Learn about the key differences of Microsoft Dynamics 365 Business Central vs QuickBooks for your small or medium-sized business. The first step in future-proofing your business with the appropriate software tools is determining which solution is right for you. For reasons you will discover, many growing businesses are choosing Business Central for their financial management and ERP needs over QuickBooks.
Microsoft Dynamics 365 Business Central and Intuit’s QuickBooks are cloud software solutions that provide accounting tools for small and medium sized businesses. When comparing Business Central vs QuickBooks, it is important to know that Business Central is a full ERP solution with CRM capabilities and QuickBooks is an accounting solution. Meaning, Business Central includes tools beyond financial management shown by this diagram:
The comprehensive nature of Business Central is the main differentiator from QuickBooks. Therefore, it is often seen that businesses consider Business Central when they begin to outgrow QuickBooks. QuickBooks provides strong accounting capabilities for businesses when they are getting started and it makes sense that it has become the industry standard for SMB accounting. However, QuickBooks has significant limitations that must be addressed as a business grows. This article will compare the capabilities of Microsoft Dynamics 365 Business Central vs QuickBooks, giving a comprehensive overview of both, with a focus on scalability, security, and practicality.
The core value propositions for a comprehensive ERP solution such as Business Central over a pure accounting solution are data and process unification. As can be seen in the table below, Microsoft’s Business Central solution can cater to the financial management needs that QuickBooks does, plus much more.
The above graphics show the high-level functionalities available at the Business Central Essentials tier, there is a Premium tier that also includes service management and manufacturing modules in addition to those listed above. Depending on your feature needs, Microsoft have broken Dynamics 365 Business Central licensing into two price tiers:
Business Central licenses include unrestricted access for team members, three external accountant licenses, and unlimited companies.
Native integrations with Microsoft 365 and Office 365 through Dataverse allow for one version of the truth through reliable data sharing between all Microsoft applications. Additionally, this means users can send invoices from Business Central using Office 365 functionalities. Another benefit of Dataverse is the opportunity to use Power Apps and Microsoft Flows to automate certain operations by creating workflows. Unified data and automation are invaluable for efficiency and can be a lifesaver for businesses with tight margins.
Some organizations might need extra manufacturing and service management features as part of their ERP package. Business Central Premium includes additional functionality in these areas. Additional manufacturing tools include:
Business Central Essentials does include assembly management standard for manufacturing as well. Manufacturers and distributors will be pleased to know that inventory features at the Essentials tier include serial and batch number creation for accurate tracking.
Additional service management features include:
These features are highly valuable for field technicians and service personnel for scheduling service, service orders, assigning service personnel based on availability and skill, estimates, and invoicing for services.
These service management and manufacturing features come at an additional price of $30 per user per month.
QuickBooks is an accounting and financial management software solution that, in addition to accounting, can handle inventory, tax filing, payroll, budgeting, invoicing, bank account tracking and reconciliation, expense management, payment processing, accounts payable, and accounts receivable management. This is fairly comprehensive for small businesses and can fulfill the needs of many businesses for a period of time, depending on complexity of operations and industry. As a result of QuickBooks’ financial management strength, it has managed to gain an 80% market share between QuickBooks standard flagship solution, QuickBooks Online, and QuickBooks ADP.
However, as operations become more complex, QuickBooks does not have the functionality to accommodate, as it is not a complete ERP solution. Consequently, businesses are forced to seek out other solutions or third-party add-ons to handle non-accounting functions. Commonly, leaders within departments choose specialized software to meet their specific needs and businesses will, for example, purchase one tool for manufacturing, one for CRM, and another for distribution. This can create a disjointed business with data siloed in separate applications that do not natively integrate. With profit margins for SMB’s being as fine as they are, time wasted on determining the correct version of the truth between many data locations can be a detrimental hindrance.
The ability to scale is a key consideration for growing businesses contemplating software purchases. While Business Central can be deployed as an on-premise or hybrid computing model, most SMB’s should have preference towards the cloud model because of the elimination of up-front investment in hardware and the cloud security benefits. When evaluating any cloud software, scalability must be factored in. Your ERP and accounting systems should be driving growth in your organization, not hindering it.
The superior scalability of Business Central is an essential differentiator from QuickBooks. Business Central is a solution that accommodates your growth and has the complete toolset remove complications when your business needs additional tools or resources. Even if your business is not ready to utilize a full ERP system with CRM capabilities, it is advantageous to have the option readily available in the future. For some customers, only the financial features may be necessary in the short run and that is completely accommodated by Business Central. It makes sense to save on licensing costs with Business Central and to have a solution that is prepared to grow with your organization. There are a few key areas where QuickBooks can hinder growth that will be explained and how Business Central equips organizations for growth in these areas.
One aspect that can hinder growth are user caps. If your software cannot accommodate the number of users needed to effectively run the business, it must be replaced. QuickBooks Pro and Premier are best suited for 1 to 4 users and QuickBooks Enterprise can accommodate up to 30 simultaneous users. This is significantly less than the 300 users that are possible on Business Central.
Another area where QuickBooks falls short vs Business Central when scaling is international business. Business Central is designed as a global solution that can accommodate international supply chain operations and accounting in multiple languages. QuickBooks does not natively support multi-lingual capabilities. Additionally, when dealing in multiple currencies, Business Central offers more multi-currency transactions in inventory and general ledger functionality.
Furthermore, database scalability is a factor when evaluating long-term viability. Business Central is backed by Microsoft Azure, a cloud computing platform trusted by 95% of Fortune 500 companies, and the United States government. Azure utilizes databases all over the world and can provide the reliability, protection, and service level agreements that modern businesses demand. Read more about Azure’s security, pricing, and performance, as well as consistent updates. This is a significant area of superiority for all Microsoft Dynamics 365 applications. On the other hand, QuickBooks relies on a single-file storage model where the file continues to grow and adversely affect application speed. This is a drawback for businesses that will lead to problems in the future.
In terms of investment, multiple factors must be considered. Mainly, licensing costs and in the case of QuickBooks, hosting service fees. QuickBooks Silver, Gold, and Platinum for Enterprise are $84, $109, and $134 per user, per month in licensing fees. However, in order to achieve the same level of anywhere, anytime access that Microsoft’s Business Central solution can offer, businesses would have to pay hosting fees on top of this, in the region of $50 per user, per month. This means that per user, each month it would cost $184 for QuickBooks Platinum for Enterprise. Considering the additional features Business Central Essentials or Premium offer at $70 or $100 per user, per month, using QuickBooks for Enterprise does not make much sense from a licensing standpoint.
For financial and capacity reasons, it is said that businesses “outgrow” QuickBooks. Eventually, more users need access to the financial systems and other aspects of the business need software to run efficiently as well.
Additional areas where Business Central offers more options than QuickBooks are user roles and security. In QuickBooks, user roles are vague and do not have the necessary granularity for growing financial management teams. Roles are activity-based, rather than permission-based, meaning that if a user can edit invoices, they can edit invoices for any account. This is concerning because some users should not have access to all accounts by default. Business Central allows for significantly more fine tuning and gives admins far more control over permissions. This is useful when accountants have specific accounts they are responsible for, ensuring other users cannot edit information they are not held accountable for. Clearly defined roles and permissions provide organization for finance teams and reduce confusion over user responsibility.
Beyond customizable permissions, Business Central allows for user-specific menus, reducing clutter and allowing them to focus purely on the information relevant to them. These menus will show users only the processes, reports, and tasks relevant to their role, reducing risk of human error. Permissions can be defined on an individual or group level and are supported in corresponding web-based reporting portals.
Audit trails are also a key differentiator between the two solutions. QuickBooks is limited by having a transactional audit trail that can be circumvented or even deleted. This means it neither captures information regarding sign on and sign offs, nor changes to master records. Business Central’s audit trails collect all this information, and requires records be reversed rather than deleted, allowing for audit trail validity. Overall, Business Central gives superior protection against errors and increases accountability.
When running a finance team, reporting is crucial. Reports guide your business, identifying areas of efficiency and areas that can be improved upon. A commonly cited shortcoming of QuickBooks is that it has limited options for general management and financial reporting. Business Central has a vast selection of reports that span from daily order analyses to comprehensive sales representative performance analysis reports. Areas that Business Central accommodates in-depth reporting include:
This arsenal of reporting options facilitates a better understanding of your business metrics and reduces the difficulty when evaluating personnel, operations, machinery, and many other aspects of your business. Small and medium sized businesses cannot afford poor visibility. Operations must be optimized, and accurate reporting is a strong first step in determining where value is being lost and created.
For more advanced reporting features, you can take advantage of Microsoft’s Power BI product.
Customer relationship management software is essential for businesses involved in sales, marketing, and customer service. Keeping track of client data, interactions you have had with clients, and future follow-ups eventually become impossible to keep track of using paper or spreadsheets. Additionally, by not collecting comprehensive data on customers you are severely hindering your marketing efficacy. Customer data is the most important ingredient when creating buyer personas, designing campaigns, or targeting paid advertisements. If you don’t fully understand your buyer, you cannot provide them with their ideal buying experience. Furthermore, tracking sales and customer service interactions through a CRM keeps your business professional and takes the mental strain off your customer-facing team trying to remember each individual customer’s needs.
As previously stated, QuickBooks is for financial management and accounting only; it does not have CRM capabilities. A mistake companies make when they develop the need for a CRM is attempting to integrate it with QuickBooks. This is not the most strategic approach for a growing business financially or operationally. On top of the licensing costs for QuickBooks and the hosting fees, integrating a separate 3rd party add-on with additionally licensing costs is an expensive proposition. When you consider the integration investment, training, and specialized maintenance of a new, unfamiliar software tool this strategy starts to become clearly inferior to a more comprehensive solution. QuickBooks can also be difficult to integrate with 3rd party CRM’s.
To avoid the added expense and potential for data silos, it is preferrable to take a more future-oriented approach. Business Central includes CRM capabilities standard and is already less expensive than QuickBooks’ enterprise options without additional CRM licensing costs. Unifying data, operations, and support with a single solution keeps everything simple for your team. Unification of support is a factor many overlook. Having one company to go through when issues arise is ideal because Microsoft Business Central experts have the expertise to solve your problems in any area of the software because they are familiar with all aspects of the solution. Conversely, having multiple software providers that do not have knowledge of the other’s systems can create significant problems.
Even if your business is not yet ready to integrate a CRM, it makes sense to save money on licensing fees versus QuickBooks anyways and have the option available when your business grows into it. Moreover, if you already have a CRM that your team is comfortable with and would prefer to continue using, Business Central, like all Dynamics 365 solutions, can integrate with that as well. Microsoft partners, such as Avantiico, have the expertise to facilitate a smooth integration.
If your business decides to utilize Dynamics 365 Sales or Dynamics 365 Customer Service for CRM, a dual write implementation can be done to ensure real-time data sharing with Dynamics 365 Business Central.
There are factors to consider when comparing QuickBooks vs Dynamics 365 Business Central for your business. Business Central has clear advantages in terms of:
As a complete ERP solution, Business Central has more capabilities and capacity than QuickBooks. Business Central’s ability to scale and accommodate far more users makes it the ideal solution for growing businesses. Lower licensing costs make it an option even for businesses that are not ready to use all its tools. Select Business Central for your financial management needs to set your business up for the future and accommodate growth.
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