Outgrowing an accounting package is probably the most-encountered reason for an expanding business looking for enterprise resource planning software. When this happens with your organisation, there’s a lot to consider; while buying the accounting package was a simple matter and probably took less than a week from determining which software you wanted, to having it up and running, things are not only more complex with an ERP solution, but come with lasting ramifications. Many equate the process with marriage: a careful decision results in lasting happiness, whereas disaster can result from one entering into frivolously.
Of course, being in a position where accounting software no longer cuts it is a positive development. It means business is going so well that the company is bursting at the seams. The ‘growing pains’, however, are real, and generally involve a sense that the business is getting out of control. We often see symptoms like cobbled-together point solutions – something taking care of the warehouse, another thing for customer management, and yet another for logistics. These ‘things’ could be as simple as Excel spreadsheets (and often are) or slightly more sophisticated packages, sometimes integrated with the accounting package, other times operating independently and requiring tedious manual data transfer.
Now, by no means are we knocking accounting packages. Whether Xero, Quickbooks, AccountRight, Reckon, or any one of hundreds or even thousands of basic systems available today, these products are mature, effective, and absolutely fit for purpose – so long as that purpose is running a fairly simple small business. The issue isn’t the software, it is the growth of your company from a relatively unsophisticated operation, to a more complex one (more on that in a moment).
The essence of an accounting package
As a long-time accounting software user, you probably don’t need an explanation of what it is and what it does. But, for a quick comparison of accounting software versus an ERP package, it’s worth the ‘elevator pitch’, or two-second overview.
Accounting packages are usually cloud, usually low-cost and usually the first software besides Office purchased by most small businesses. The primary function is cash flow management, with the software easing management of income and expenses, bank reconciliations, and basic financial health visibility. It’s in the name – the software addresses essential accounting functions. What it lacks is all the bits around accounting, such as operations. Even detailed business reporting is absent, and generally requires data exports to spreadsheets before analysis.
And the essence of (NetSuite) ERP
By contrast, an ERP like NetSuite does all the accounting stuff but offers a wide and customisable range of options so you get a system that works for your business. In short, NetSuite offers complete financial management including delivering preconfigured KPIs, business process workflows, reminders and customisable dashboards showing the impact of operations and accounting processes on one another, inventory levels, P&L, pending tasks, and more. If you have subsidiaries or multiple locations, NetSuite handles it all, delivering real-time consolidated reporting, and automated currency conversions. Doing business in Aussie or Singapore? NetSuite handles foreign tax regulations without breaking a sweat.
Other features that eliminate spreadsheets and clunky integrations include Accounts Payable Automation, Accounts Receivable, Fixed Asset and Lease Management, Inventory Management, Reporting, CRM, eCommerce, Project Management, Warehouse Management, Production and Professional Services Management. In fact, almost everything you might require is likely to come right out of the NetSuite box.
Check out this full comparison of NetSuite vs Xero; bear in mind, that you can substitute Xero for almost any accounting package and the comparison still applies.
More complex, you say?
Just a final word on what defines ‘more complex'. This is a bit like asking ‘how long is a piece of string’ as it differs from organisation to organisation. Some low-headcount businesses have highly complex requirements; others have high headcounts but relatively straightforward operations. Suffice it to say, there is one commonality – and that’s the creeping sense of unease around effective management and control.
This routinely relates to visibility. We can thank management guru Peter Drucker for the perhaps obvious truism that you cannot manage that which you cannot measure; you can’t measure what you cannot see, either. With these workarounds and point solutions, knowing precisely what’s happening, where, and when, becomes a growing challenge.
And that, really, is the promise of ERP. As an integrated, company-wide system, getting daily insights into business performance, the state of play, and even the status and stock levels of suppliers and customers becomes that much easier. It puts information at your fingertips, and at the fingertips of those working within the company who need to know.
Keen to learn more? We’d love to take a look and let you know if NetSuite is right for you. Do get in touch!
