Are you thinking about purchasing QuickBooks but unsure whether you can fit within the product’s limits? Not sure what those limits are?

Are you a QuickBooks users wondering when your company will hit the limitations build into the Intuit accounting system?

Luckily Intuit publishes the limitations of QuickBooks Pro on their website so that you can review them ahead of time to decide whether your company will fit into the capabilities of QuickBooks Pro.

First, consider that overall QuickBooks is designed for companies with under 20 employees and less than 2 million dollars of annual revenues. That doesn’t mean it won’t work for larger companies. It only means that the typical QuickBooks users are within these parameters. Companies that are expecting to grow beyond these capabilities might consider starting with a more robust accounting system to avoid a migration as the company grows.

Intuit provides some guidance for determining if your company will fit within their product limitations:

QuickBooks is designed for small businesses with 20 or fewer employees and annual revenue of less than two million dollars. The ideal use of QuickBooks is to keep at least two years of detailed transactions in a company data file so that you can run comparative reports and have prior-year project information.

The rate of growth of QuickBooks company data files varies significantly from company to company. There is no “average” or “typical” data file size, since businesses track different information. How quickly a file grows depends on the number of transactions, the amount of information entered per transaction, and the number of “links” per transaction.

For example, someone who enters 500 1-line invoices per month might find that their data file is smaller than another person who enters 100 5-line invoices per month, while someone who usually receives five separate payments per invoice would have a larger file than someone who typically receives only one payment per invoice.

To estimate if QuickBooks is right for your small business, take the average number of monthly transactions (remember, an invoice, payment, and deposit would be three separate transactions, and a bill and bill payment would count as two), and multiply by 2 KB to determine how much the data file will grow each month.

For example, if your company enters an average of 300 transactions per month, your data file could grow 600 KB per month (300 x 2 KB = 600 KB), or 7200 KB per year (600 KB x 12 = 7200 KB). If the annual data file size is less than 15,000 KB, then QuickBooks should be more than sufficient for your company. (Present QuickBooks users can check the size of their QuickBooks file by choosing Help > Product Information.)

One reason that Intuit talks about file size limitations is that many existing QuickBooks users could find reporting and speed of data entry gets much slower as the data files grow.

Here is a list of the limitations of field sizes within QuickBooks. The main issue with these limits could be the account number size which is restricted to only 7 characters.

Character Limitations for QuickBooks Fields

Here is another Intuit QuickBooks chart showing the limits on numbers of records. Note that while you may have up to 10,500 employees, vendors and customers individually, combined they cannot exceed 14,500 or you’ll be forced to migrate. Inventory limits may seem robust however growing companies – especially wholesale distributors – often carry a broad catalog of items from multiple suppliers. These items can easily grow to exceed 14,500.

Inventory limits may seem robust however growing companies – especially wholesale distributors – often carry a broad catalog of items from multiple suppliers. These items can easily grow to exceed 14,500.

Unfortunately, too many companies don’t consider these hard limitations before investing hours of labor into using QuickBooks for their statup.

Our recommendation:

1. If your company can fit within QuickBooks and you do not expect to grow within the next 5 years then you’re probably on the right path if you are investigating QuickBooks as an option.
2. If your company expects to grow past $2 million in revenues or will deal with more significant inventory capabilities and pricing then consider skipping the entry-level QuickBooks Pro and looking at alternatives. Your goal should be to avoid a migration in the future just as your company is growing rapidly and can least afford to interrupt their business processes.

To speak with us here at Schulz Consulting and discuss ways in which Sage 100 might be a better fit for your company, please use our contact form. Someone will call or email within 2 hours to discuss any questions.