An expanding business has more complex accounting needs, and basic accounting software may no longer be sufficient. As more and more business challenges arise, the disparate applications supporting various departments, supplemented by spreadsheets, will prove an unsustainable solution. This is why many businesses choose to move on from Xero and implement NetSuite.
If you’re considering an upgrade for your business management systems, you need to consider whether Xero and NetSuite meet your needs both now and in the future. Features that offer automation of key business processes, increased productivity and reduced operational costs should be priorities.
In this article, we will compare NetSuite and Xero to help guide you as to which might be the better solution for your organisation.
NetSuite
NetSuite is a financial business software solution that supports organisations throughout their journey. As a cloud-based platform, it supports unlimited scalability with real-time data, custom fields and role-based dashboards. It is more than a mere accounting system; it is an Enterprise Resource Planning (ERP) solution with a suite of business modules that deliver everything you could need to boost your operational efficiency.
NetSuite is an end-to-end accounting solution with multiple features designed to run your entire business. Even if you have multiple locations around the world, NetSuite has you covered with its multi-currency, multi-language and multi-tax capabilities.
Xero
Xero is a good starting point for small businesses and it is popular in Australia, New Zealand and SE Asia. It is low cost and has cloud accessibility, addressing many of the primary challenges of small businesses relating to cash flow. Track income and expenses, leverage automatic banking feeds and gain visibility into your financial health. It can also help with preparing for tax submissions.
The primary focus of Xero is accounting. There are some features for basic inventory tracking and project capabilities, but this relies on complex integrations with third-party applications. For detailed business reporting, you still need spreadsheets.
NetSuite vs. Xero
Xero is best for small businesses with basic bookkeeping and accounting needs. As you grow, you will find the need for more third-party integrations and add-ons to gain access to more functionality, but this comes with more complexity and additional cost. Xero does not support multiple subsidiaries either, so consolidation of financial statements can be laborious.
NetSuite is a comprehensive financial management solution with multiple efficiency features. Preconfigured KPIs, workflows and customisable dashboards help visualise how different departments and processes impact one another, and you have support for multiple subsidiary businesses in a vast range of territories. Reporting is consolidated and in real-time, and the automation features are extensive.
NetSuite can be configured to meet the specific needs of organisations of all shapes and sizes. Compliance needs are accommodated across multiple industries with outstanding transparency. And the entire solution is highly scalable, with different modules and applications you can add and remove as required to reach your business goals.
Comparison of Capabilities
There is some crossover in the functionality offered by NetSuite and Xero, but when you scratch the surface then there are at least as many differences. The main contrast is in the robustness and totality of features, and this is important for growing companies.
Billing
NetSuite offers real-time visibility of all financial activities. This means consolidated invoicing, automated rating processes and numerous pricing models are accommodated. Subscription billing is a particular area where NetSuite is superior to Xero, as the latter is lacking in capabilities for this popular model.
Revenue Recognition
NetSuite facilitates full compliance with revenue recognition requirements with lots of automation. Regardless of the complexity of a transaction, NetSuite can process it and provide accurate forecasts and financial statements in real-time.
This is helpful for software companies and those offering services involving multiple deliverables. Xero has no direct support for revenue recognition, so a complicated workaround or integrated solution is required.
Accounts Payable Automation
NetSuite automates supplier invoice review, approval and payment. Manual interventions can be kept to a minimum by combining role- and user-based permissions along with sophisticated processes that adhere to specified controls.
Xero’s accounts payable capabilities are very limited and require a lot more manual intervention. This makes it more labour-intensive and vulnerable to human error.
General Ledger
NetSuite’s sophisticated general ledger displays accounting data from individual transactions right up to a full, consolidated level. The ledger can be customised to your needs to reduce time and energy for the reconciliation of accounts. An intuitive chart of accounts makes transaction categorisation and reporting simple, with prebuilt mapping capabilities and book-specific functional currencies. This is just a snapshot of what the NetSuite general ledger can do.
Xero, on the other hand, has only a single ledger called the ‘chart of accounts’. It is static and built using manually assigned code. This may be sufficient for smaller businesses but it doesn’t accommodate sub-accounts and may fall short for growing businesses. You can implement workarounds but will always have to export data into spreadsheets for reporting.
Accounts Receivable
NetSuite allows you to manage customer lists, track receivables, manage late payments and receive payments. Customers can have self-service access to real-time insights and there are many other provisions for loyal customers. You get a real-time view of accounts receivable data via configurable dashboards and reports.
Xero’s accounts receivable capabilities are extremely limited, with basic features like invoice reminders and statements.
Other Feature Comparisons; Netsuite vs. Xero
- Fixed asset and lease management: NetSuite allows you to manage an asset’s complete lifecycle with detailed reports and tracking. Xero only offers basic fixed asset management capability.
- Inventory management: NetSuite offers real-time visibility of inventory with a wealth of automation to track key information. Xero’s inventory tracking is very simple and requires third-party integration to get more advanced inventory management capabilities.
- Reporting: NetSuite facilitates a comprehensive range of standard financial reports, including drill-down and drill-across reporting. Xero offers only standard accounting reports like profit and loss, aged payables and receivables, balance sheets and cash flow, with some basic customisation options.
- Automation: NetSuite can provide CRM, ecommerce, project management, inventory management, warehousing management, professional services management – all on a single platform. This means different departments can be managed side-by-side from a centralised location, helping to improve operational efficiency throughout. Xero has little to no capabilities across these areas compared with NetSuite
Why NetSuite is the Stronger Option
Growth always adds complexity to a business. The software that powers your operations needs the functional breadth and depth to absorb all that complexity so that you can concentrate on running the organisation.
Xero’s limitations mean that it cannot facilitate growth – if you continue using it, you will need to keep developing workarounds and adding complicated integrations that will inevitably introduce new problems and challenges themselves. Not to mention the costs they add.
A growing business will outgrow Xero and clinging to it when it no longer meets your needs is a recipe for failure. You will know when the time has come to upgrade, and you will need a solution that is powerful, robust and scalable to grow with you.
While Xero is a great option for smaller businesses, it will not be the right option for the long-term if you expand, and this is when the rich features and functionality of NetSuite make it the superior option.
If you’d like to learn more about the powerful functionality NetSuite has to offer, please take a more in-depth look as some popular NetSuite products.
If you are still feeling uncertain, speak to an expert and they can explain in detail how NetSuite could deliver for your specific needs.
Why choose Eventura to deliver your NetSuite ERP Project?
As an official NetSuite solution provider, we have successfully delivered countless NetSuite implementations. Our expert team of business analysts, developers, consultants, technicians and support staff can guide you through your entire project, from initial scoping through to implementation and on-going support.
We believe that NetSuite offers its customers a comprehensive suite of products that can digitally transform their businesses, replacing a range of disparate systems and softwares with one unified solution to business management.
If you would like to speak to one of our NetSuite experts, you can request a free call back here.
