In a recent blog post, we looked at the signs that suggest you’re ready to migrate from QuickBooks to NetSuite. But QuickBooks is not the only accounting software available, and most users of Xero will also discover that the suitability of their software suffers as their business grows.
This post is designed to help Xero users who are wondering if it’s time for them to implement NetSuite to streamline their financial management. We’ll cover the advantages and disadvantages of swapping to NetSuite or sticking with Xero, but we recommend reading our QuickBooks post as well.
But for now, we’ll start by looking at exactly what Xero is.
Xero is a cloud-based accounting software. Designed with small to medium-sized businesses in mind, it lets you complete invoicing, inventory tracking, bank reconciliation, payroll and financial reporting all in one place.
Being cloud-based you can also access it anywhere so it supports collaboration across finance teams, and in fact, your entire business.
For smaller businesses, Xero is a much better option than traditional spreadsheets as it reduces data duplication and streamlines some processes. But, as businesses grow and operations become more complex, Xero’s limitations become unavoidable.
Here are some of the disadvantages you’ll notice when trying to use Xero with larger businesses:
Smaller businesses often have the luxury of using more ‘standardised’ processes. If the ones offered by your software don’t quite meet your business operations, then a compromise can be straightforward to find and implement.
For a business looking to expand, this problem is more pressing. Being able to customise workflows, reports and dashboards is vital in tracking progress and making timely, informed business decisions.
Getting these decisions right is a vital part of growing a business, but with Xero, you need to rely on external tools and add-ons to support them. This slows down the decision-making process and can even leave you working from inaccurate data, which can be worse than having no data at all.
Xero only allows the management of a single business or entity. If you need to add a second company or subsidiary, you are back to manually compiling or reconciling reports, which is time-consuming and increases the risk of data errors.
One of the benefits of effective accounting software is having a clear and accurate overview of finances, so this essentially undermines the whole point of using Xero at all.
Issues with Xero can grow even further if your company expands into new international markets, as Xero’s ability to manage multiple currencies, languages and tax regulations is also limited.
Once again, you’ll be dependent on third-party tools or manual processes to ensure you’re compliant with the necessary regulations, with all the problems that entails.
Leaving your financial processes spread across multiple products also means that only headline numbers appear in the systems you use to inform decision-making. This can also limit your ability to grow.
Xero is built with a straightforward and simple-to-use billing system, which is obviously a major selling point for small businesses. But higher transaction volumes require more advanced billing processes, and these can quickly exceed Xero’s capabilities.
This is another instance where manual workarounds end up being introduced, affecting accuracy and slowing down reporting.
Xero’s functionality does include basic inventory management, giving small businesses access to up-to-date information about stock levels and supply chains in a single, accurate source. That said, it’s not equipped to handle complex transactions, supply chains or inventories in the same way.
Without large-scale inventory management, you can end up with disjointed processes, discrepancies with stock and even delays in fulfilling orders. These can have serious impacts on sales volume and customer satisfaction – major issues for businesses that are trying to expand.
Xero is built with small businesses in mind. It includes all the features and functions that a small business will need from accounting software, but it deliberately doesn’t go beyond the basics to keep it as easy to use as possible. This is a big selling point for start-ups and small businesses, but it quickly becomes an issue when companies start to grow.
In contrast, NetSuite is designed to scale alongside growing businesses. It can cope with large volumes of data and use that data across all its processes and functions without needing it to be duplicated. It always draws from a single data source, increasing accuracy because it doesn’t rely on repeated manual input or duplication.
NetSuite is not necessarily ‘better’ than Xero, but it has a much wider range of functionality. If you’re a small business that just needs quick-to-set-up and easy-to-use software to support your basic accounting processes, then Xero is a great choice.
But if your business is in a growth stage, then NetSuite is a much better fit. It can draw together a number of processes across different departments and on a much bigger scale.
NetSuite grows with your business, meaning if you go from hundreds of transactions to thousands or even millions, you don’t need to set up a newsystem, draw in a lot of third-party integrations or resort to workarounds. NetSuite will continue to manage them all.
Xero’s limited functionality means that, while some processes are streamlined, others still need workarounds or manual processing. Especially those around invoice processing and reconciling transactions.
NetSuite is far more extensive. It lets you streamline processes, not just across accounting but also warehouse and inventory management, to help your whole business run more smoothly. Automating these tasks frees up your team to work on things that really do need human input, improving overall efficiency and saving money as a result.
Accurate and timely reporting are important for businesses of any size, but the bigger your business grows, the harder reports are to collate. Information needs to be drawn from more sources, in greater volume and in greater depth.
NetSuite’s advanced analytics and extensive reporting capabilities won’t just collect the information you need. Its comprehensive dashboards make it much easier to access the exact information you need, and dig into it whenever necessary – and it is always up-to-date as well.
As we’ve already noted, NetSuite goes beyond accounting. It’s not just an extensive ERP solution; it also supports customer relationship management and professional services automation, bringing a wide range of business operations and processes together.
Having a single source of truth that spans your entire business operation removes the inefficiencies of fragmented tools and data silos. Your team no longer needs to waste energy juggling multiple pieces of software, apps and add-ons that don’t communicate well, because NetSuite can collect and handle all the data you need. It gives your whole team real-time visibility across current and historical data so they can make data-driven decisions that benefit your business.
If necessary, it is possible to integrate Xero with NetSuite using third-party apps, but, as NetSuite partners, we do not advise it.
The major benefit of NetSuite is that it streamlines a whole range of business processes. Additional integrations complicate your NetSuite solution and add a whole new layer of data to collate that is avoidable.
Instead, we suggest migrating from Xero to NetSuite, phasing out the former software completely so you’re just using NetSuite. An effectively implemented NetSuite solution will give you all the functionality you can find within Xero, plus a whole range of further features – it should render Xero ultimately unnecessary.
If you want to streamline your financial management without affecting your business performance, a tailored NetSuite integration is the way forward. Here at NoBlue2, we’ll draw on our extensive experience and knowledge to set your solution with every function that can benefit your business, as well as support user adoption to make sure your whole team is able to make use of them. Talk to us today to find out more.
