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Is QuickBooks an ERP system – Which one is better?

Person working on computer with blue hologram that says "ERP".

There are several kinds of software systems that automate business operations, and most of them offer at least a few capabilities that benefit your business. 

For example, software that is classified as an ERP system takes on the role of managing several functions at a time. 

Many business owners also use QuickBooks and its integrations to manage multiple operations. It’s a comprehensive financial management solution that also is known to function as an ERP system.

So, is QuickBooks an ERP system or solely an accounting system? And which one is the right choice for you?

In this blog, you’ll explore where QuickBooks falls under the category of ERP systems.  By the end, you’ll not only answer, “Is QuickBooks an ERP system?” You’ll also get a better understanding of what solution your business needs.

What is QuickBooks?

Before you dive into the “ERP” part of the question, “Is QuickBooks an ERP system?” let’s go over what QuickBooks actually is.

Intuit QuickBooks is an accounting software package that helps small and medium-sized businesses manage their finances. This program gives you the ability to:

  • Simplify financial processes.
  • Reduce manual errors.
  • Save time on accounting tasks. 

It is known for its user-friendly interface and scalability, which make it suitable for both startups and established enterprises. 

QuickBooks carries out the function of several business processes by offering tools for:

  • Bookkeeping.
  • Tracking of orders, payments, and bills.
  • Financial reporting.
  • Pricing and invoicing.
  • Payroll integration.
  • Sales, profits, expenses, and revenue loss tracking.

These functionalities are what make QuickBooks such a popular accounting system. Now, let’s see why it is commonly referred to as an ERP system as well.

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What is an ERP?

ERP stands for enterprise resource planning. It’s a system that handles business processes such as:

  • Project management.
  • Customer relationship management (basic CRM features).
  • Supply chain modules — including ecommerce and retail, manufacturing, inventory control, products and services procurement, etc.
  • Human resources (HR).
  • Financial reports.

A program is considered an ERP system when it automates workflows and centralizes data from several departments into one platform. 

In some aspects, an ERP assumes the position of several team members at a time to help you gain control over every business process.

Is QuickBooks an ERP system?

For most companies, QuickBooks plays the role of an accounting system. However, thanks to its app ecosystem, it can be categorized as an ERP system in many ways as well.

Even though it’s primarily focused on accounting, QuickBooks effectively doubles as an ERP as it offers:

  • Invoicing and billing capabilities with multi-currency support.
  • Tax management and reporting.
  • Cloud-based and desktop versions.
  • Expense management.
  • Automated data sync with banks.
  • Mobile application availability.
  • A simple dashboard and reporting with cash flow insights.

QuickBooks vs. ERP — Is ERP a better choice?

So… is QuickBooks an ERP system but cheaper? Or is ERP implementation actually worth it?

The main difference between using QuickBooks and an ERP as an all-in-one software is in the details of how they’re built.

A program that is generally accepted as an ERP system hosts all its functionalities and modules in the same software.

Quickbooks, on the other hand, has the option of third-party application integrations. It is understood to be an ERP system because it performs the same functions as an all-in-one program with these integrations. For example, it can handle:

  • Time tracking and project management (basic) with user access controls.
  • Basic inventory control.
  • Time tracking and project management (basic).

So, QuickBooks is labeled as an ERP system by some because it can fulfill just about every one of your business requirements in a single platform.

When integrated with these apps, QuickBooks takes the form of:

  • A customer relationship management system (CRM).
  • An HR platform.
  • A field service management system.
  • An order management program — and more.

For example, QuickBooks has limited supply chain functions. But, when integrated with apps like Transaction Pro or SOS Inventory, it also acts in the capacity of a purchase order management system.

Average cost inventory

QuickBooks performs as a calculator for the average cost of your inventory, using the amounts at which you bought your items or articles. This feature offers valuable insights into your product costs. 

For businesses dealing with fluctuating inventory values, QuickBooks essentially is affirmed to be an ERP system as it considers relevant factors to determine your average cost of inventory.

Negative inventory

QuickBooks works as your guide to prevent inventory discrepancies. It alerts you when the stock levels drop below zero so you can make informed decisions and focus on the right things.

The benefits of working with a program that is recognized as an ERP system are not limited to accurate record-keeping. QuickBooks acts like a safeguard against potential profit leaks and helps you keep customers happy by always ensuring you can meet demand.

General ledger and sub-ledger

QuickBooks functions like an accountant by recording every financial transaction that involves your business. And it operates as a bookkeeping system by organizing your financial data into helpful reports.

The general ledger in QuickBooks acts as the backbone of your financial story, while the sub-ledger serves as a tool to analyze data thoroughly. In this sense, QuickBooks is acknowledged as an ERP system because of its advanced financial capabilities.

Cash or accrual

QuickBooks adapts to your preferred accounting method, which represents the software’s flexibility. 

QuickBooks operates like a user-friendly ERP whether companies choose:

  • Cash: where transactions are recorded when money changes hands.
  • Accrual: where transactions are recorded when they’re incurred. 

QuickBooks is acknowledged to be an ERP system because it serves like a bridge between different financial approaches and business operations.

With QuickBooks, the choice between cash and accrual is very simple. You just have to pick an option in the settings.

Overall, QuickBooks is identified as an ERP system because it provides the features of an enterprise-level tool. Along with third-party apps, it manages your inventory number, teams, and customers all at once. So, even though QuickBooks is an accounting software, it is perceived as an ERP system too.

Is there a right time to migrate from QuickBooks to ERP software?

If your sole business system is QuickBooks, an ERP system would benefit you. But that doesn’t mean you have to break the bank. Instead, you can design your own by expanding QuickBooks’ capabilities with its app ecosystem.

Although QuickBooks is characterized as an ERP system, it is not typically suited for large enterprises, such as multinational consumer goods or oil companies. The robust type of program that is typically seen as an ERP system in these enterprises often has limited customizability and steep price points.

QuickBooks, on the other hand, is very useful for companies in all kinds of industries, such as:

  • Construction.
  • Field services.
  • Wholesale and distribution.
  • Food and beverage. 

It also has options for businesses of all sizes and helps drive profitability at scale.

For example, QuickBooks Enterprise is defined as an ERP system that satisfies the needs of larger businesses and provides support for multiple users and accounts. Conversely, QuickBooks Simple Start only behaves as an accounting system.

Alternatives to ERPs that integrate with QuickBooks

You might look at ERP software solutions and realize you aren’t ready to migrate to a solution that is described as an ERP system for large enterprises. 

In this case, a great alternative is to integrate QuickBooks with other tools. Is QuickBooks an ERP system on its own? No, but with it’s great functionality and subscription-based pricing, it can get you started. 

Remember that QuickBooks’ third-party apps are why it is viewed as an ERP system. Enter Method and its powerful, two-way sync with QuickBooks.

Method is the #1 CRM for QuickBooks users. It turns leads into customers by helping you capture every sales opportunity. It also gives you automation tools that save you time and increase customer satisfaction.

So, while some disagree over the question, “Is QuickBooks an ERP system?” the bottom line is that it helps you grow your business and turn a profit

Frequently asked questions

What is the meaning of ERP in QuickBooks?

You can effectively use QuickBooks as an ERP when you integrate it with solutions from its app ecosystem. Third-party apps enhance QuickBooks’  capabilities with inventory management and CRM features. 

What is an ERP system examples?

Examples of ERPs include SAP, Oracle, and Microsoft Dynamics.

What are the benefits of integrating ERP systems with QuickBooks?

Integrating ERP systems with QuickBooks makes businesses more efficient. It: 

  • Simplifies processes.
  • Reduces errors.
  • Sets the stage for business success.

Kickstart your QuickBooks ERP journey with Method:CRM. Start your free trial!

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