Top 3 Reasons QuickBooks doesn’t scale

There are a couple of reasons why QuickBooks doesn’t scale. If you’re like many SaaS software companies, you probably started on QuickBooks. It’s inexpensive and easy to set up and use. It’s a good initial system for basic accounting. However, as your business starts to scale, you’ve probably pushed the limits of QuickBooks and fallen out of love.

These are the top 3 reasons why QuickBooks quickly chokes as SaaS software companies scale.

1. It does not manage the subscription revenue that powers SaaS businesses. Recurring billings and Annual Recurring Revenue (ARR) or Monthly Recurring Revenue (MRR) reporting are the lifeblood of SaaS companies. Yet QuickBooks has very limited capabilities to manage this. Why? Because it was designed as a general accounting tool equally applicable to a pizza parlor as a SaaS software business. Most software companies end up tracking subscriptions and revenue recognition in spreadsheets and make summary entries in QuickBooks. This method is time-consuming, error-prone, and difficult to report, but QuickBooks cannot do it.

2. It was built for accountants, not business operators. QuickBooks reporting does not provide real business insights. QuickBooks comes with a number of pre-built reports that will tell you important information about your company: profit and loss, receivables, payables, etc… But those reports were built for financial reporting, not providing business insight to scale your business. It is difficult to build your own reports and get the real insights you need to manage your business growth. Most likely you’re exporting data to a spreadsheet to perform analysis and look for trends.

3. It is not (well) connected to your CRM system. CRM and accounting are critical systems of record for your customers. Yet most of its implementations are not connected to a CRM or connected using third-party tools that are limited, flakey, cause duplicate data, and are time-consuming to maintain. The people most responsible for your customers, account reps and customer success managers, usually don’t have access to QuickBooks. They are missing a key source of information about renewals, billing, ARR/MRR growth, gross and net retention. They are flying half-blind.

If you are a SaaS company, and this post is resonating a little bit, we’d love to chat with you about what TekStack can do to help scale your business with Microsoft Dynamics 365 Business Central.