Five clear signs it's time to move from QuickBooks to an ERP

Many government contractors start with QuickBooks because of its affordability. Operating on a cash basis—much like personal finances—QuickBooks automates some basic accounting tasks. The challenge comes when your GovCon is ready to scale and quickly finds itself in need of a solution that can grow alongside it with the capabilities it needs.

As a QuickBooks user grows, so does the manual effort for accounting and finance, when ERP software could enable economies of scale. QuickBooks also lacks robust internal controls, which are critical for GovCons. If these limitations sound familiar, it may be time to consider moving from QuickBooks to a purpose-built ERP.

First sign: Simple questions take two days and a spreadsheet to answer

Whether you’re a project manager, Division VP, or CEO, you often hear or ask the question “Where are we?” While QuickBooks holds most of the data needed, extracting, filtering, and contextualizing it can take days—typically ending up in a spreadsheet. Meanwhile, a finance team member is pulled away from their usual tasks to tackle this time-intensive request.

Answering “Where are we?” should be straightforward and fast, with accurate, updated data available to you. But if that’s difficult in QuickBooks, then forward-looking questions like “Where are we headed?” or “Where will we end up?” become even harder. These require combining actuals with the project manager’s future plans—something that shouldn’t require a full data-gathering exercise. For broader views, like analyzing a portfolio of contracts, an ERP system should make these insights readily available in just a few clicks.

Second sign: Performance metrics require a month-end project

If you rely on metrics like employee utilization, Days Sales Outstanding, or wrap rates, are they readily accessible, or only available after monthly close? In QuickBooks, compiling this data for performance metrics can become a significant, time-consuming project.

Ideally, these metrics should update continuously, viewable on demand in reports or dashboards. An ERP system integrates performance metrics directly into transaction processing, eliminating the need for separate data-gathering efforts.

Third sign: Critical functions happen outside of QuickBooks

Is your finance team manually calculating revenue by project? QuickBooks limits revenue recognition to billed amounts, requiring manual journal entries to match revenue with the correct period. This reliance on manual data entry for revenue tracking underscores QuickBooks’ limitations as accounting software for GovCon, where robust ERP software could better streamline and automate these processes.

What about indirect rates? QuickBooks doesn’t maintain cost pools or calculate indirect rates, so finance teams often end up exporting data from the trial balance to spreadsheets, relying heavily on manual data entry. Since this accounting software doesn’t apply indirect rates to project-specific direct costs for project reporting, finance teams are left performing complex calculations outside QuickBooks.

Spreadsheets are hard to document, easy to “break,” and often need to be rebuilt from scratch by others. Finance teams using QuickBooks frequently find themselves reinventing these tools, only to manually re-enter data into QuickBooks afterward.

Relying on a web of spreadsheets around QuickBooks may provide some accuracy, but it’s far from efficient or scalable. This lack of integration highlights the need for an ERP system to achieve real economies of scale.

Fourth sign: Compliance activities are entirely manual

Your ERP software should provide an integrated timekeeping system that automates essential government compliance tasks. Instead of relying on manual processes, it should handle time entry reminders, restrict future entries, and manage completed timesheets, payroll, and labor postings. Likewise, your ERP should automate expense management by enforcing per diem limits, tagging unallowable expenses, and requiring receipt attachments. This automation not only simplifies compliance but reduces the need for time-consuming manual data entry.

When employees are subject to a Wage Determination under the Service Contract Act (SCA), your ERP system should store these determinations, automatically enforcing wage floors based on contract and location. Your ERP solution should also calculate benefit shortfalls for Cash-In-Lieu payments.

None of this should require spreadsheets or manual data transcription from QuickBooks Desktop or QuickBooks Online. While compliance doesn’t require automation, relying solely on manual processes brings high costs and risks, which a fully integrated ERP system can alleviate.

Fifth sign: You don’t have internal controls

QuickBooks lacks robust internal controls, a critical fault in secure accounting software. Internal controls come in two types: preventative and detective. Preventative controls, such as restricting changes to transaction dates or preventing re-billing on a new project, help prevent errors. Unfortunately, QuickBooks Desktop and QuickBooks Online lack these features, allowing unrestricted adjustments that can risk billing accuracy.

Detective controls, as the name suggests, track actions by recording who made changes and when. An essential form of detective control is the audit trail, but QuickBooks lacks this feature. Without an audit trail, detecting unauthorized changes or tracking down who made them is nearly impossible, posing risks for companies relying on accurate, secure data.

All signs point to Unanet GovCon ERP

Unanet GovCon ERP was purpose-built for project-focused businesses, offering essential features tailored to government contractors. It’s fully GAAP compliant, operating on an accrual basis to meet GovCon accounting requirements. It simplifies complex processes, ensuring reliable, project-based data tracking and reporting.

With Unanet GovCon ERP, you’ll give managers at all levels real time, accurate data, answering the critical “where am I” question instantly—not just from the last posted timesheets. It can consolidate projects or contracts into portfolio reports in seconds rather than days. With straightforward planning tools for labor, materials, and travel, Unanet GovCon also addresses “where am I going?” on the same reports, empowering decision-making with current, actionable insights.

You can calculate metrics in real time, displaying them on dashboards or reports without interrupting operations. All critical functions—including indirect rate calculation, GAAP-compliant revenue methods, and end-to-end invoice processing—are handled within the system itself. This eliminates the need for external tools, ensuring that all calculations, approvals, and postings are seamlessly integrated for streamlined workflows.

Unanet GovCon ERP’s compliance functionality is fully integrated, eliminating the need for manual inputs, calculations, or spreadsheet transcription for SCA compliance. Its GovCon-compliant timekeeping and expense systems come with built-in enforcement mechanisms for all required regulations. Employee timesheet entries appear in real time—no need to wait until the timesheet period ends. Transitioning from QuickBooks to ERP allows government contractors to streamline compliance without relying on outside tools.

Finally, Unanet GovCon ERP enables you with comprehensive internal controls, featuring robust detective controls like audit trails alongside preventative controls that prevent changes to posted entries or unauthorized modifications to timesheets and expense reports. Shifting from QuickBooks to ERP offers these essential safeguards, enhancing both data integrity and compliance for government contractors.

Does QuickBooks provide the automation, scalability, and stability needed for managing a project-based business? If not, it’s time to upgrade from QuickBooks to ERP. With Unanet, you can eliminate spreadsheet chaos, reduce human error, enhance efficiency, and gain real economies of scale. Discover how Unanet GovCon ERP elevates your project-based accounting today.

Looking to make business easy while freeing up more time to do the work that matters? Learn how Unanet can help. Schedule a demo today.