensive.

Manufacturing Software and QuickBooks

We have said before, QuickBooks is an amazing program, and that's why it doesn't work. It is perhaps the best small business accounting program out there when measured on several key metrics (things like cost, learning curve, support resources, code maturity etc . . .). But it has inherent design flaws when it comes to tracking manufacturing.

But that is not the end of the story.

Integrating the software IS the solution

When done right, integration between programs can be very effective. You get a "best of breed" concept, without compromising all the pieces. BusinessMaster, our Small Business Software Toolkit, comes already able to integrate with QuickBooks. And there is a lot of flexibility to expand on it.

We can bring data in from QuickBooks. That's a helpful element. However we push data back to QuickBooks, and thats where we see the most power.

Data FROM QuickBooks

When setting up BusinessMaster initially, importing QuickBooks data helps avoid some of the biggest difficulties in implementation: Data Entry Time, and Data Entry Errors. Simply importing Customers, Vendors, Items etc.... saves huge costs and hassle.

After setup, it is possible to import from QuickBooks to do advanced reporting and inter-relating data to the Manufacturing System.

Data TO QuickBooks

In the day to day operations, sending data to QuickBooks is a serious benefit. Here are some basic examples already available:

  • Export of Invoices. When the customer is new, BusinessMaster will automatically add the new customer. Same with any new items.
  • Export of Bills. When a new vendor is added, BusinessMaster will automatically add the Vendor to QuickBooks.
  • Export of Payments Received against Invoices.
  • Export of Journal Adjustments for Progressive Billing, including reversal of Deposits. These can be separate from A/R.
  • Export of Labor Collection processed for Payroll.

Inventory: The big problem

Inventory is hard enough to manage itself. How much quantity on hand is one part of the problem, but how much it's worth is another. It's important to understand the function of Inventory Valuation within the accounting package, and then develop a process on how to handle it.

There are many ways to value Inventory on hand, and BusinessMaster provides 3 right out of the box:

  • Standard Cost
  • Current Cost
  • Average Cost

Even these terms mean different things to different users. But at the very minimum, you can get a value of on hand inventory if you maintain your counts correctly. It takes some practice and tweaking, but you CAN do it.

The next piece is to update QuickBooks with the value. There are different strategies to do this, and it really depends on your financial reporting, your preferences, and your complexity. Essentially, we see most organizations boil it down to either of these:

  1. Purchase all goods to COGS(Cost of Goods Sold) and Expense accounts. When they are exported as Accounts Payable (Bills) one side of the accounting entry is A/P, the other COGS/Expense. Periodically, you count inventory, and make adjustments to the Inventory Asset accounts to the right value.
  2. Purchase all goods to Inventory Asset accounts. Then periodically you report on what you have used, and adjust the COGS/Expense accounts.

If the above isn't clear, trust us, we understand. We have seen very simple and very complex approaches, and they each have their merits. Any good accountant will see the issues and provide advice on how to handle it. We can adapt to how your finance team wants to run it. If your financial team doesn't know how to approach this, that is a bigger problem than HOW you track it. We aren't accountants, but we know how to work with them, and that's key.

In closing, we want to re-iterate. QuickBooks is a fantastic solution for Manufacturers, as long as they use it for the Accounting! When it comes to Item management, Inventory Planning, Production Planning, and other unique elements of the manufacturing process, stick to software designed for that. Then Integrate wherever needed.



Want to know more?

We are very interested in talking with you about your needs. We want to make sure we are a good fit, and understand what you are trying to accomplish, and the best way we know how is some quick discussion. Please contact us via the link to get the process started.

Let's schedule a demo of our awesome Small Business Software Toolkit while we are at it!

BusinessMaster-Address Book

Address Book

Address Book rundown, and some possibilities for use.

The Address Book is a key part of the CORE module of BusinessMaster managing the details of WHO you do business with. Often this data is in someones head, their smart phone, or their email program, yet is important for many different users within the organization.

We provide basic data elements, the classic address fields, phone numbers, emails, and a free-form list that can be used as-is, or as the base of a customized contact manager.

We also provide functional elements like  contact management, document links, and integration with Item pricing/costing. These can be expanded and developed to suit your specific needs during implementation.

Want to know more?

We are very interested in talking with you about your needs. We want to make sure we are a good fit, and understand what you are trying to accomplish, and the best way we know how is some quick discussion. Please contact us via the link to get the process started.

Let's schedule a demo of our awesome Small Business Software Toolkit while we are at it!

BusinessMaster Overview

A quick overview of the basic structure of BusinessMaster.

The goal of this video is to show a basic overview of our key modules, and give you some ideas on what you might do with them. This is by no means a complete or comprehensive overview. We prefer to do an online demonstration, and interact with you to see where your points of interest are, and determine if our framework is a good fit.

Inventory Software Basics

Inventory Software Basics

Inventory is a significant element in mastering the small business.

You know you have cash in the bank (we hope you do!). You know you have some invoices out there waiting for your customers to write you a check. You also have money (in some cases a LOT of money) in other places. Are you aware of how much capital you have tied up

  • Sitting in shelves, pallet racks etc... on the shop floor
  • In bins stashed around work spaces, in trucks, and toolboxes
  • In the process of manufacturing, but not yet turned into salable products
  • Finished Goods sitting around waiting to be shipped

This is called Inventory. There are even more in depth, sophisticated elements of Inventory, but our goal is to cover what it truly takes to get the basics of Inventory up and running in a small business using Inventory Software.

Why tracking Inventory is crucial


Tracking Inventory is crucial because inventory is basically cash on the shop floor rather than in your bank account.


And its isn't just the amount of money, it's the LOST PRODUCTIVITY when the manufacturing team can't continue because there is no raw materials. I've literally seen a full stop on the shop floor, and 5-6 people stop, look at each other, and then sit down and wait.

Do the math

(Quantity of workers (lets say 6)) X (minutes sitting (lets say 10)) X (Average Burden Rate per hour (lets say $50))

This equals 1 hour lost time, and at least $50 in costs.

But wait, there is more...

How much SALES or PROFIT would that hour produce? You lost that as well.

So there is a balance to be maintained. You need enough inventory to keep production going, but every bit of inventory you have extra on the shop floor is cash you cannot use or put to work. I've also seen companies buy so much raw materials to avoid running out, they cannot make payroll.

So there are several factors to tracking Inventory, the time it takes to manage it, as well as the potential impact

Tracking Inventory: Manual vs Inventory Software Systems

Before we go further, let us be clear. You can manage Inventory using a couple of simple manual techniques. Here is a quick list of a few, some of which might work for certain organizations that are either very small or very simple:


  1. Visual: This is where your operation uses very consistent raw materials, and they are large enough and organized on shelves or racks easily visible by whomever is responsible for managing Inventory. It also presumes raw materials are used quickly in relation to when they are needed. I've literally seen organizations where someone scheduling production or materials pick up a phone, look out through the door, and manage inventory in real time with the supplier.  They simply place an order based on what they can see, and as long as they don't run out, everything is fine.
  2. Systematic: There are basic systems that track Inventory using differing kinds of structures.
    1. Min/Max: Each Item you want to track Inventory. Each container (bin, shelf, spot etc...) has some kind of label or sign that shows the MINimum and the MAXimum amount you want to have for that item. Periodically someone walks around and notes how much they need to get to the MIN amount. If the amount on hand is the MAX amount, they can decide to reset the MAX amount to something lower.
    2. KANBAN: This system uses a series of cards/signs that help the operation respond to Inventory levels, oriented around a PULL type system. Demand for inventory drives the process from consumption. It can be a very effective system, especially in LEAN manufacturing systems. You need to have very little limits on resupplying, And some good grasp on future demand.

Inventory Software

For any but the most simple, or small organizations, manual systems cost more than they can save. The time it takes, the lack of accuracy, and the inability to adjust to increased demand (even worse if the increase is temporary) make it hard to keep up. We need a small business software system.

All Inventory software is going to track 2 basic types of transactions at a minimum. There are always more and more concepts to dig into, but lets stay focused.

Inventory really is like a bank account on the shop floor, and every bank account needs a register

The Ins and Outs of Inventory

The amount of Inventory a software system calculates is basically the sum of all the Ins (deposits) and the Outs (withdrawals). The remainder is your balance. That is how much you have right now. Of course in most checkbooks, you have checks you will need to write in the future, as well as checks you wrote but haven't been "cashed" yet. More on these later.

A good small business software system will track the Ins and Outs as they happen, and calculate that information on demand for the user. Here are some simple examples of Ins and Outs

Examples of Ins

Receiving purchased materials
Putting Inventory back from a return from a customer
Receiving parts from manufacturing back into Inventory

Examples of Outs

Shipping products to customers
Consuming raw materials in manufacturing
Loss from scrap, quality rejections, and theft

Good Inventory Software will track the transactions listed above. This means that you will need to conduct those transactions within the same Small Business Software system:

Sales Orders and Shipping: Entering what Customers want, and tracking how you and when you ship them. This is normally making packing slips (for product based operations), or having projects passing a certain point in manufacturing. At this point, you have many of the elements of Invoice/Accounts Receivable, which drive accounting.

Purchasing and Receiving: Entering what you buy from Vendors, and tracking when and how you receive them. This is normally entering Purchase Orders for each item, and receiving it by entering the information from the Vendors Packing Slips. At this point, you have the elements of Voucher/Accounts Payable, which drive accounting.

Adjustments: Transactions that take away or add Inventory but don't go through the above transactions. Scrap, Rejects, Theft, and periodic adjustments.

These simple elements work together to provide inventory information to you. But like many things, just having information isn't good enough. Using it is the point. It's an important element of any good small business software system that manages inventory to provide elements that focus your attention to relevant pieces.

Part Numbers: Each item you wish to track needs it's own part number, unique and usable.
Part Elements: Costs, Prices, and groupings are key. If you want more than just HOW MUCH Inventory is on hand, but HOW MUCH VALUE is on hand, you need to track costs, prices etc... If you want to know inventory for a group of related parts, there needs to be ways to related parts like Product Codes, Inventory Codes etc...
Transaction History: The numbers are important, but also the chronology of HOW you got to your number can be very important when you need to verify or audit your Inventory numbers. Having the transaction identifiers (Sales Order Number, Purchase Order Number etc...) are very helpful.

These elements may seem overwhelming, but in reality any good system has these. They might use differing terms, or have unique elements of how they track them. The important part is to have a good strategy on what parts you need to track, how much you need to track, and what elements are the most effective. .


Want to know more?

We are very interested in talking with you about your needs. We want to make sure we are a good fit, and understand what you are trying to accomplish, and the best way we know how is some quick discussion. Please contact us via the link to get the process started.

Let's schedule a demo of our awesome Small Business Software Toolkit while we are at it!

Planit Enterprise: The good, the bad, the ugly

Planit Enterprise: Focusing solutions on woodworking

Our roots are in woodworking. Here are some lessons we learned licensing and partnering with a vertical software company.

Our Small Business Software Toolkit, BusinessMaster, has deep roots in woodworking/ custom cabinet manufacturing. We took the framework we had developed previously throughout a series of installations, and then began to standardize it over 12-18 months in a growing, dynamic woodworking shop.

The previous installations started in a custom machine shop, and then migrated through a molded cable assembly facility, and a disposable medical cable start-up. Each step incorporated unique elements of business process management. Most of the focus had been on  Labor Collection/Job Costing (Machine Shop), MRP (Cable Assembly), and Work Order management (Medical Device start-up). The last organization was an executive management team already clear on their objectives, and designing the whole organization to be ISO 9001 certified.

The implementation into woodworking brought new dynamics into play. There are 2 main categories of cabinet manufacturing, custom and "modular".

  • In modular cabinets, the end products are part number based, consistent products built to a more classic BOM (Bill of Materials) scenario. This is similar to the Cable Assembly and Medical Device companies.
  • In custom cabinet manufacturing, the end product is a mix of products, some similar, and others potentially completely different than any other products previously made. This is essentially project based manufacturing, where the materials, the labor, the specifications are all associated with a project (or set of sub-project we call phases).

As BusinessMaster progressed in adapting and responding the unique needs of the organization, a framework took shape, and we began to reach out to other woodworking companies who implemented the small business software toolkit. Eventually, Planit Solutions approached us about licensing the software we developed, and begin to sell it as an incorporated part of their woodworking solutions.

The next 3 years was a huge learning curve, and here are our observations.

Eating Elephants is Hard

BusinessMaster had become a very broad and deep solution by this point. We had modules addressing most of the key elements of small businesses. The "suite" of modules were marketed, sold, installed, and supported as a whole concept.

The result was unnecessarily complex. We had significant flexibility in installation and implementation where we could identify a specific need of an organization and alter the installation and support. However we still were unduly influenced by the context of the whole program. Most organizations benefit from focusing on one or two main elements and mastering them.

  • The breadth and depth of the program allowed for constant expansion and benefit.
  • Trying to implement several different layers of software defers the return on investment, and impedes momentum. It simply becomes too hard/too much to achieve.

Simple Not Sexy

We go over some of this in our article here. We noticed that the most powerful solutions in terms of overall performance we the more boring, simple, rudimentary ones. Most users love the idea of finite capacity labor scheduling by work center, but the real power was often just having shared, up to date contact information, or the most recent vendor used on a Purchase Order for an item. It was lots of simple, direct data that had the biggest impact in the day to day war for profit.

  • Taking advantage of every small, simple solution regardless of how boring puts immediate benefits to work. This creates the proper foundation for the more sophisticated, specialized elements later.
  • Focusing on the more sophisticated pieces without the proper foundations leaves profit on the table, and frustrated users in the dust.

Evaluate first, Install Second

Technical evaluation is key prior to implementation. The customer may want solutions x, yet they might not be ready to support it. If the right players are not in place, the solution wont succeed. Taking an honest evaluation, and targeting the areas the client is ready to do, rather than aspiring to do, is the only realistic way to help the client achieve what they want. Throwing the client into unsupportable changes without advising them before hand is a disservice to the client.

  • Evaluate what IS, not what SHOULD BE. Base your go forward plan on what can be sustained, and grow from there.
  • Chasing a vision of what could be without proper strategy and evaluation is leaping before looking.



There are more ideas than we have space to present. Essentially what we learned by working with Planit was:

  • Market research was left up to the sales team, who wanted/needed new products to sell.
  • The market DID need business process management.
  • No one realized up front that the majority of the potential customers were unable to support such a large bite of technical solutions, even though they WANTED to implement them.
  • The solution was as much business process development, training, consulting, as it was software. For example, many organizations needed to understand the WHY of Purchasing and Purchase Orders, as much as they needed a WAY to make Purchase Orders.

We learned a lot working on the Planit Enterprise product. It allowed us to help a lot of woodworkers, and at the same time adapt and refine our products even more. We still support and customize Planit Enterprise customers, and find that the woodworking industry is full of some of the smartest, most innovative organizations out there.


Want to know more?

We are very interested in talking with you about your needs. We want to make sure we are a good fit, and understand what you are trying to accomplish, and the best way we know how is some quick discussion. Please contact us via the link to get the process started.

Let's schedule a demo of our awesome Small Business Software Toolkit while we are at it!

The best software solutions are simple, not sexy

The best software solutions don't normally look like "one of the cool kids".

When looking at small business software solutions, we tend to look for:

  • The most powerful looking, sounding, or appearing.
  • The most sophisticated, most cool, most modern (and maybe even have a new acronym!)
  • The  most intricate and detailed.

However, there is still a fundamental rule about finding a customer or vendor phone number in your organization:

"The quickest, fastest tool for getting a contact phone number in your organization is still the Rolodex"

best software solution?

Think about this before you rush to your conclusion that we are crazy, outdated, or perhaps even a technological Luddite . . .If your problem is you can't quickly find a customers phone number, the best software solution isn't even software. By the time you open your email/contact manager, get your smartphone, or some other technology you can reach 2 feet, and get to the letter, if not the very entry you are looking for.

Lots of solutions are like this. We can create sophisticated, multi-layered tools (and there are good reasons we will get into later in the article), but it's important to rethink what the best solutions is.

Let's bring more clarity:

  • A Rolodex is great if you only have one user needing contact information. If you have more users needing the same information, it can be horrible.
    • Anytime someone needs a phone number, you have to stop, get up, and interrupt the Rolodex master, and get what they need.
    • If the  user doesn't have a great memory, the have to write the details down before they walk away.
  • A Rolodex is great if the contact detail doesn't change often. If it does, you can find yourself in a mess.
    • Changes require copying and rewriting the WHOLE card perfectly. Any error will be permanently committed, and recopied at every change.
    • Every change has to be conducted by the Rolodex master. When someone else requests a change, they have to submit the change, and wait for the update (assuming it did get updated).
  • A Rolodex is great if you already KNOW what you are looking for. If you don't know the index name, it can be almost impossible o get the information.
    • If you index by company name, you need to know the company name. If you index by the name, you need to know the name (first or last?). What if you only remember the last name and city?
    • The index makes sense to the Rolodex master, but no one else might even think that way.

"So clearly, a Rolodex is the best solution when you only have one user who needs the information, manages the information, and knows the information."

If you are still hanging with the "Rolodex" metaphor, then lets think of how it applies generically to information within an organization. How do we develop the best software solution for your organization?

Determine the Real User(s)

Is there one central user/role in the organization? Are there other users that can benefit from this information? Can the information be used in other processes in the organization?

Determine how Dynamic the Data is

Does the data change often? Is it all the data, or just key elements? Does the data need to be validated before it is updated?

Determine how Users Access the Data

Do users already know what they want? Will users ever need to find data by partial elements? Will users need to access the data in the middle of other processes? Is the data critical to a process, or can it wat?

Determine Data Validation

Is it faster to empower users to update information directly rather than run through a "gatekeeper (or vice versa)? Do you need a history of the changes, or just the current values?

Clearly, this is a bigger thing than it seems . . .

Take the above and walk through a mental exercise. Instead of a customers phone number, substitute a vendors. Or an Inventory Item. Or a Purchase Order. Or a Sales Order. Or a Item Standard Cost. Or a received payment.

All these data elements are important. Some closing thoughts to think about:

In some cases a Rolodex (or in modern equivalence a printed report or binder) for a key user is the fastest way for them to have access to a piece of data.

Multi-User access is a key element in designing the best software solution. If you have multiple users (or processes using the data), you must centralize and possibly control access.

Controlling who updates data is worth the extra effort in designing the best software solution for your organization. Sometimes it is overkill and not worth it.

In the real world, it can often be the smallest, simplest solutions that gain you the most benefit. Let's revisit the idea of finding the contact details for a customer.

Look for Time Savings, Data Integrity/Quality, System Stability

A key element in evaluating whether a solution is effective or not comes down to the following questions:

  • Does it save time? Just think about a 10 user office, saving 5 minutes a day. Sounds infinitesimal. However that's 50 total minutes a day,  On a classic 5 day work week, that's 250 minutes (4 hours).  52 weeks results in 216 hours.  That is almost 5.5 work weeks. What would you do if you hired someone (for free) who already knew your organization, was already in your systems, didnt need retraining, for almost 6 weeks?
  • Does the data have integrity? Is it accurate? Is it relevant? Is it accessible? It is easy to manage and validate?Is it protected from theft, damage, or disruption?
  • Is the system stable? Is it sustainable? Is it backed up and can it be restored in case of errors or misuse? Can it scale and grow?

Building the best software software solution for your organization can take a lot of thought. Don't assume the latest and greatest is the answer. And don't assume it's not. Evaluate what it is you really need, and why. Then look at the solution. Avoid investing in bells and whistles, and look for the key elements of a real solution, fit for your organization.

Want to know more?

We are very interested in talking with you about your needs. We want to make sure we are a good fit, and understand what you are trying to accomplish, and the best way we know how is some quick discussion. Please contact us via the link to get the process started.

Let's schedule a demo of our awesome Small Business Software Toolkit while we are at it!

BusinessMaster: Overview

BusinessMaster, the Small Business Software Toolkit by Master Solutions

BusinessMaster handles the following categories of activity. Each section contains far more detail than can be described in this simple list.

BusinessMaster is broken down into a set of modules. Each module represents classic activities, however ALL of them are interconnected. Following is a short list of features as a top level overview. Click on each section as see more, along with some demo videos to help you see the potential.

  • CORE Module:
    • Address Book and basic Contact Management
    • Items and Inventory; Bills of Material, Labor and Work
    • Purchasing, Receiving, and Vouchering to Accounts Payable. Purchasing can be pegged to specific projects
    • Sales Orders, Packing/Shipping, and Invoicing to Accounts Receivable
    • Tracking of Invoice Payments
  • PROJECTS Module
    • Project based manufacturing and Project Management
    • Unlimited Phases against a Job, with each Phase having it's own schedule, and connected details
    • Project based Billing, with special advanced elements to handle Deposits and Revenue booking
  • MRP/Planning
    • Materials Planning using MRP concepts
    • Can change demand to work against BOM based Work Orders, Projects or Both
    • MRP can run against Labor separate from Materials
    • Multiple Inventory warehouses
    • Automatic planning based on projected Inventory and rules
  • Work Orders
    • BOM based work orders moving in and out of WIP.
    • Can be auto planned from MRP, as well as created from Sales Orders
  • Time Collection
    • Simple, integrated Time Collection against projects, and calculated for Payroll as well as Job Costing.
  • Job Costing
    • Roll up of materials and labor to analyze against price for profit analysis
    • Real time % to budget.
    • Breakdown by Phase, Customer, Project Type
  • Accounting Export to Quickbooks
    • Export AP, AR, Payments and Labor to Quickbooks.
    • Receive data from Quickbooks for quick startup.

Each BusinessMaster component can be customized both in HOW you use it, and the source code itself.

Want to know more?

We are very interested in talking with you about your needs. We want to make sure we are a good fit, and understand what you are trying to accomplish, and the best way we know how is some quick discussion. Please contact us via the link to get the process started.

Let's schedule a demo of our awesome Small Business Software Toolkit while we are at it!

Why we don’t have a user manual, but you do

You don't have a User Manual?

To be fair, we DO have a manual. All 400+ pages. We still aren't sure anyone has read all of it,. After taking months to write it, spending hours trying to keep it current, we realized we were fighting the wrong battle in small business software. Iv'e said this to many clients:

"One of best things about BusinessMaster is how flexible it is designed. You can approach your situation from several different ways, and use the program completely differently than someone else in the same exact vertical market.

One of hardest things about BusinessMaster is how flexible it is designed. You can approach your situation from several different ways, and use the program completely differently than someone else in the same exact vertical market."

BusinessMaster is designed to adapt to your business process, not the other way around

The business process should drive the solution. And this has serious strengths. Too often every process has to adhere to the software package already bought. However it also means that HOW the solution is used varies from user to user, from operation to operation, and from organization to organization.

User Manuals, and how they fail

A comprehensive user manual has to assume every single context a user might encounter, and devise a method on how to steer the user to an action. This is what I call "the box" principle.Try and get every user, every action, every result into "a box". Boxes help keep things contained. Boxes are stack-able.  Boxes make most managers feel at peace.

The problem? Management is not the goal (more on that here). Mastering is the goal. Mastering requires a flexible, practical approach. Think more like a bag than a box.

What you CAN do, is build your own small business software support manual.

We believe the BEST support manuals are a combination of documents, training videos, and in house (your house!) gurus. Every user ha a different style. Some like reading, some are visual, some need instruction from a person. The reality is, no one knows better than the people on the front lines what they are doing, and if implemented properly, WHY. Taking as little as 5 minutes to record a quick desktop sharing session and building a library of actual training sessions with us can do more (at far less cost) to train (and retrain new hires) on what you are doing than anything else.

We even have elements within BusinessMaster to link key training resources to specific forms. You can build you own support systems for the way you work. And it is YOURS to develop, expand on, or limit. We help support YOUR organization.

We can also help you develop a strategy for document management, operations systems, and quality manuals. The same principle works on many different systems, not just software.

Want to know more?

We are very interested in talking with you about your needs. We want to make sure we are a good fit, and understand what you are trying to accomplish, and the best way we know how is some quick discussion. Please contact us via the link to get the process started.

Let's schedule a demo of our awesome Small Business Software Toolkit while we are at it!

Quickbooks is awesome, thats why it won’t work

Quickbooks is one of the most installed small business software applications in the world

Quickbooks can also be one of the worst software solutions in your operation . . .

It's critical role in the majority of small operations is hard to over-estimate. There are countless support and training resources, as well as consultants and implementation specialists. There are whole armies of temp agencies that are on call to support it. You can buy it, install it, and begin entering your transactions, downloading them from your bank, write checks and pay employees.

It's so easy to get, set-up, and use.
And more often than not, it doesn't work.

It's not that the software doesn't work. It's not that it isn't a great tool (for financial reporting). Although many CPA types will argue about this in some of the finer points of accounting, Quickbooks has been a huge success for Intuit.

The real issue lies in what it's designed to do, what users want it to do, and where the limits are.

The classic issue with Quickbooks

BusinessMaster was one of the first manufacturing software applications to integrate with Quickbooks in 2001, when Intuit first opened up their ubiquitous program to data exchange. Data exchange opened up vertical markets to a horizontal application. Quickbooks is a financial accounting program, one most small businesses had (already), and it was positioned horizontally in the market. Horizontally means it did many common things every business needed to do, without specializing in any one "vertical" segment (like a specialty or business focus).

To be horizontal in a software paradigm, is to be broad, wide, covering a large, generic portion of the market.

To be vertical is to specialize in a narrow, unique focus, such as woodworking (or even more focused, custom cabinetry), or custom musical instrument repair (or even more focused, guitars).

For instance, all businesses SHOULD maintain correct Profit and Loss reporting, Balance Sheet reporting, and similar disciplines. And for the most part, it's an almost identical process. But HOW these business drive accounting transactions can be so different. A totally custom cabinet shop buys, sells, inventories, and manages capital equipment totally differently than a local retail store. Even within similar areas like manufacturing, some operations what is WIP (Work In Process Inventory) to one company doesn't even exists in another.

Quickbooks has constantly tried to add features to their application to accommodate many different processes, and stuff them inside their horizontal program. Some are successful, like Payroll. Some are not, like Inventory. And some changes, like incorporating Sales Orders and Invoicing, attempt to push multiple users into Quickbooks, which Quickbooks was clearly not designed to handle. If you have a multi user install of Quickbooks, you know the performance hitwhen more than a few users get in the program.

Here is a small list of problems we see regularly (Keep in mind of course there are users who do pull this off)

  • CRM: Customer Retention Management, or Contact Management. Quickbooks DOES maintain customers, but NOT every contact every employee works with. This requires every user that interacts with customers in any fashion to have Quickbooks installed, and enter data that isn't relevant to any account practice.
  • Item management: The fundamental piece of Inventory Management can be far more complex and sophisticated than what is needed for accounting. Many of the activities in managing raw materials and assemblies are far outside the design of what accounting requires. In fact, I feel confident in saying real accounting doesn't CARE about the part numbers or the discreet parts in general.
  • Inventory: The needs of manufacturing to manage inventory can be so different than just a simple "How much of x product is on hand?" it would take too long to write. Suffice to say, I believe I've "paid the rent" more fixing and solving problems about this one element than any other. When potential clients tell me they are running their inventory in Quickbooks, and they are a manufacturer, I can tell right away there is a fundamental lack of understanding about both Inventory AND Quickbooks. See our Evaluation War Story Part 1.
  • Partial Shipments and Purchase Order Receiving: Most accounting programs treat a Sales Order and a Purchase Order as an accounting transaction, rather than the RESULT of these as an accounting transaction. In doing that, they require back orders and partial shipments to be closed rather than left open. There are work-arounds, but they don't work in most real world scenarios.
  • Billing for Deposits: I've seen more bizarre practices trying to cope with this idea in Quickbooks than I care to remember. If you are taking deposits from customers, or progressively billing customers, ad are using QuickBooks, chances are high you have problems auditing your books up to standard GAAP.

Because Quickbooks works so well for some things, it doesn't work for everything

Quickbooks does work very well as a small business solution for financial transactions. When it comes to Accounts Receivable, Accounts Payable, Reporting, Checkbooks, Chart of Accounts etc... I believe it is basically unbeatable. But I also believe it is limited in it's ability to truly solve the other pieces.

Large scale ERP systems do this in larger companies, but if you saw the budgets for these types of software applications (and I mean annual, not just occasional upgrades) you would understand why there really isn't one totally integrated program for the small business.

Want to know more?

We are very interested in talking with you about your needs. We want to make sure we are a good fit, and understand what you are trying to accomplish, and the best way we know how is some quick discussion. Please contact us via the link to get the process started.

Let's schedule a demo of our awesome Small Business Software Toolkit while we are at it!

Process Evaluation Part 1

Getting an accurate Business Process Evaluation is the key foundation to making profitable change.

Most companies looking to improve Business Process Management have already made a commitment to change. Most of the time, it's due to serious pain, coming from either administrative inefficiency, profit loss, or serious structural change. The last thing they want to do is slow down and look at where they are. But they need to . . .

Process Evaluation War Stories: Part 1

For many reasons, businesses find themselves needing to change, and change significantly. The problem isn't changing. The real problem is changing profitably.

And the reality is, many organizations might already have key pieces of the solution. The problem is, they might not even realize it.

Each project really starts (and sometimes ends) with an evaluation. An evaluation needs to be a constant part of the process. Some of our key goals have been stated already here... The point of this article is to give you some scenarios that might help explain WHY this process is so important.

War Story 1:

Potential customer calls us looking for help. They say something like

"My tax person says they need me to get better control over my inventory. They cant make heads or tails out of the numbers I give them, and it takes us days (or even weeks!) to get them. And we are always late!".

Some of you reading this are already laughing because it's the very situation you are in right now. If I had to make a quick estimate, I'd say more than half our clients were in this very position. Any software "sales person" in this position is licking their chops and dreaming about what they are going to do with the commission. Why?

Because keeping track of inventory, on a basic level, is simple. Almost all software applications can do basic level inventory without much effort. It isn't the problem.

Inventory is essentially like a checkbook. You have In, and you have Out. Add them up, and you have a total. Do it by part number (or some kind of group) and you have some detail. Include a cost for each group, and you have a value. Of course it gets more complicated, but it also can get more and more automated as well. For any decent database application, the key elements are pretty easy to define, at least to get started.

The real problem (initially) isn't where you record the ins and outs, the costs or the details. The real problems are more like:

  • Who is involved with inventory in the company?
  • Who needs the information, and who provides the information?
  • Who is responsible for checking and fixing problems?
  • Who understand the basic point of inventory, and how it works?
  • Are there any other users or processes that can benefit from tracking inventory (think scheduling, sales, financials etc...)?
  • How able is the current workforce to support (long term) all the processes that go into tracking inventory?

Iv'e actually ended up refusing projects because it was painfully clear that the organization didn't need software (yet). No one in the organization had any real ability to grasp the myriad inventory processes, take responsibility for it, and maintain it over the long run. Simply throwing a new software program in just automated the failure they already experienced. All that would end up happening was even more frustration, waste of resources, and a bad install.

The real solution, based on this initial evaluation (which is essentially a "sales call"), is to document the current situation, and answer the previous questions. The real need is to map out a "What Is" rather than a "What Should Be". Once there is a clear understanding of the flow of materials in, through, and out of the organization, how the costs are kept, who is responsbile for which piece etc... THEN we can look at the overall goals. THEN we can work back upstream and design processes that work, and then map those processes into a software solution.THEN we can work on implementing a software system that autmates the process as much as possible.

Perhaps we find out the process is simple, and the elements are easily managed. Or we find key pieces need customization to make sure the end results are accomplished. Remember, all the moving pieces need to meet the requirements of "my tax person", which is how we got into the mess in the first place!

I realize this is somewhat over simplistic on one side, and overly complex on the other. Im using examples of real situations I have encountered to make a point. Automating failure just helps you fail faster. That's not a real solution.

Want to know more?

We are very interested in talking with you about your needs. We want to make sure we are a good fit, and understand what you are trying to accomplish, and the best way we know how is some quick discussion. Please contact us via the link to get the process started.

Let's schedule a demo of our awesome Small Business Software Toolkit while we are at it!