QuickBooks Alternative: Is ERP Right for Your Manufacturing Business?

The situation: Your small manufacturing company has run fairly well on QuickBooks software to handle the basic accounting needs you’ve required to get established. All the while, you’ve worked hard to determine your competitive advantage and build a value proposition — and customer base — that says you’re going to be one of the lucky ones that makes it!

According to the U.S. Small Business Association, 80% of small businesses survive their first year, but that number drops to about a 50% survival rate after five years.

If you are at a point where you’re facing typical manufacturing challenges and outgrowing QuickBooks, you are reading this to determine how to take your business to the next level, by making smart technology choices.

The problem

Enterprise technology strategies have been stuck for more than 30 years in a linear progression cycle since Intuit first founded QuickBooks’ predecessor Quicken back in 1983.

The pre-programmed small business evolution cycle is...

1. First, start with QuickBooks
2. Then, you're supposed to buy a “small” enterprise resource planning (ERP) solution, and
3. Finally, when (if) you’re headed for large business stardom, you have to move off the lightweight (likely unscalable) ERP solution to one of the top 3-5 ERP behemoths into the billion-dollar-revenue club.

Your success will be accompanied by the sheer thrill (not!) of emptying your pockets and dumping your precious profits into multi-million-dollar ERP contracts at this point!

But what if ERP isn’t right for your small business?

What if it’s too expensive, too hard to deploy, will sap too much of your time or simply… you don’t need all of that technology to get to where you want to go or do what you want your business to do for the foreseeable future?  

You’re not alone in that thinking, but there aren’t a lot of articles telling you how to depart from pre-scripted, pro forma ERP progression strategy. A quick Google search on how to recognize if you’ve outgrown QuickBooks and/or what to do about it, sends you to several dozen search-engine optimized articles that track you to — you guessed it — ERP vendors.

They’ll ask you to fill out forms to download what looks like education-oriented white papers, but in reality, are simple mechanisms for capturing your contact information for their sales force.   

Correctly Read the Right Time-for-Action Moment

Business owners get multiple signals when QuickBooks isn’t cutting it for them anymore. As a manufacturing business grows, the basic financial management capabilities that make QuickBooks so easy and/or convenient for most start-ups can exhaust their runway for everyday reasons, such as:

• Need inventory management and tracking across multiple sales channels
• Require ability to sell and ship product to customers in an efficient manner
• Analyze sales by location, order size, prior orders, industry and/or countries
• Demand process improvements in receiving, picking, packing and shipping
• Lack warehouse management
• Can't coordinate with third-party logistics companies
• Support for external users

And this everyday list doesn’t even factor in more urgent, potentially business-compromising needs, such as:   

• Volume-and audit-based sales orders and barcode scanning
• Industry compliance mandates
• Quality control and/or process consistency control
• Unsustainable, outgrown multi-user files that can create incorrect information at best, or data corruption at worst, via double entry and keying errors

If any or all of these apply to your current needs, the pain is real, and you need to do SOMETHING. But how do you approach a strategy for thinking outside of the box about your next-step options?

How to Assess (and Potentially Avoid) an ERP Auto-Pilot Move

So, if QuickBooks won’t support your manufacturing company’s growth, what can you do next versus making an automatic default to a pricey, complex ERP solution?

The answer is to do your advance homework (and serious company growth soul-searching) on what you really want, need, and can live with and without. Here are five (50 pragmatic steps to making the right choice for your company:

1. ASSESS: Accurately evaluate EXACTLY what you need – and no more than that
2. PRIORITIZE: Determine the priority order to address these needs and the necessary timetable; this will be your roadmap
3. SEEK FLEXIBILITY: Ensure that your selection criteria and ultimate choice is flexible enough to support the unexpected and reasonable growth within your business projections
4. BUDGET: Know your budget, be realistic about what you can get for what you can afford, AND STUBBORNLY STICK TO IT
5. COMMIT (WITH BOUNDARIES): Assign a dedicated person (or small team) to review all of the alternatives for getting JUST WHAT YOU NEED to protect against three (3) deadly outcomes:
   • Not being over-sold
   • Foot-dragging on deployment, and
   • Dreaded “scope creep,” where your initial priorities become overwhelmed with add-on “nice to haves” that eat up people, time and money resources

Remember ultimately that YOU are in the driver’s seat, and what has made your small business beat the odds of sustainability is that you followed the path less traveled.

Assess all of your market options for getting exactly what your small business needs, and watch for new announcements from technology solutions providers that really understand your requirement to take a more pragmatic composite-style approach to give you no more — but no less — than what your business really needs.

If you really need a pricey big ERP deployment, your requirements list will tell you that. But, if you're like most small companies that are organically built, resource constrained, and want to cherry-pick solutions, think outside of the box. New options in a “less is more” vein are in the manufacturing technology market — and they may be "just right" for your business.

Learn more about alternatives to or options for QuickBooks.