What Is NetSuite Accounting Software?

NetSuite accounting software is a cloud-based accounting platform built as part of the NetSuite enterprise resource planning (ERP) suite. As a full-scale, cloud-based ERP system, NetSuite integrates accounting capabilities, customer relationship management (CRM), e-commerce, inventory management, and supply chain management, project management and more in a single platform, going beyond the capabilities of traditional accounting software.

It is created for growing and established businesses that are looking to streamline financial operations, eliminate manual processes, and gain real-time visibility into their financial performance and cash flow. In this guide, we’ll focus specifically on the accounting and finance modules of NetSuite ERP. We’ll explore how NetSuite accounting software works, its benefits and features, and who it’s best for, and help you determine if it’s the right option for your needs.

NetSuite Accounting Software Explained

NetSuite accounting software is one portion of the NetSuite cloud-based ERP platform, which provides businesses with comprehensive financial management capabilities and centralizes their financial data. It offers significantly more robust financial management capabilities compared to entry-level accounting platforms like QuickBooks, and allows businesses to run, optimize, and automate financial processes as they scale from a few million in revenue to $1+ billion.

Compared to on-premises accounting systems, NetSuite is entirely cloud-based, providing real-time data access from anywhere in the world. It is best suited for companies that have outgrown other platforms like QuickBooks, typically when they reach $5M in revenue or more, and/or have more advanced accounting needs like multi-currency, subsidiaries, international sales, etc.

How NetSuite Accounting Software Works

NetSuite accounting software is integrated into the overall ERP system, so businesses don’t need to utilize separate platforms. It works by utilizing:

• Cloud-based architecture: The software uses a cloud-based architecture, workflows, reporting, and automation to operate in real time, allowing for quicker and more informed decision-making.
• Unified data structure: The software acts as a single source of truth for an organization’s financial and operational data. With data from all departments being stored in the system, there is no need for duplicate data entry, complex integrations, or CSVs.
• Automated workflows: NetSuite has robust automation capabilities, allowing you to build workflows to automate and streamline processes across the general ledger, accounts payable, accounts receivable, cash management, reporting and more.

The Core Accounting Functions in NetSuite

To fully understand how NetSuite accounting software works, it helps to know the core functions it supports. They include:

General Ledger

This function maintains thorough, real-time financial records, organizing all transactions (assets, liabilities, equity, revenue, expenses) by account type. NetSuite provides support for unlimited accounts, sub-accounts, segments, multi-currency transactions, subsidiaries, and consolidation for precise financial reporting.

Accounts Payable (AP) and Accounts Receivable (AR)

The AP function helps to automate vendor payments, bill management, and approval workflows to save time and improve efficiency. The AR function helps oversee customer billing, invoicing, collections, and payment processing to increase liquidity and reduce the credit-to-cash cycle. Both functions help simplify processing while improving cash flow visibility.

Cash Management and Cash Flow Visibility

This feature provides a complete, real-time look at the organization’s cash flow, liquidity, and financial operations. It helps provide the reporting tools and visibility that are needed to enhance cash flow, manage bank accounts and liquidity, and make smart financial decisions.

Financial Reporting and Financial Statements

This function helps create real-time, customizable financial reports, including balance sheets and income statements, to speed up the month-end close. It also delivers NetSuite dashboards, metrics, and audit trails for additional insight, while automating inefficient manual tasks like account reconciliations to accelerate closing.

Tax Management and Revenue Recognition

This feature helps manage taxes, including value-added tax (VAT), sales tax, and consumption tax, by automating tax calculations, providing real-time currency conversions, and supporting compliance with accounting standards and complex revenue models.

Advanced Accounting Capabilities in NetSuite

Along with the core accounting functions it provides, NetSuite accounting software also provides advanced accounting capabilities. These are the features that businesses need as they scale, such as:

• Consolidation and subsidiaries: As an organization grows, it may acquire or form subsidiary companies. The consolidation feature helps combine the parent company’s and its subsidiary’s financial statements into a unified set to ensure accurate financial reports.
• Multi-currency and global operations: Businesses with international operations or multi-currency needs utilize the global consolidation feature, which manages multi-currency transactions, converts different currencies, and handles complex tax compliance.
• Audit trails and compliance: By creating detailed, comprehensive audit trails for transactions and modifications, businesses are better prepared for audits and can comply with various accounting regulations.
• Forecasting and metrics: Using real-time data and advanced reporting capabilities, the software provides powerful forecasting capabilities, including financial, sales, and demand forecasting. These metrics and forecasts help organizations make data-driven decisions, manage risks, and budget strategically.

These advanced features help businesses, especially finance teams, to prioritize financial and business performance over transactional work.

NetSuite Accounting Software vs. QuickBooks

If you’re considering adopting NetSuite accounting software, you likely currently use QuickBooks or another similar platform. QuickBooks is designed for small businesses with straightforward accounting processes. As organizations continue to grow and scale, they often outgrow the capabilities that QuickBooks offers. They may encounter user capacity limitations, slow performance with large data volumes, manual spreadsheet work, and insufficient advanced features for things like consolidation and customized reporting.

NetSuite accounting software and QuickBooks vary in several ways, including:

• Simplicity: QuickBooks is user-friendly and ideal for simple accounting needs, while NetSuite is more complex and provides both core and advanced accounting capabilities.
• Automation: NetSuite utilizes automation to complete workflow processes, including accounts payable, accounts receivable, and cash flow functions. QuickBooks relies more on manual processes that take longer to complete.
• Scalability: NetSuite accounting software is designed for growing businesses that need high scalability, while QuickBooks is designed for start-ups or small businesses.
• Real-time data: QuickBooks can use real-time data in certain financial reports, but static reporting in PDF formats or Excel spreadsheets is common. Since QuickBooks is only for accounting (and lacks CRM, inventory, and other operational data), you’ll likely require numerous integrations to consolidate data. This can create data lags, data siloes, and other issues with data integrity. NetSuite is built for real-time visibility by constantly updating financial and operational data in a single system.

To decide whether QuickBooks or NetSuite accounting software is better for your business, consider the capabilities you need, whether you’re outgrowing manual processes, how fast you’re scaling, and whether real-time data is imperative.

NetSuite as a Cloud ERP Platform

NetSuite accounting software is just one part of the broader NetSuite ERP platform. This main ERP software provides a unified platform to manage core business processes, including:

• NetSuite CRM, e-commerce, order management, and supply chain
• Inventory, warehouse management, and procurement
• Project management and professional services automation
• Human resources and workforce management
• Field service management and more

By using a single platform to manage all these different business aspects, organizations can increase operational efficiency, boost scalability, and enhance customer satisfaction. NetSuite’s cloud-based dashboards also deliver real-time visibility into financial data, key performance indicators (KPIs), and other relevant metrics. As a cloud platform, NetSuite is accessible from anywhere at any time, providing employees with secure, consistent access to crucial data.

Who Uses NetSuite Accounting Software?

If you’re thinking about pursuing NetSuite accounting software for your business, it helps to know who it’s best for. Typically, this software is best suited for:

• Small growing businesses preparing to scale
• Established mid-market organizations
• Multi-entity companies that need consolidation and subsidiary capabilities
• Private equity-backed firms that look for investor-grade reporting and scale

For businesses currently on QuickBooks, it is advised to start exploring ERP options as you cross the $5M revenue threshold (earlier if you receive Private Equity funding). Small issues become large issues as you pass the $10M threshold while still operating on QuickBooks. As these organizations grow and scale, NetSuite scales alongside them, preventing the need for system replacements and providing the advanced resources they need.

Benefits of NetSuite Accounting Software

Businesses considering NetSuite accounting software want to know that the benefits are plentiful and worth the implementation process. For growing organizations, NetSuite’s accounting software offers advantages like:

• Streamlined financial operations: By reducing inefficient manual labor in your financial processes, such as journal entries and invoicing, and replacing them with streamlined interfaces and automation, businesses get the benefit of enhanced financial operations.
• Better decision-making with real-time data: As a cloud-based software, NetSuite offers real-time updates that enhance financial visibility. This allows for more informed decision-making based on actionable data.
• Single platform for business management: As a part of the whole NetSuite ERP platform, businesses get access to a variety of other business processes, such as CRM, inventory management, and more, in a unified place. This helps increase efficiency and removes the need for an abundance of integrations.
• Improved customer satisfaction: NetSuite accounting software integrates financial data with customer service, sales, and logistics, allowing for precise and quick service, which leads to more satisfied customers.
• Scalability: Formulated to grow with your organization, NetSuite accounting software can easily accommodate new users and an increased volume of transactions. Compared to platforms like QuickBooks that can only grow so much, NetSuite is highly scalable.

If these benefits sound enticing, NetSuite accounting software may be the right platform for your business.

Pricing and Deployment Considerations

With all the benefits that NetSuite accounting software offers, there are some considerations to factor in. NetSuite implementations are complex projects requiring significant consulting resources, which may be a barrier to some smaller businesses.

After the implementation, NetSuite follows a cloud-based pricing model, which varies based on the number of users, the level of functionality, and the chosen modules. Although it is not low-cost, NetSuite can help reduce the need for extensive, on-premise IT infrastructure and integrations which helps reduce its total cost of ownership.

Once NetSuite is implemented, it provides scalability, automation, and increased efficiency, which provides long-term value for organizations. This makes the investment worth it for most businesses.

You can get a NetSuite quote and demo by speaking with ScaleNorth.

Is NetSuite Accounting Software Right for Your Business?

To determine if NetSuite accounting software is the best option for your company, consider your business needs and complexity:

When NetSuite May Be Overkill

NetSuite may not be necessary when:

• Your business requires limited accounting functions
• Your business isn’t scaling quickly or has few employees
• Revenue is under $5M with no PE funding and limited YoY growth

When NetSuite Becomes the Best Fit

• NetSuite may be the right choice for your organization when:
• Your business needs advanced accounting capabilities
• Your business needs software that will scale with it
• Your business can benefit from real-time data visibility and a unified business management platform
• You want to automate manual processes that are slowing you down
• Your business has outgrown other software like QuickBooks
• You have the capital and cash flow to afford implementation fees
• You have an interest in PE funding or making a successful exit in the future

By comparing the above points, you can determine whether NetSuite is too much or just right for your company. If you’re still not sure, you can get a NetSuite consultation with ScaleNorth and learn more.

Work with a NetSuite Accounting Partner

If you think NetSuite accounting software is the best option for your business, it’s essential to work with a knowledgeable NetSuite partner who can properly implement and optimize your platform. An experienced partner can align the system with accounting standards and financial operations, helping to ensure ERP success.

At ScaleNorth, we focus 100% on NetSuite consulting and outsourced accounting services. More than half of our team members are certified public accountants (CPAs), bringing an unmatched level of expertise to the NetSuite accounting software implementation process. To learn more about NetSuite and whether the accounting software is the best solution for your business, talk to a NetSuite accounting expert today.