However, as manufacturers reach certain growth milestones, they start requiring more specialized software to manage key aspects of their operations, including: 

• Inventory management.
• Sales.
• Customer support.
• Human resources — and more.

At the same time, leveraging QuickBooks data to drive other business functions — while feeding information back — helps keep your finances aligned with growth. This reduces the risk of: 

• Information gaps.
• Manual data entry errors.
• Inefficient bottlenecks.

That’s why it’s beneficial to explore how you can extend QuickBooks for other parts of your manufacturing business through add-ons and apps. Read on for more details.

Can you use QuickBooks for manufacturing?

While QuickBooks offers some inventory management tools like tracking raw materials, managing customer communications, and pricing inventory, it has limitations for manufacturers. It’s primarily designed to manage the financial side of your business.

However, QuickBooks isn’t an optimal solution on its own when it comes to more product-oriented tasks like: 

• Work-in-process (WIP) inventory tracking.
• Bills of materials.
• Production planning and scheduling.
• Managing complex operations.

QuickBooks Online’s manufacturing capabilities

QuickBooks Online provides a solid foundation for financial management, but its manufacturing-specific features are limited. While it offers basic inventory management capabilities like tracking raw materials and finished goods, growing businesses with complex processes may find QuickBooks Online insufficient.

For example, QuickBooks Online can track individual component items but can’t convert these into finished items automatically. This requires manual reconciliation of component stock reductions and finished product stock increases. Additionally, QuickBooks Online may experience performance issues when handling large volumes of data as operations scale.

QuickBooks Enterprise’s manufacturing capabilities

QuickBooks Enterprise offers more industry-specific features for manufacturers compared to QuickBooks Online. These include:

• Deeper inventory management.
• Bill of materials cost tracking.
• Job costing.
• Multi-location support.
• Custom price levels for different customers.

QuickBooks Enterprise also provides pre-loaded reporting templates for better production line visibility, such as:

• Inventory Valuation Summary Report.
• Inventory Stock Status by Item Report.
• Assembly Shortage by Item Report.

While QuickBooks Enterprise offers more manufacturing-specific capabilities than QuickBooks Online, it still has limitations and a steeper learning curve. Its core strength remains in accounting and financial management rather than optimizing manufacturing processes.

How to get more out of QuickBooks for manufacturers

To maximize the value of QuickBooks for manufacturing businesses, consider integrating compatible third-party apps that support wider business processes. Two key areas to focus on are to:

Use a QuickBooks MRP

A QuickBooks material requirements planning (MRP) suite lets you oversee your entire manufacturing process, from inventory management to production management and warehousing. Unlike QuickBooks alone, an MRP is purpose-built for manufacturing tasks and can account for specific challenges you’ll face as you scale.

Add a QuickBooks CRM

A customer relationship management (CRM) system houses information on current and potential customers, supporting front office teams in driving sales and growth. The right CRM will integrate with your QuickBooks account, connecting financial data to help make informed decisions on pricing, market targeting, and sales process optimization.

Top QuickBooks add-ons for manufacturing

Katana MRP

Image credit: Katana

Katana is a popular manufacturing and inventory management software that integrates seamlessly with QuickBooks. It offers features like:

• Real-time inventory management.
• Production planning and scheduling.
• Purchasing and supplier management.
• Integrations with e-commerce platforms.

Pricing

Katana MRP offers three subscription options: 

• Starter: $179 per month billed annually. 
• Standard: $359 per month billed annually. 
• Professional: $799 per month billed annually. 

Method CRM

Method is a highly customizable CRM that works perfectly with QuickBooks for manufacturing businesses. Key features include:

• A two-way instant QuickBooks sync.
• 100% customizable workflows and automation.
• Out-of-the-box customer portal.
• Advanced reporting and analytics tools.

Pricing

Method CRM offers three subscription plans:

• Contact Management: $25 per user per month.
• CRM Pro: $44 per user per month.
• CRM Enterprise: $74 per user per month.

Each plan offers varying functionalities and capabilities, depending on the stage your business is in and its unique needs. Method also offers a free trial with no credit card required.

Wrap-up: QuickBooks add-ons for manufacturing

For manufacturers requiring advanced functionalities that fall outside the scope of finance — such as production scheduling, detailed bills of materials, and comprehensive reporting — QuickBooks may not be enough.

To bridge these gaps, manufacturers can benefit significantly from integrating specialized add-ons like Katana MRP and Method CRM. Katana MRP enhances inventory tracking and production planning, while Method CRM facilitates customer relationship management and saves time with features like its two-way QuickBooks sync and customizable workflows. 

As you explore your options, it’s essential to evaluate the specific needs of your manufacturing operations and consider how these add-ons can enhance them. When you leverage the right tools, you can build a software system that both saves time and cuts costs.

Extend the limits of QuickBooks. Try Method for free.

The post QuickBooks add-ons for manufacturing: What to know appeared first on Method.

Think of WIP as the story explaining what’s happening between your raw materials at the starting point of your production process, and the finished goods at the end of it. 

WIP is the value of whatever’s sitting in the middle. It helps you understand the real financial health of your business, and it uncovers problems and opportunities in your processes.

What is work in process (WIP)?

Work in process basically refers to unfinished products, or goods that are still in the production line. 

Think of a lamp. When you start producing it, you have the raw or primary materials, such as plastics and metals. Then, at the end, you have a lamp, and that lamp has a price or value.

But what about that thing between the raw materials and the final product? 

Just because your lamp isn’t finished yet, it doesn’t mean it lacks value. Not only did the raw materials necessary cost money, but so did the labor, energy, and factory equipment. 

This unfinished lamp is, basically, an item under WIP, which is then listed on your balance sheet. 

It includes the cost of the materials, direct labor, and any overhead (like the cost of factory gear) expenses. Some might also refer to WIP as “goods in process.”

As you might guess from the example, WIP is often used by companies with standardized and repetitive production cycles. 

They focus on smaller products with higher production quantities, and typically treat WIP as short-term assets with quick completion and selling times. 

Why is WIP important?

When your raw inputs enter the manufacturing process, they actually gain value because of the labor and overhead costs (from factory equipment, for example) that goes into them. 

WIP is key for tracking that value, and when you do so, you build a WIP inventory.

WIP might seem like overkill for simpler products, but in today’s world, more manufacturers are actually dealing with complex workflows. 

A car manufacturer, for example, deals with both raw materials and manufactured goods (called sub-assemblies). 

With more manufacturers dealing with these complicated multi-layer production processes, WIP is key in explaining the story between just the raw materials and the final product. 

With those insights at hand, manufacturers can use WIP to:

Eliminate production bottlenecks

High WIP levels can be a sign of bottlenecks in your production process, leading to delays and slower output. You can use WIP information to start identifying where those bottlenecks are and, in turn, remove them to produce and deliver faster.

Lower costs and raise margins

Large WIP volumes could eat up resources and drive up storage costs. But as you start cutting bottlenecks in the process, you can start freeing yourself of those added costs. This could help you cut production expenses, reduce waste, and make better use of our resources.

Allocate resources better

WIP inventory information gives you an idea of how your raw materials, labor, and facilities are being used. 

You might find that there are bottlenecks because one part of the process wasn’t getting enough attention, while another part was getting too much. With your WIP information, you can shift things around and achieve better overall results. 

Improve quality assurance

Keeping an eye on WIP information also helps you catch quality problems. For example, there could be delays in one part of the process due to lower quality work earlier on. 

You can use the WIP inventory information to investigate, find, and solve those issues. Not only could this lead to better quality work, but even a higher production output.

Make customers happier

Dealing with high WIP levels could help you produce things faster at a higher quality and, in turn, deliver them to customers earlier. 

Provide better financial reporting

Finally, WIP information ties back to your bottom line. It gives you visibility into the total value of your output, not just in terms of raw materials and finished goods, but everything in between too. 

This can help with forecasting, seeing if you’re able to meet customer demand, predict problems like excess inventory, and other issues. 

How to Calculate WIP

There are three main parts in a WIP formula, which are:

• Beginning WIP inventory value: This is the WIP inventory at the end of your previous accounting cycle.
  
• Production cost: This is the cost of the labor (including wages, benefits, etc), materials (be it raw or sub-assemblies), and overhead (indirect costs, like the factory equipment, facility costs, maintenance, etc.) during the current accounting cycle.
  
• Cost of manufactured goods (COGM): This is the cost of the finished or completed goods. COGM is subtracted in the formula because it represents the goods leaving or transferring out of WIP inventory and into the finished goods inventory.

Work in Process formula

The formula to calculate the WIP is the following:

Ending WIP Inventory = (Beginning WIP Inventory Value + Production Cost) – COGM

How to interpret WIP

High WIP Levels

High WIP inventory values could indicate a high level of production activity or a backlog of orders yet to be fulfilled. It can be a positive revenue sign for the long-term.

However, at the same time, WIP also flags potential issues in your production process, such as bottlenecks or delays. If unresolved, these issues could lead to higher holding costs or possible cash flow problems down the line. 

Low WIP Levels

Low WIP levels tell you that few items are in an unfinished state at the end of each accounting cycle, which could be a sign of efficient production practices. On the other hand, it could also be a sign of under-used production capacity.

How to track WIP inventory

By this point, you’ll have a good idea of what goes into a WIP calculation, but how do you get the actual information? Well, for that task, you have two main options:

1. Manual techniques

For smaller companies, a spreadsheet with columns specifying details like item information, quantity, material and production costs, production stage, and target completion date is the starting point. It’s simple and low cost to set up.

2. Automated software

As your operations grow in scale and complexity, manually filling and tracking spreadsheets can become error-prone. When you reach this point, you should invest in software that will automate your inventory management and production management tasks.

How to use WIP to improve production and inventory

If you’re finding that you have higher than expected or acceptable WIP inventory levels, then the following tactics could help bring it under control.

Look for potential bottlenecks

Bottles are among the likeliest causes of high WIP inventories. Somewhere along your chain, there is something slowing your production output. These bottlenecks could be (among others) faulty equipment, inefficient processes, or lack of staff training.

Consider industry-standard manufacturing processes

To help solve for bottlenecks, you could look at implementing industry-standard manufacturing processes, like lean manufacturing/just-in-time manufacturing. 

Improve production scheduling

Using a manufacturing resource planning (MRP) suite can help you plan and schedule your production tasks in ways that minimize downtime, improve visibility, ensure on-time delivery, better manage resources, and align with order requirements. 

Pay attention to other parts of your business

While your inventory is the main reference point for understanding your WIP levels, it’s not the only piece of the puzzle.

For example, a high WIP level due to delays could impact customers who are expecting their orders to be fulfilled by a certain time. You might even be running into production delays due to faster than planned sales cycles. 

Next steps: invest in the right software

From the tips above, you can gather that many parts of your wider business (like sales and customer support) can impact WIP. So, as you grow, it’d be a good idea to track these other factors. But to track these other parts, you need different types of manufacturing software.

See our guides for more tips on perfecting your inventory management!

• How to keep track of inventory: A beginner’s guide
• Best manufacturing inventory management software
• What to look for in a manufacturing inventory management system

The post What is work in process (WIP) and how to use it appeared first on Method.

The short answer is that after September 30, 2024, Intuit will no longer be selling QuickBooks Desktop.

But what does that mean, and what are the specific details Intuit has provided so far? And most importantly, where do you go from here?

This article will guide you through everything you need to know about the QuickBooks Desktop discontinuation and your options moving forward.

Let’s get started!

What does service discontinuation mean?

Is QuickBooks Desktop being phased out? Yes, service discontinuation means that Intuit will no longer provide updates, support, or sales for specific versions of QuickBooks Desktop. This includes critical security patches and updates, making it essential for users to consider their next steps.

Is QuickBooks Desktop going away?

You may be wondering: is Intuit discontinuing QuickBooks Desktop in its entirety, or does QuickBooks still have a desktop version? While QuickBooks Desktop will no longer be sold or supported for certain versions in the near future, QuickBooks Desktop Enterprise products will remain available as Intuit’s sole desktop accounting solution.

That being said, for all intents and purposes, QuickBooks Desktop as it’s evolved over the years will soon be obsolete. Since December 10th, 2021 — when Intuit switched Desktop to a subscription-only service and did away with one-time purchases — QuickBooks Desktop’s days have been numbered.

To learn more, keep reading or check out our video below.

What led to QuickBooks Desktop being discontinued?

QuickBooks discontinuing Desktop is part of Intuit’s broader strategy to focus on cloud-based solutions. The reasoning for this is driven by several factors:

• Technological advancements: By focusing on newer versions and cloud-based solutions, Intuit can offer more advanced capabilities and ensure compatibility with modern operating systems and hardware.
• Resource allocation: Intuit is prioritizing fewer versions of its products to dedicate resources to enhancing features, improving security and compliance, and providing timely support for the most current versions.
• Cost savings and profitability: Maintaining older, one-time purchase software versions is costly, and shifting to cloud-based solutions like QuickBooks Online provides a more predictable and stable subscription-based revenue stream. Cloud solutions also offer higher profit margins, easier updates, and better opportunities for upselling premium features.

When does QuickBooks Desktop service discontinuation take effect?

But exactly when is QuickBooks Desktop going away? Initially set for July 31, 2024, the discontinuation date has been extended to September 30, 2024 and only applies to US subscribers. This gives QuickBooks Desktop customers a bit more time to plan their transition.

What specific products will Intuit no longer be selling/supporting?

The discontinuation affects most QuickBooks Desktop versions, including:

• QuickBooks Desktop Pro.
• QuickBooks Desktop Premier.
• QuickBooks Desktop Mac.
• QuickBooks Desktop Enhanced Payroll.

Will current subscriptions to QuickBooks Desktop be discontinued?

While new customers cannot purchase these versions after the cut-off date, existing QuickBooks Desktop subscriptions will not be discontinued. 

This means those who have already subscribed to QuickBooks Desktop Pro Plus, Premier Plus, Mac Plus, and Desktop Enhanced Payroll can continue to maintain and renew their subscriptions beyond the cut-off date of September 30, 2024. Intuit will continue to provide security updates and support for these existing subscriptions.

Keep in mind that down the road, current subscriptions can and likely will be discontinued eventually. 

Is QuickBooks Enterprise affected by this change?

QuickBooks Enterprise will continue to be supported and sold. Both new and existing customers can continue to purchase and renew QuickBooks Enterprise subscriptions after the date of discontinuation.

QuickBooks Desktop sunset: What’s next?

As we approach the QuickBooks Desktop end of life period, you need to prepare for the future. Here’s a detailed guide with your three primary options to help you navigate this transition smoothly.

Option 1: Upgrade to QuickBooks Desktop Enterprise

Users of QuickBooks Desktop Pro, Premier, Mac, and Enhanced Payroll can consider upgrading to QuickBooks Desktop Enterprise. 

This version offers enhanced features, such as the ability to handle larger data files and support for up to 30 simultaneous users. 

QuickBooks Desktop Enterprise also includes advanced reporting capabilities and customizable dashboards for all of its Gold, Platinum, and Diamond versions. It also fully includes QuickBooks Desktop Payroll options if you’re worried about losing access to Enhanced Payroll.

To upgrade, ensure your systems meet the necessary requirements and consider consulting an IT professional for network setup or a QuickBooks ProAdvisor for assistance with data migration.

Option 2: Switch to QuickBooks Online

For those ready to move to the cloud and discover the latest critical security patches and updates from Intuit, you can move from Desktop to QuickBooks Online. Intuit offers a seamless transition with these four steps:

1. Prepare and export your data

Back up all your data to ensure nothing is lost during the transition. Here’s how:

1. Ensure your QuickBooks Desktop software is up to date. Press F2 to check your current version.
2. Look for your product name, product number, and license number in the Product Information window.

Image credit: QuickBooks

3. Update your QuickBooks version if necessary (while on the “No Company Open” screen, find the “Help” menu and select “Update QuickBooks Desktop”).
4. Press Ctrl+1 to check the total targets. If your file exceeds 750,000 targets, you may need to reduce the file size by condensing data or start fresh in QuickBooks Online.

Image credit: QuickBooks

5. Print a copy of your Sales Tax Liability report. Go to Reports > Vendors & Payables > Sales Tax Liability, select All Dates, and save it as a PDF.

Image credit: QuickBooks

6. To prepare payroll data, terminate or deactivate employees who are no longer working for you and ensure all recent payroll data is transferred by waiting 2-3 days after running payroll before moving your data.

2. Plan the migration

Create a detailed migration plan to minimize disruption to your business operations when you move to QuickBooks Online.

Choose a time for the migration that minimizes business disruption, preferably after-hours or on a weekend.

If necessary, consult an IT professional for network setup and a QuickBooks ProAdvisor for data migration assistance.

3. Choose a payment plan

Select a payment plan that fits your business needs.

QuickBooks Online offers several plans: 

• Simple Start: $30 per month.
• Essentials: $60 per month.
• Plus: $90 per month.
• Advanced: $200 per month.

Compare the features and pricing to determine the best fit for your business needs.

You can either sign up for a 30-day free trial or take advantage of any promotional discounts. Visit the QuickBooks Online website or contact their sales team for assistance.

4. Convert your data

The last step is to export and convert your data. Here’s how:

1. Log in as an admin, go to Company > Export Company File to QuickBooks Online.

Image credit: QuickBooks

2. Select “Get Started,” and then click “Start export” when prompted.

Image credit: QuickBooks

3. Sign in to QuickBooks Online as an admin and choose the company to replace in the “Choose online company” drop-down menu.
4. Click “Continue” and enter “Agree” in the text field. 
5. Choose “Replace” and confirm by clicking “Yes, go ahead and replace the data.”
6. If you track inventory, select “Yes” to carry that data over, then specify the “as of” date. Or, select “No” if you want to set up items later (only available in Plus and Advanced).
7. Connect your bank accounts and set up any additional features required for your business operations.

QuickBooks Online vs. Desktop: What’s the difference?

QuickBooks Online offers cloud-based accessibility, automatic updates, and real-time collaboration. On the other hand, QuickBooks Desktop provides a more traditional, standalone software experience.

QuickBooks Online’s advantages include:

• Cloud-based accessibility for access anywhere, any time.
• Ease of use.
• Over 750 third-party supported integrations.
• A mobile app.
• Automatic updates and security.

That said, it also has its disadvantages:

• Limited advanced features (i.e., advanced inventory management and job costing​​​​).
• User limitations (25-user maximum).

In contrast, QuickBooks Desktop strikes a different balance of pros and cons. Here are some of its advantages:

• Advanced features for inventory management, job costing, and industry-specific reporting.
• Local installation, which can be preferable for businesses that require more control over their data and/or do not always have reliable internet access​​.
• Detailed, customizable reporting tools (i.e., the QuickBooks Statement Writer for GAAP compliance).

Its disadvantages include:

• Lack of accessibility.
• Integration limitations.
• Discontinuation for new users.
• Higher cost.

What if QuickBooks Online doesn’t meet all my needs?

If QuickBooks Online doesn’t meet all your needs, don’t worry — you have other options. Evaluate your specific requirements, such as: 

• Advanced inventory management.
• Industry-specific features.
• Particular integrations that you need. 

You might find that QuickBooks Desktop Enterprise suits your needs better. Or, you might consider other accounting platforms outside the QuickBooks ecosystem. Consider consulting with an accounting professional to help identify the best solution for your business.

Option 3: Migrate to another accounting platform, like Xero

You may choose to switch to a bookkeeping or accountant software not associated with Intuit. If you’re considering alternatives to QuickBooks, Xero is a robust accounting platform worth exploring.

Image credit: Xero

Xero offers a range of features, including: 

• Real-time financial data.
• Comprehensive reporting.
• Seamless integrations with numerous third-party apps. 

Its user-friendly interface and cloud-based accessibility make it an excellent choice for businesses looking for flexibility and scalability. 

Is QuickBooks Desktop still available before the sunset period?

Yes, QuickBooks Desktop is still available for purchase before the sunset period. Intuit will continue selling new subscriptions for QuickBooks Desktop Pro Plus, Premier Plus, Mac Plus, and Enhanced Payroll until September 30, 2024.

How do I purchase QuickBooks Desktop Plus (Pro, Premier, or Mac) or Desktop Enhanced Payroll before the cut-off date?

If you need to purchase these products before the cut-off date, you can contact Intuit’s sales team or call them at 1-888-829-8589. You can no longer purchase them online the traditional way.

If you are looking to purchase an older version of Desktop, be aware that the QuickBooks 2021 end of life date has passed (May 31, 2024). Because QuickBooks Desktop 2021 discontinued before the cut-off date, you can no longer purchase or find support for any versions from that year. 

The future of QuickBooks Desktop

The future of QuickBooks Desktop will focus primarily on supporting existing subscribers rather than attracting new ones as Intuit further stresses cloud-based solutions and a SaaS (software-as-a-service) pricing model.

Experts speculate that QuickBooks Desktop Enterprise is the next to go, once the functionality of QuickBooks Online is able to catch up to Desktop’s robust offerings. That said, there is currently no official indication from Intuit that this will happen anytime soon.

How Method can help

If you’re looking to retain your QuickBooks Desktop functionality and gain remote access, consider integrating with Method.

Method ensures you receive the latest critical updates and security patches while automating key workflows, such as: 

• Estimating and invoicing, 
• Communications.
• Collecting customer payments.

Even after discontinuation, Method stays integrated with QuickBooks Desktop to give you anywhere access and ongoing support.

Recap: Is QuickBooks Desktop being discontinued?

With QuickBooks Desktop discontinued, you need to have a continuity plan in place for your current processes. Whether it’s subscribing before the cut-off date, switching to Enterprise or Online, or migrating to a different accounting software, it’s important to have a strategy ready before it’s too late.

Remember that:

• Intuit will stop selling new subscriptions for QuickBooks Desktop Pro Plus, Premier Plus, Mac Plus, and Desktop Enhanced Payroll after September 30, 2024.
• Existing subscribers of these QuickBooks versions can continue to renew their subscriptions beyond the cut-off date. This means you also still have time to purchase subscriptions for them if you are not yet signed up.
• For the time being, Intuit will also continue to provide security updates, product updates, and support for these existing Desktop subscriptions.
• QuickBooks Desktop Enterprise will not be affected by this discontinuation and will remain available for purchase and support. 

QuickBooks Desktop discontinued FAQs

How do I know what QuickBooks Desktop version I’m currently using?

To check your QuickBooks Desktop version, press the F2 key or Ctrl+1 on your keyboard to open the “Product Information” window. Here, you’ll see your product name, product number, license number, version, and release information.

What if I am not currently on a supported version of QuickBooks Desktop?

If you’re not currently on a supported version of QuickBooks Desktop, you won’t have access to live technical support, security updates, payroll processing, and other integrated features like online banking and payments. 

If you want these features, you’ll need to upgrade to a supported version as soon as possible, or consider transitioning to QuickBooks Online or QuickBooks Desktop Enterprise. If these features are unimportant to you, you can stay on your unsupported version.

Can I renew a suspended QuickBooks Desktop Plus subscription?

Yes, you can renew a suspended QuickBooks Desktop Plus subscription, provided you do so before the discontinuation cut-off date. If your subscription has been suspended due to non-payment or other issues, you will need to reactivate it to regain full access to your data and features.

Here are the steps to renew a suspended subscription:

1. Open QuickBooks Desktop and log in with your admin credentials.
2. Go to the Settings menu, then select “Subscriptions and billing.”
3. Find your QuickBooks plan and select “Resubscribe.” 
4. Enter the updated billing information and confirm your payment details.

You will have a grace period of 30 days to renew your subscription after receiving the final notice of suspension. If your subscription remains unpaid after this period, you will only have view-only access to your data for a limited time

How long do I have to resolve any billing or payment issues?

You have until the discontinuation date, September 30, 2024, to resolve any billing or payment issues related to QuickBooks Desktop.

With QuickBooks Desktop discontinued, see how Method helps your business stay afloat.

The post QuickBooks Desktop discontinued: Next steps for Desktop users appeared first on Method.