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The Hidden Costs of Staying with QuickBooks (Alone) in Manufacturing

The Hidden Costs of Staying with QuickBooks (Alone) in Manufacturing

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What follows is a story about what we often see from manufacturers using QuickBooks. Each one has their own specific story, but the result is the same.
Mark is the CEO and founder of a dairy production company in Kansas City. Go, Chiefs!
Like many businesses in town, Mark’s company started as a small family business operation with a single production line. In the beginning, they managed numbers with a well-configured Excel template. However, one day, Mark’s cousin Jerry recommended an accounting management system called QuickBooks.

The company had a good run with QuickBooks. It worked well for a while—tracking expenses and income, managing labor costs and handling accounting. They were happy —or so they thought.

Mark’s journey to realizing that he needed a specialized ERP to complement his QuickBooks system was long and filled with painful lessons.

Today, we share his story so that you don’t become a “Mark” and don’t have to experience what he went through to make the right decision. 

Lesson 1: Mark Lost Productivity

Over time, the company grew—production increased, and the number of clients tripled. Good news, sure, but let’s be honest—with growth comes challenges. It’s like Spider-Man said, “With great power comes great responsibility.”
Very soon, Mark noticed that QuickBooks struggled to support the company during this growth phase. Some examples:
  • QuickBooks lacks a production module essential for manufacturing, making it difficult to adjust batch sizes, optimize schedules, automatically convert sales to production orders, and track inventory with real-time formula adjustments.
  • QuickBooks is designed to track finished goods but lacks the tools to manage complex manufacturing processes or assemble raw materials. Mark's company struggled to manage input, costs, and quality controls for raw materials like starches, fats, emulsifiers, and food preservatives
These daily production problems gradually reduced their productivity. At first, Mark believed that QuickBooks was still running well and just needed a few operational tweaks.
Mark was very wrong.

Lesson 2: Mark Lost One of His Best Clients

The COVID-19 pandemic hit, and, like most businesses, it was a game-changer for Mark’s company. Demand for essential goods, such as medicines, hygiene products, and food skyrocketed to unprecedented levels.

Mark’s company had trouble keeping up with the production pace that the market demanded, especially when it came to maintaining product quality.

QuickBooks lacks built-in quality control features that are essential for manufacturing operations. This absence hampers the ability to monitor product quality, manage compliance, and maintain consistent standards. As a result, manufacturers face increased defects, customer dissatisfaction, and potential regulatory issues.

One day, Mark got a call from his third-largest customer. Somewhere, the quality management process had failed and the taste of the final product was…. well, let’s just say that that was the last call Mark ever got from that customer.

But that wasn’t the worst part. Since QuickBooks does not offer batch and serial traceability, the company could never pinpoint where the product quality failed—was it during the reception of raw materials, formulation, or storage? They never knew.
Not only did they lose one of their best clients, but from that day forward, they lived in constant fear of making the same mistake with another customer.
Now you might be wondering— could anything worse happen? Keep reading…

Lesson 3: Mark Couldn’t Manage Bills of Materials (BOM)

QuickBooks lacks the ability to create and manage bills of materials effectively. It cannot handle specialized manufacturing functions, such as routing or copying from existing BOMs — features that are essential features for engineering and production efficiency.

As production volumes increased dramatically, Mark and his team lost control and efficiency. Without full visibility into the components, special instructions, routes, and stages required to manufacture both their existing and new products quickly spiraled into chaos.

If you are finding Mark's story useful, we recommend that you take a look at our blog at the end of this article: “10 REASONS WHY YOU SHOULD CONSIDER REPLACING QUICKBOOKS”.

Final Lesson: Mark Lost Profitability

For those of you who have made it this far in Mark’s story, I ask you not to judge him. CEOs have a lot on their minds, many worries, and many people depending on them. This sometimes narrows their focus to one thing: profitability.
When Mark discovered the money he was losing without advanced cost analysis capabilities, he realized that QuickBooks alone wasn’t enough.
Mark’s team struggled to:
  • Accurately calculate direct production costs
  • Allocate indirect costs like labor and overhead
  • Managing multiple cost levels for raw materials, intermediate products, and finished goods.

Mark also faced significant challenges, such as accurately costing batch production, especially when dealing with variable yields, ingredient substitutions, and waste. These gaps led to skewed margins and poor financial decisions.

BatchMaster ERP Specializing in Manufacturing

It took Mark a long time and many hard lessons to realize that QuickBooks needed to integrate with manufacturing ERP. Not just any ERP, but one specializing in the food industry.

Today, with the implementation of an ERP specialized for the food industry, Mark’s company has successfully integrated key functionalities into its daily operation, such as:
  • Manufacturing management
  • Quality control
  • Traceability
  • Warehouse management
  • Cost analysis
  • Back office and manufacturing integration
  • BOM management
  • And, more
Don’t be a “Mark.” If you’re using QuickBooks alone to run your manufacturing business, it might be time to consider a system that complements its capabilities and addresses your industry’s unique challenges.
Click the link below to learn more about BatchMaster ERP for QuickBooks and how it helps manufacturers support growth.
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