When it comes to QuickBooks, the revenue recognition principal was not a core concern during development. QuickBooks was designed as a book keeping system. Its appeal to startup companies is that it is affordable and provides the basic needs. However, for software startups that want to grow and expand, QuickBooks is not the solution.
Software companies that are focused on growth need an accounting system that supports their business. They need a solution that at least provides general ledger, accounts receivable, and accounts payable functionality. In addition, they may want to consider revenue recognition automation, GAAP compliant financial statements, centralized database, and Sarbanes Oxley compliance.
Is QuickBooks GAAP compliant? Not on its own. To be GAAP compliant, QuickBooks needs the help of additional spreadsheets or other systems. In the long run, this means additional expense in terms of other systems and additional manpower to properly track sales. Although QuickBooks may appear to be the cheaper solution in the beginning, it will cost more in the end and the great part is that still is the most loved accounting application which is used widely by accounting community.
Regards,
Adrian
Sr. QuickBooks Cloud Consultant
