QuickBooks for Small Manufacturers: What It Does, Where It Falls Short, and What to Use Instead

If you’re running a small manufacturing business — making candles, soaps, skincare products, food items, jewelry, or anything else from raw materials — you’ve probably been told you need QuickBooks.

Your accountant swears by it. Your business-savvy friend uses it. Half the small business blogs you’ve read recommend it. And you’ve probably looked at the feature list and thought, “This seems… complicated for what I need.”

Here’s the thing: QuickBooks is genuinely excellent software. It’s the gold standard for small business accounting, and there’s a reason millions of businesses rely on it. But — and this is the important part — it wasn’t built for makers who manufacture products.

Let’s have an honest conversation about what QuickBooks actually does well, where it falls short for small manufacturers, and how to build a system that gives you the financial compliance you need without forcing you into workflows that don’t fit how you actually run your business.

What QuickBooks Actually Does Well

Before we talk about limitations, let’s give credit where it’s due. QuickBooks is excellent at what it was designed to do.

Bookkeeping and Financial Tracking

QuickBooks excels at tracking money flowing in and out of your business. Income from sales, expenses from suppliers, payments to contractors, subscription fees, shipping costs — if money moves, QuickBooks can track it.

You get proper double-entry accounting (even if you don’t think about it that way), clean categorization for tax purposes, and a clear audit trail that accountants actually understand.

Tax Preparation

This is where QuickBooks really shines. When tax season rolls around, everything your accountant needs is already organized — income statements, expense reports, categorized deductions, mileage logs if you’re tracking them.

If you’re using QuickBooks Online, you can even give your accountant direct access so they can pull reports without asking you to export files and email spreadsheets back and forth.

Invoicing and Accounts Receivable

If you sell wholesale, do custom orders, or bill on terms (rather than collecting payment immediately), QuickBooks handles invoicing smoothly. You can create professional invoices, track who owes you money, send payment reminders, and reconcile payments when they arrive.

It integrates with payment processors like Stripe and Square, so customer payments flow directly into your books without manual data entry.

Bank Reconciliation

QuickBooks connects to your bank and credit card accounts, automatically imports transactions, and helps you match them against recorded income and expenses. This makes monthly reconciliation much faster than doing it manually with spreadsheets and bank statements.

Financial Reporting

Need a Profit & Loss statement? Balance sheet? Cash flow report? QuickBooks generates them instantly. You can filter by date range, compare year-over-year performance, and drill down into specific accounts to see what’s happening under the hood.

For most service businesses — freelancers, consultants, agencies, contractors — this feature set is exactly what they need. QuickBooks handles the financial side, they focus on delivering services, and everyone’s happy.

When QuickBooks Is the Right Choice

QuickBooks makes perfect sense if you’re running:

A service-based business: Consultants, designers, agencies, contractors. You’re billing for time and expertise, not selling physical products. No inventory to manage, no materials to track — just income, expenses, and invoices.

A simple retail or resale business: You buy finished products, mark them up, and sell them. QuickBooks can track purchase costs and sales revenue, and its inventory features (while limited) may be enough if you’re dealing with straightforward buy-and-sell transactions. (If you’re exploring alternatives to platforms like Etsy, QuickBooks might work fine for simpler retail setups.)

A business with complex financials but simple operations: Multiple revenue streams, contractors, business loans, investment accounts — QuickBooks can handle complexity on the financial side. As long as your operational side (how you actually make and deliver what you sell) stays simple, QuickBooks will serve you well.

A business that needs robust payroll: QuickBooks Payroll is genuinely good. If you have employees and need to manage taxes, benefits, and compliance, QuickBooks integrates payroll seamlessly with your accounting.

If any of those describe your business, QuickBooks is probably the right tool. But if you’re a maker who transforms raw materials into finished products? That’s where things get complicated.

Where QuickBooks Falls Short for Small Manufacturers

Here’s the core problem: QuickBooks treats inventory as “items you buy and sell.” It has no concept of “items you make.”

That fundamental limitation cascades into a series of practical problems that make managing a manufacturing business in QuickBooks frustrating — and often inaccurate.

No Bill of Materials (BOM) Tracking

If you’re a maker, you work from recipes — precise formulas that define exactly what goes into each product. Maybe it’s 8 oz of soy wax + 1 oz of fragrance oil + 1 wick to make one candle. (If you’re in the candle business, we have a deep dive on how to run a profitable candle business — spoiler: accurate costing matters.) Or 4 oz of shea butter + 2 oz of coconut oil + 1 oz of essential oils for a jar of body butter.

QuickBooks has no way to store or manage those recipes.

You can’t tell QuickBooks that “1 finished candle requires 8 oz of soy wax” and have it automatically deduct raw materials from inventory when you make a batch.

You can’t track recipe versions, see which materials went into a specific production run, or calculate what it will cost to make your next batch based on current material prices.

Most makers who try to use QuickBooks for manufacturing end up maintaining a separate spreadsheet just to track recipes and material usage. Then they have to manually calculate how much raw material to deduct when finished products sell.

That’s double data entry — and every time you do it manually, there’s a chance for error.

(If you’re curious what proper BOM tracking looks like, we wrote a comprehensive guide: Bill of Materials: The Ultimate Guide for Small Manufacturers.)

No Raw Material to Finished Goods Transformation

QuickBooks doesn’t understand the idea of transforming materials into products.

In QuickBooks, when you “make” a product, you’re really just adjusting inventory counts. There’s no automatic linkage between the raw materials that went in and the finished goods that came out. No tracking of production batches, no assignment of labor or overhead costs to specific manufacturing runs, no visibility into work-in-progress.

For a candle maker, this means QuickBooks sees “8 oz soy wax” and “1 finished lavender candle” as completely separate, unrelated items. It doesn’t know that making the candle should decrease your wax inventory. You have to manage that manually.

COGS Limitations

Cost of Goods Sold (COGS) is one of the most important numbers in your business. It tells you what it actually cost to make the products you sold — which is how you calculate gross profit and understand whether your pricing is sustainable.

QuickBooks calculates COGS based on inventory items you’ve marked as “sold.” For a retail business buying finished goods and reselling them, that works fine. But for manufacturers, COGS is more complex.

The true cost of a handmade candle isn’t just the materials. It’s materials + labor + overhead (rent, utilities, packaging, shipping supplies, etc.) + any waste or spoilage. QuickBooks Online doesn’t have a built-in way to allocate those costs accurately to each product.

QuickBooks Desktop has a “Manufacturing & Wholesale” edition that includes assemblies and basic production tracking, but it’s expensive ($900+/year for a single user), desktop-only (not cloud-based), and the learning curve is steep. For most small makers, it’s overkill. (See our comparison: QuickBooks Self-Employed vs. Craftybase for how the options stack up.)

And even with assemblies, QuickBooks doesn’t track lot numbers, expiration dates, or material traceability — features that become critical as your business grows or if you’re in a regulated industry like food or cosmetics.

Inventory Is “Items You Buy and Sell” — Not “Items You Make”

QuickBooks inventory management is designed around purchasing finished goods from suppliers and selling them to customers. It’s not designed around purchasing raw materials, manufacturing products in batches, and tracking finished goods across multiple sales channels.

You can technically work around this by manually adjusting inventory counts after each production run. But that means you’re doing a lot of manual calculations outside QuickBooks, then entering summary numbers into the system. And if your calculations are wrong — or if you forget to log a batch — your inventory counts and COGS are suddenly inaccurate.

For makers managing dozens or hundreds of SKUs across multiple variants (scents, sizes, colors), this quickly becomes unmanageable.

Platform-Specific Integration Issues

If you’re selling on Shopify, Etsy, Amazon, or through multiple channels (and if you’re considering Shopify, here’s our guide on how to successfully sell handmade items on Shopify), you’ve probably looked at QuickBooks integrations to sync your sales data automatically.

The integrations exist — but they’re notoriously problematic for makers.

Shopify + QuickBooks: The official QuickBooks Connector recently went through a forced migration that broke inventory syncing, caused product matching failures, and left many sellers manually fixing duplicate entries and missing transactions. Even when it works, it doesn’t handle manufacturing workflows. (We covered the details in Shopify QuickBooks Integration: Why It’s Broken — and here’s a better way to connect Shopify and QuickBooks if you manufacture products.)

Amazon + QuickBooks: Amazon now offers an embedded QuickBooks app in Seller Central, but using it means giving Amazon visibility into your financial data — which many sellers are understandably uncomfortable with. And like the Shopify integration, it doesn’t address manufacturing-specific needs. (See our analysis: Amazon’s New QuickBooks Integration: What Sellers Should Know (And an Alternative Approach).)

Etsy + QuickBooks: There’s no native integration. You can use third-party apps like Synder or A2X, but those tools are designed for syncing sales transactions — not tracking raw materials, managing production, or calculating accurate COGS for handmade products. (Many Etsy sellers still use spreadsheets for inventory tracking — which works until it doesn’t.)

The fundamental issue is the same across all these integrations: they can sync sales and revenue, but they can’t bridge the gap between your operational workflow (making products from materials) and your financial accounting (tracking money in and out).

Here’s how direct platform integrations compare to a two-system approach:

Reconciliation Becomes a Monthly Headache

If you sell online, you’re not paid per order. Platforms like Shopify, Etsy, and Amazon pay you in net payouts — lump sums that combine multiple orders, subtract fees and refunds, and deposit the remainder into your bank account days or weeks later.

QuickBooks expects to see individual transactions that match your bank deposits. Reconciling those net payouts to QuickBooks entries is tedious, manual work — and if your QuickBooks integration has been duplicating or missing transactions, it becomes a nightmare.

Most makers end up spending hours at month-end trying to match QuickBooks entries to bank statements, reconcile inventory counts, and generate reports that (they hope) accurately reflect what actually happened in their business.

By the time you’ve closed the books, you’re often 15+ days past month-end — too late to make operational decisions based on the numbers.

And when you do need help from Intuit? Getting a human on the phone isn’t straightforward — they’ve been pushing users toward chat and self-service for years.

What Small Manufacturers Actually Need

If you’re manufacturing products, your core challenge isn’t just tracking income and expenses. It’s managing what happens before the sale — how raw materials become finished goods, what each batch costs, and whether you have enough inventory to fulfill orders profitably.

You need a system that handles:

Real-time inventory management that tracks both raw materials and finished goods, automatically deducting the right amounts when you make a batch or sell a product.

Bill of Materials (BOM) tracking so every recipe is stored in one place, version-controlled, and you know exactly what goes into every product you make. (Learn more: Why Handmade Craft Sellers Need Bill of Materials and How to Create a Bill of Materials in 7 Easy Steps.)

Accurate COGS calculations based on actual material usage, labor, and overhead — not guesswork or rough averages. Your pricing decisions depend on knowing your true costs.

Multi-channel inventory sync so your stock levels stay accurate across Shopify, Etsy, Amazon, wholesale accounts, and craft shows — no more overselling or disappointing customers. (Related: How to Sync Etsy and Shopify Inventory.)

Production tracking that records when you manufactured batches, which materials were used, and how much labor went into each run. This is essential for understanding capacity, planning production schedules, and improving efficiency.

Clean accounting exports that send properly formatted financial summaries to QuickBooks when you need them — without giving QuickBooks control over your operational workflows. (If you’re curious how this compares to spreadsheet-based sync methods, see QuickBooks Spreadsheet Sync vs. Craftybase.)

That’s a very different set of needs than what QuickBooks was designed to handle.

Tired of forcing QuickBooks to do what it wasn’t designed for? There’s a smarter way. See how Craftybase handles manufacturing workflows that QuickBooks can’t — then exports clean numbers to QB when you need them.

The Two-System Approach: Inventory Software + Accounting Software

The solution isn’t trying to force QuickBooks to do something it wasn’t designed for. It’s using the right tool for each job.

Think of it this way: QuickBooks is excellent at financial accounting and tax compliance. But it’s not an operational tool. It doesn’t help you run your day-to-day manufacturing business.

So instead of trying to make QuickBooks do everything, you separate operational management (inventory, production, COGS) from financial accounting (bookkeeping, taxes, reporting).

Here’s how that works in practice:

Step 1: Use Manufacturing Software for Operations

You track everything related to making and selling products in a dedicated inventory and manufacturing system built specifically for makers.

This system handles:

• Purchasing raw materials and tracking their costs
• Storing recipes (BOMs) with precise quantities of each ingredient
• Recording production runs and automatically deducting materials
• Calculating true COGS per unit (materials + labor + overhead)
• Syncing finished goods inventory to your sales channels (Shopify, Etsy, etc.)
• Tracking sales across all channels and updating stock levels in real time

Step 2: Export Clean Summaries to QuickBooks

At month-end (or whenever your accountant needs it), you export a journal entry from your manufacturing system that summarizes all the financial activity in a format QuickBooks expects.

That journal entry might include:

• Total COGS for products sold during the month
• Inventory valuation adjustments (the current value of your raw materials and finished goods)
• Any relevant expense categorizations

Your accountant imports the journal entry into QuickBooks. Now your books are accurate, your taxes are compliant, and you didn’t have to fight with QuickBooks to manage production workflows it can’t handle.

Why This Approach Works

Operational detail where you need it: Your manufacturing system tracks every gram of wax, every production batch, every sale across every channel. You get real-time visibility into what you can make, what you need to order, and whether you’re pricing profitably.

Financial summaries where your accountant needs them: QuickBooks gets clean, aggregated numbers that fit its accounting structure. Your accountant is happy. The IRS is happy. You’re compliant.

No more double data entry: You record things once, in the system designed for that task. No maintaining parallel spreadsheets or manually copying numbers between platforms.

Real-time decision-making: You don’t have to wait until month-end to know your margins, inventory position, or production capacity. You can see it any time you need to make a decision.

This is how successful product businesses scale. They use operational tools for operations and financial tools for finances — and they integrate the two cleanly without trying to make one tool do both jobs.

How Craftybase Bridges the Gap

Craftybase is inventory and manufacturing software built specifically for small brands and in-house manufacturers. It handles the messy middle — tracking materials, managing recipes, calculating true COGS, and syncing stock to your sales channels.

Then it exports clean financial summaries to QuickBooks when you need them.

Track Raw Materials as You Buy Them

Every purchase of soy wax, fragrance oils, packaging, labels, or other supplies gets logged in Craftybase with its exact cost, quantity, and supplier. You can see at a glance how much of each material you have on hand and what it’s currently worth.

(If you’re just getting started with inventory tracking, here’s a practical guide: Getting Started with Your Inventory.)

Store Recipes with Precision

Your Bill of Materials defines exactly how much of each material goes into every product. When you make a batch, Craftybase automatically deducts the right amounts from your raw material inventory and adds the finished products to your stock.

No manual calculations. No guessing. Just accurate tracking of what you actually made.

Calculate Real COGS

Because Craftybase knows what materials went into each batch and what you paid for them, it calculates the true cost per unit — including labor and overhead if you choose.

This isn’t an estimate or an average. It’s based on the actual materials you used and the actual prices you paid. That’s the foundation for smart pricing decisions and profitability analysis.

Sync Stock to Shopify, Etsy, and More

When you finish a production run, Craftybase can automatically update your available inventory on connected sales channels. No more overselling. No more manual stock adjustments across multiple platforms.

Orders flow back into Craftybase automatically, decrementing your inventory and keeping everything in sync. (Learn more: Multi-Channel Inventory Sync.)

Export Clean Summaries to QuickBooks

At month-end, you export a single journal entry from Craftybase that captures all your COGS, inventory valuations, and adjustments in the format QuickBooks expects.

No syncing chaos. No duplicate transactions. No fighting with buggy integrations. Just clean numbers ready for your accountant.

We recently launched automatic COGS and inventory valuation sync that makes this even easier — your financial data flows to QuickBooks Online automatically, without manual exports.

(See the full integration details: Craftybase QuickBooks Integration.)

What Makers Say About the Two-System Approach

“I was spending 6-8 hours every month reconciling QuickBooks and trying to figure out my actual COGS. Now Craftybase calculates everything automatically, and I just export a single journal entry to QB at month-end. I got my weekends back.” — Sarah K., candle maker, 150+ SKUs across Shopify and Etsy

“My accountant loves that my QuickBooks is finally accurate. And I love that I can see my real margins in real-time, not two weeks after month-end.” — Marcus T., skincare manufacturer, wholesale + DTC

Other Alternatives Worth Considering

If Craftybase isn’t the right fit, here are a few other paths makers have found helpful:

QuickBooks Desktop Manufacturing & Wholesale Edition

If you’re committed to keeping everything in QuickBooks and you’re comfortable with desktop software (not cloud-based), QuickBooks Desktop does offer a manufacturing-focused edition with assemblies and basic production tracking.

The tradeoffs: It’s expensive ($900+/year for a single user), it has a steep learning curve, and it still doesn’t handle multi-channel inventory sync or many of the operational features makers need. But if you’re already deep in the QuickBooks ecosystem and your manufacturing workflows are relatively simple, it might work.

Katana MRP

For makers who need advanced production planning, multi-location inventory, and shop floor management, Katana is a powerful option. It’s built for light manufacturing and integrates with QuickBooks.

The tradeoffs: It’s expensive — starting around $199/month — and may be overkill if you’re a solo maker or small team. (See comparison: Best Manufacturing Software for Small Business.)

Stick with Spreadsheets (For Now)

If your business is still small and your product line is simple, you might be better off continuing to track inventory in a spreadsheet and manually entering summary transactions into QuickBooks once a month. (We actually have a guide on spreadsheet-based inventory tracking for Etsy sellers if that’s where you’re starting.)

It’s tedious, but it’s also predictable — and you’re not paying for software you’re still learning to use. Just be aware that as your business grows (more products, more variants, more sales channels), manual tracking becomes a liability rather than a solution.

The Bottom Line

QuickBooks is excellent accounting software. It does bookkeeping, tax prep, financial reporting, and bank reconciliation better than almost anything else on the market. If you’re running a service business or a simple retail operation, it’s probably the right choice.

But if you’re a maker who transforms raw materials into finished products, QuickBooks falls short in critical ways:

• No Bill of Materials tracking
• No raw material to finished goods transformation
• COGS calculations that don’t account for true manufacturing costs
• Inventory management that assumes you buy and sell finished goods, not make them
• Integrations with Shopify, Etsy, and Amazon that sync sales but ignore production workflows

Trying to force QuickBooks to handle manufacturing creates frustration, inaccuracy, and hours of manual workarounds every month.

The better approach? Use inventory software built for makers to manage your materials, production, and COGS — then export clean summaries to QuickBooks for tax and compliance purposes.

That’s how you get the best of both worlds: detailed operational control where you need it, and clean financial records for your accountant and the IRS.

Your business deserves tools that actually fit the way you work — not tools that force you to work around their limitations.

Related Articles

QuickBooks Integrations:

• Shopify + QuickBooks Integration for Makers (BOFU landing page)
• Shopify QuickBooks Integration: Why It’s Broken (And What Makers Should Do Instead)
• Amazon’s New QuickBooks Integration: What Sellers Should Know
• QuickBooks COGS and Inventory Valuation Sync
• QuickBooks Spreadsheet Sync vs. Craftybase

Manufacturing & Inventory Management:

• Bill of Materials: The Ultimate Guide for Small Manufacturers
• How to Create a Bill of Materials in 7 Easy Steps
• Best Manufacturing Software for Small Business
• Getting Started with Your Inventory

Multi-Channel Selling:

• How to Sync Etsy and Shopify Inventory
• How to Successfully Sell Handmade Items on Shopify
• Alternatives to Selling on Etsy

Frequently Asked Questions

Q: Can QuickBooks track raw materials and finished goods separately? A: QuickBooks Online treats all inventory as items you buy and sell — it doesn’t distinguish between raw materials and finished products. QuickBooks Desktop Manufacturing & Wholesale edition has basic assemblies, but it’s expensive and not cloud-based. For most small makers, a dedicated manufacturing system works better.

Q: Does QuickBooks calculate COGS accurately for handmade products? A: QuickBooks calculates COGS based on the purchase cost of inventory items marked as sold. For handmade products, true COGS includes materials, labor, overhead, and waste — which QuickBooks doesn’t track automatically. You’d have to calculate those costs manually and adjust entries, which defeats the purpose of using software.

Q: Can I use QuickBooks and manufacturing software together? A: Absolutely — that’s the recommended approach. Use manufacturing software like Craftybase to handle inventory, production, and COGS, then export financial summaries to QuickBooks at month-end. Your accountant gets accurate numbers in QuickBooks, and you get operational control in a system built for makers.

Q: What about QuickBooks + spreadsheets for tracking materials? A: Many makers start this way. You track recipes and material usage in a spreadsheet, then manually enter summary numbers into QuickBooks. It can work for very small businesses, but it’s error-prone, time-consuming, and doesn’t scale. As your product line grows, you’ll spend more time managing spreadsheets than making products.

Q: Do I still need an accountant if I use QuickBooks and manufacturing software? A: Yes — especially at tax time. An accountant helps you optimize deductions, stay compliant, and make sense of your financial reports. The right software setup just makes their job easier (and your bills lower) because your books are accurate and organized.

Q: Can Craftybase replace QuickBooks entirely? A: No — Craftybase is designed to work alongside QuickBooks, not replace it. Craftybase handles inventory, manufacturing, and COGS. QuickBooks handles bookkeeping, taxes, payroll, and financial reporting. Together, they give you complete visibility into your business without forcing either tool to do something it wasn’t designed for.

Q: How much does QuickBooks cost for manufacturers? A: QuickBooks Online plans range from $30-200/month depending on features. QuickBooks Desktop Manufacturing & Wholesale Edition costs $900+/year for a single user. However, cost isn’t the main consideration — it’s whether QuickBooks can actually handle what you need. For most makers, the real cost is the time spent on manual workarounds because QuickBooks doesn’t support manufacturing workflows natively.

Q: Can QuickBooks track batches and lot numbers? A: QuickBooks Online has no native batch or lot tracking. QuickBooks Desktop Enterprise has limited lot tracking, but it’s expensive and desktop-only. If you need traceability for food, cosmetics, or other regulated products, you’ll need dedicated manufacturing software that tracks batches from raw materials through finished goods.

Q: What’s the difference between QuickBooks Online and Desktop for manufacturing? A: QuickBooks Online is cloud-based but has no manufacturing features — it treats inventory as items you buy and sell. QuickBooks Desktop Manufacturing & Wholesale has basic assemblies and production tracking, but it’s expensive ($900+/year), desktop-only, requires local installation, and still lacks features like multi-channel inventory sync that modern makers need.

Q: What are the best QuickBooks alternatives for small batch manufacturers? A: Rather than replacing QuickBooks entirely, most successful makers use a two-system approach: manufacturing software (like Craftybase, Katana, or similar tools) for inventory, production, and COGS, combined with QuickBooks for accounting and taxes. This gives you operational control without sacrificing the accounting features QuickBooks does well.