When it comes to the contemporary world of manufacturing, “Best of Breed” is seen as a common practice of business growth. You utilize QuickBooks Online, because it is the best software when it comes to the sphere of accounting. While at the same time having an advanced application for manufacturing which can consider all aspects of production that cannot be managed through QuickBooks.
The problem here is that by using two different applications, you expose yourself to one of the major risks of data silos. If your manufacturing software cannot understand what your accounting software knows, your business will fall apart.
Understanding What Is Master Data
To synchronize all systems, we need to first understand the Master Data. In this sense, master data means the fundamental nouns within your business, data that remains relatively constant and defines what you deal with in your work. Master data consists of Item Lists (inventory parts, raw materials, finished goods), Accounts (cost of goods sold, assets, expenses), Suppliers, and Customers.
This data constitutes your Bill of Materials (BOM) and your Production Orders. Without a strong foundation, any structure built on top of it is going to fail.
The “Source of Truth” Problem
When you have multiple systems running separately from each other, there will always be what is known as the “Source of Truth” problem. The source of truth can be illustrated by the situation where a sales representative adds a new product in QuickBooks to issue an invoice but since the shop floor is using an old system that is out of date, the production process cannot begin. In the same way, a production engineer may add a new raw material code in his manufacturing system but since he did not inform the accountant about it, the purchasing department cannot pay the supplier because the raw material does not appear on the ledger.
Manual data entry is the culprit behind this. Typing errors may turn “Steel-Plate” into “Steel Plate.”
How Synchronization Helps Make Up for These Discrepancies
With Master Data Synchronization, this key data is automatically synchronized from QuickBooks to your manufacturing software. Generally, QuickBooks will be the “Master” as it is your financial ledger.
Once synchronization is enabled (automatic or manual), the manufacturing program gets in touch with QuickBooks to retrieve all the latest lists of items, vendors, and accounts. With the help of these synchronization tools, when creating a Bill of Materials in your manufacturing software, you know that each item you choose comes with an associated QuickBooks item and account.
Impact on Operations
In the case of solutions such as x2x Lite Manufacturing, however, the integration is automatic. This enables you to “Download Items,” and your inventory decimal values, costs, and item descriptions will be perfectly synchronized.
However, synchronization does not stop at mere naming conventions. It involves accounting logic as well. For example, to properly record a raw material expense in your manufacturing orders. Make sure program knows which accounts are for your assets and expenses. Also, Master Data synchronization ensures that the manufacturing logic reflects the proper accounting rules.
Therefore, when the transaction is record back in QuickBooks Online, always goes in the correct account.
Conclusion
If you want to scale your manufacturing company. Your employees cannot spend time cross-checking the information in the spreadsheet to ensure there’s consistency. Master Data Synchronization solves the problem of administrative friction. Differences occurs between the process of doing the job and the process of documenting it. It allows everyone in the company on and off the shop floor to be on the same page.
