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How to Integrate Manufacturing and Bookkeeping

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How to Integrate Manufacturing and Bookkeeping

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Man in printing house showing client printed documents.jpegManufacturing is a complicated business. The actual manufacturing is often the simplest part. It's all the other steps that make it so challenging.

For example, you have to locate a supply of raw materials at a reasonable price. In addition, you have to plan your inventory so you avoid a costly overstock that will leave you strapped for cash, but also keep up with demand so you don't lose prospective sales. Add inventory storage and shipping, along with all the bookkeeping requirements that are part of any business, and — well, again, it's complicated.

Software Solutions
At Supporting Strategies, we noted in an earlier post that QuickBooks Desktop Enterprise Advanced Inventory is an ideal solution for a small manufacturing enterprise (SME) whose greatest challenge is integrating inventory tracking with bookkeeping.

For SMEs that use QuickBooks Online (QBO) for their bookkeeping, however, there are a couple of third-party apps that can also provide a viable pathway to integration. (We'll point out that SAP also offers inventory management software, but we're not going to get into the specifics here because SAP is for larger manufacturers and is priced accordingly. Basically, if you can afford SAP, chances are you're already using it.)

With QBO as the hub, SMEs can use third-party software such as Exact, Fishbowl or SOS Inventory to link the manufacturing side — such as inventory management, procuring raw materials and tracking work in progress (WIP) — with the customer relationship management side, along with the actual bookkeeping. That way, the manufacturer will know what their status is for raw materials on the shelf vs. raw materials for WIP vs. finished goods, and they can cross-reference that data with their purchasing and invoices.

In all likelihood, someone on the manufacturer's production floor would use the app to process orders, and that information would flow into QBO for invoicing and accounts receivable/accounts payable processing on the bookkeeping side, and then back out again.

Which Option Is Best for You?
Ultimately, it's up to you to decide which software solution is best for your SME. Exact is a cloud-based solution that offers two pricing structures: Manufacturing Standard starts at $319 per month, while Manufacturing Advanced (for manufacturers "requiring more advanced logistics") starts at $439 per month.

Fishbowl offers a choice of Fishbowl Manufacturing, which includes such features as part tracking and bill of materials, and Fishbowl Warehouse, which includes order management along with sales and purchasing. The starting price for the software is $4,395, with cost efficiency increasing as more users are added.

And then there's SOS Inventory, which is available for as little as $29.95 per month. This cloud-based, multi-user service is designed as an inventory manufacturing add-on for QBO that offers seamless integration. It works with PCs, Macs and mobile devices, and also claims to deliver "the feature set of expensive ERP / manufacturing systems at a fraction of the cost."

Again, the choice is yours. Whichever app you pick, you will, as the Exact website says, "benefit from working online together with your accountant in a way that suits you."

Lori Coleman

Author:

Lori Coleman

Lori Coleman, Director of Business Development, Supporting Strategies | 128 & South Shore, Providence, RI & Nassau County, provides bookkeeping and controller services to growing businesses.

Legal and Tax Disclaimer

This website is created by Supporting Strategies to provide general bookkeeping and accounting information only. Supporting Strategies does not provide tax, legal or accounting advice, and the information contained herein is not intended to do so. As such, the information provided should not be used as a substitute for consultation with professional tax, legal, and accounting advisors, and you should consult with a tax, legal and accounting professional before engaging in any transaction.