Dynamics 365 vs QuickBooks

Both QuickBooks and Dynamics 365 Business are accounting software solutions that are aimed at small businesses. QuickBooks and Dynamics 365 each provide the core functionality that you need to handle basic finances, but the similarities beyond that are actually somewhat limited.

In this article I’m going to break down some of the differences between the two products and discuss when you might choose QuickBooks vs Dynamics 365.

QuickBooks

QuickBooks is owned by Intuit, and it has been available for a long time – “Quicken” was a product of Intuit’s way back in 1983. QuickBooks has some good payroll and credit card processing add-ons, which are a big part of the QuickBooks solution.

QuickBooks is available in a number of different versions: QuickBooks Online Plus; as well as QuickBooks Enterprise Solutions Platinum, Gold, and Silver. You get increased functionality as you move up the chain, including advanced reporting, payroll, inventory, and pricing.

QuickBooks Strengths

One of QuickBooks’ strengths is its longevity and market presence. Their Wikipedia page states that they had a 92% market share back in 2008. You’d be hard-pressed to find an experienced accountant that has never relied on QuickBooks. The support, public knowledge, and community is quite strong surrounding the QuickBooks product. This could help you in reducing training costs.

QuickBooks has a full range of options for deployment. You can run the solution in a “single-tenant” configuration, which means you can move the app from hosting in a private cloud to a public cloud, if necessary. It is also quite easy to buy and set up QuickBooks without any help.

Compared to Dynamics 365, QuickBooks definitely has two more key advantages: payroll and payment processing. As I mentioned, core areas of Intuit’s business include the payroll and merchant services add-ons. Since these features are great sources of revenue for Intuit, they are well integrated into the Quickbooks platforms – not so the case with Dynamics 365.

QuickBooks Weaknesses

Despite its strengths, QuickBooks is still generally considered a piece of accounting software for “micro-businesses”. This means that it lacks the full range of options required by many SMBs and growing companies. Some of its worst faults include:

  • Weak user roles and security options – it’s too easy for mistakes to be made and for users to have improper access to data.
  • Not-so-robust audit trails – no record of logins/logoffs, and no record of changes to master records.
  • Limited/inconvenient reporting options – general difficulty across customer insights and analytical capabilities.

Furthermore, QuickBooks is not very scalable. If you are a business that is growing, has plans to grow, or has already grown – you will find that the architecture of the QuickBooks database is insufficient. When you approach 1000 transactions/month or multiple users accessing the system at the same time, QuickBooks gets slower and slower. In addition, QuickBooks doesn’t have multi-lingual functionality.

Finally, QuickBooks is missing a number of key features that a lot of accountants consider necessary. They have limited options for billing formats, and you will have difficulty billing third parties or different client locations. Also, QuickBooks is pretty terrible at handling inter-company reporting. You also can’t work with deferred revenue or expenses in QuickBooks.

Dynamics 365 for Finance & Operations, Business Edition

When comparing Dynamics 365 and QuickBooks, it’s important to make sure we’re looking at the right Dynamics 365 module. I’ll focus on the small-business financial software available from Microsoft: Dynamics 365 for Finance & Operations, Business Edition. You can learn more about the various Dynamics 365 modules here.

Dynamics 365 Strengths

Dynamics 365 has a number of strengths, but there is one advantage that really stands out when compared to QuickBooks: value. Microsoft claims that Dynamics 365 Business Edition has 600 features that QuickBooks Online Plus does not have. In fact, Dynamics 365 has the functionality to address all of the QuickBooks weaknesses that I outlined above; and it really goes above and beyond when it comes to scalability and reporting.

When comparing Dynamics 365 pricing to QuickBooks pricing, you’ll find that Dynamics 365 rings in at $40/user/month; whereas QBES can cost up to $184/user/month for the Platinum edition. (The “QuickBooks Online Plus” version is $40, but it has way less functionality).

Microsoft Dynamics 365 also has a big advantage in that is integrated with the rest of the Microsoft stack. If you use Microsoft Office, Outlook, CRM, Excel, or any number of other Microsoft products, you’ll be impressed by how easy it is to use – and how easily the data flows between applications. For instance, Power BI offers a full reporting solution that is included in Office 365 and can be simply plugged into Dynamics 365.

Dynamics 365 Weaknesses

It bears mentioning once again that Dynamics 365 doesn’t match QuickBooks when it comes to receiving credit cards or processing payroll. It’s definitely possible, with a PayPal integration, for instance – but QuickBooks handles these activities better. If payroll or merchant services are crucial features for your business, score a point for QuickBooks.

Also, Dynamics 365 is a cloud-only, SaaS product. This means that you cannot host your data in the isolation of your server closet. Not too many small businesses have the resources to manage their own private cloud, but some really need the option of working on-premises only. If this is you, Dynamics 365 is the wrong choice.

Finally, Dynamics 365 is a brand new product. It is definitely going through some growing pains – there have been a few “why is that missing” moments lately; things like an inability to change the timezone! We’ll see how quickly those get cleaned up over the coming months.

QuickBooks & Dynamics 365 Comparison Table

Feature Dynamics 365 QuickBooks
Date Established 2016 1983
Overall Functionality Very Good Good
Scalability/International Accounting Good Poor
Deployment SaaS Only More Flexible
Payroll No Yes
Reporting Very Good Okay
Security Roles & Auditing Good Okay
Credit Card Processing PayPal Included
Pricing/user/month  $40 $40 – $184

 

Which One is Right For You?

Overall, I would score a win for Dynamics 365 in most cases. It’s very hard to beat $40/month for all of that functionality. There are a few scenarios in which you might choose QuickBooks, though:

  • You or your accountant is deeply knowledgeable in QuickBooks and you don’t want to learn a new tool.
  • You don’t want to host your data in the cloud.
  • You need payroll or credit card processing included straight out-of-the-box (only available in higher tiers)
  • You are quite nervous about a new product, and would prefer an older product (QuickBooks launched in 1983)

You should probably NOT choose QuickBooks if:

  • You have plans to expand to more than one country, or you currently operate in multiple countries
  • You have more than a couple accounting staff members (or might get there in the future)
  • You do more than 1000 transactions/month (or might get there in the future)
  • You need to handle deferred revenue and/or expenses.
  • You are an organization that needs to consolidate across multiple companies
  • You place a premium on the reporting ability of a system

I work for Encore Business Solutions, a Microsoft VAR. If you want to speak more about Dynamics 365, feel free to contact me.

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