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Committing to a new accounting software or Enterprise Resource Planning (ERP) System is no small endeavor. Whether you are taking on a new role or looking to level up the maturity of your finance function, the implementation and utilization of a new finance or accounting software can be a defining moment for finance leaders.
You want to make a splash without causing a tidal wave and see a return on your investment that will benefit the business and set it up for long-term success. When you make that decision to move forward with a vendor, you must give prudent consideration to the implementation roadmap and sequence of events, define what the objectives are, and detail the specific use cases you require of the new system.
39% of finance leaders said they were in the process of implementing multiple digital solutions across their finance function. - EY Digital Disruption in Finance Survey
When a software vendor claims to be a Panacea and offers a magic pill to solve all of your problems with its array of ERP modules, it really is too good to be true, and supported by the finance leaders taking on multiple implementations simultaneously.
To understand the benefits and costs of NetSuite and an implementation, you must ask yourself, “Why am I making this decision in the first place?”
In this post, we will cover the benefits and considerations of an implementation but if your sole pain point is that your current accounting software doesn’t have a solution to create the reports your business requires, then a new ERP is not the answer.
Instead of committing nearly a year of your time and hundreds of thousands of dollars to a new ERP - which will not solve your reporting issues, the better option is to stay on your current general ledger (i.e. QuickBooks Online) and leverage an FP&A tool capable of automating reporting, planning and forecasting at a fraction of the cost.
If you plan on implementing an ERP like NetSuite, realize its strengths and weaknesses and where gaps can be filled by third-party options.
Of all the modules in the NetSuite ERP system, the most valuable component for finance and accounting is the general ledger. Impactful finance functions use these tools to control transactions and facilitate closing the books in a timely and accurate manner. However, not all general ledgers are created equal.
If you have a unique chart of account structure, have large transaction volumes and hundreds or more accounts, NetSuite is a great solution and infinitely scalable to handle your intricate bookkeeping needs.
It also aids in audit control and preparation so you can be certain your metrics reconcile, are reliable and readily available in the event of an audit or review.
27% of finance leaders claim enhancing the existing capabilities of the ERP as their top technological priority. - EY Digital Disruption in Finance Survey
NetSuite is a great tool if you need to consolidate multiple companies or intercompany transactions. An accounting system like QuickBooks Online is great for single-entity businesses, but if you have several entities you wish to consolidate for reporting and planning, it becomes increasingly more difficult to manage without additional resources.
However, the additional NetSuite features come at a cost. The basic package you might come across will be exponentially more expensive, potentially twice as expensive annually for the consolidation capabilities.
If your primary need is to consolidate companies for reporting purposes, you can continue to use a system like QuickBooks Online and leverage a cost-effective and robust FP&A tool like FutureView’s Platform and white glove finance solutions to transcend how you report and analyze the business.
A unique use case for NetSuite is if you deal with multiple currencies and foreign exchanges. Foreign exchange rate fluctuations can be nearly impossible to predict and companies doing business in several countries
If you sell to customers who pay in multiple currencies using QuickBooks Online, you’ll need to manually convert those currencies to U.S. dollars, which could otherwise be automated in NetSuite.
How you classify and structure your accounts will have a lasting impact on your ability to report, plan and forecast. Your chart of accounts used for accounting should also be used for FP&A purposes. This consistency is key for finance to deliver the necessary actionable insights that drive strategic decision making for the business.
Complex bookkeeping can be cumbersome to maintain, even with the help of advanced systems. Be certain your Chart of Accounts is structured to reflect how your business classifies and allocates transactions.
This structure is necessary not only for accounting purposes but also for reporting, forecasting and planning at the department and business unit level.
After committing to a major ERP or accounting system overhaul, the majority will experience a painful process that typically exceeds budget and the time to implement any or all of the intended modules. Set expectations, because most NetSuite implementations will take six months or longer to go live.
The process requires heavy internal involvement from you and your team, so be prepared to commit a significant portion of time to working with implementers that can take away from internal workflow capacity.
It’s the nature of many systems, where you try to plan for every scenario but inevitably something unforeseen complicates matters, sometimes entirely out of your control. Be sure to plan accordingly, so that all stakeholders are aligned, expectations for going live are set, and roles and responsibilities are clearly defined.
Partnering with an experienced implementer, one that understands both your technical and finance function’s needs is a must. Regardless, the go live deadline you set is likely to either be pushed back or only possible with partial completion of your intended migration.
To plan for the future, you first need to analyze the past. Gathering historical operational and financial data and developing a clear analytical framework to track and measure performance is necessary to lead to informed decision making.
You would think that integrating your historical metrics from your old general ledger would be table stakes - unfortunately, it’s not that simple.
Factors such as the structure of your accounts, the aptitude of your implementer, and the availability of data from your previous systems all contribute to the complexity of migrating your historical data to your new ERP.
Nevertheless, mapping and grouping your data is essential for accounting and FP&A purposes, so if you are unable to do so without disrupting your teams’ workflows, it is worth deciding what data is necessary and evaluate alternative solutions for planning and forecasting.
72% of finance leaders say selecting the right implementation partner is the biggest challenge to successfully deploy digital solutions. - EY Digital Disruption in Finance Survey
The use of NetSuite SuiteAnalytics Connect gives you data warehousing storage and access to your data, which is necessary for any third-party application. ERP systems provide many advantages, but it’s not a Panacea and you will find a need for connecting data to other systems.
Even if you initially don’t expect to connect any other systems or bolt on new tools during implementation, having the flexibility from day one won’t marry you to any one solution.
It is not always offered outright by the reps, but it is available, and best to include in your initial implementation negotiations. You can expect to pay a few hundred dollars per month for Suite Analytics, though there are packages where it can be included with your expected subscription fee.
NetSuite is capable of generating a P&L and your basic financial statements, though it may still need to be built manually in Excel.
Custom reporting is limited, and NetSuite explicitly advocates you utilize Microsoft Office for your reporting, revealing they would rather you spend your time in Excel creating custom reports yourself. This tedious, prone to error process brings you full circle back to square one.
When demoing the tool, it might seem to an IT team or non-finance executive that the financial reporting capabilities will get them out of Excel Hell. Netsuite was not intended for advanced or consolidated reporting and leaves little to be desired. Producing monthly management reports or board packages becomes a manual process requiring hours of work in Excel.
By design, ERP systems consolidate your business systems into one place. This was a necessary solution for finance and IT before the advent of integrations and open APIs. It’s now much easier to connect multiple systems together and bring in data from third party sources. Having all of your business systems in one place might sound like a convenient solution, but the reality is the modules outside of the general ledger lack necessary functionality.
Ask your CRO or head of sales if they would like to navigate away from Salesforce or Zoho in favor of a NetSuite CRM module - then take cover and brace yourself for their reaction.
Be prudent in your evaluation of tools and consider alternatives before committing to such a large ticket item like a new ERP. While it can seem beneficial to consolidate systems, the reality is the capabilities of these systems lack their counterparts in the market, and the sum of the parts is, in fact, greater than the whole - and at a more cost-effective rate.
Your operations, sales and marketing business units will lament the idea of moving off their beloved Salesforce in favor of NetSuite’s CRM and finance will be unable to produce the detailed reporting and forecasting needs of the business without an additional FP&A dedicated system.
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Committing to a new ERP is a substantial strategic decision requiring proper planning and alignment across the organization. The total cost of ownership and implementation timeline often surpass initial expectations, but being strategic in what modules you include, devising a cohesive plan to align your team and turning to best-of-breed systems will set you up for the greatest success.
If you’re looking to maximize the reporting, budgeting and forecasting capabilities of your accounting software our tools and team of proven finance executives can help. We also provide a range of finance white glove solutions to bolster the impact of your finance function. Contact us today to learn more about our FP&A solutions.
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