Blog Credit: (NetSuite vs. QuickBooks | NetSuite)
As your company grows and accounting becomes more complex, you’ll find that entry-level accounting software has clear limits. Handling mature business challenges using spreadsheets and clusters of disparate applications just doesn’t work—which is why companies often upgrade from QuickBooks to NetSuite.
If you’re interested in upgrading your accounting solution, you need to understand how both QuickBooks and NetSuite meet your business requirements. If you want to lower operational costs, automate key business processes and boost productivity, both now and in the future, you should consider which features and functionality will both increase efficiency and scale with your business.
Both NetSuite and QuickBooks offer software designed to help businesses manage their accounting processes, but there is a significant gap in the depth of features. Below, we discuss NetSuite vs. QuickBooks and compare each platform so business leaders can decide which accounting solution will meet their needs now and for the long run.
Note: NetSuite is a suite of business management applications that includes full-featured accounting functionality so businesses with NetSuite don’t need to manage multiple systems or applications as they do with QuickBooks. But for the purposes of this comparison, we’re going to focus primarily on accounting functionality.
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Video: NetSuite vs. QuickBooks
NetSuite’s financial management solution supports businesses at every stage of growth with a cloud-based, unified platform that provides real-time data with customizable fields and role-based dashboards. NetSuite offers an entire suite of business solutions beyond accounting to serve companies looking to increase operational efficiency throughout the business: CRM, ecommerce, HR management software (HRMS), professional services automation and more. And because it is built for the cloud, it provides business data in real-time and requires no added IT infrastructure.
NetSuite works as an end-to-end accounting solution, enabling cash flow and revenue management, automatic quote-to-order fulfillment and integrated planning and budgeting. It goes beyond basic bookkeeping and includes functionality that can reduce the need for additional headcount. And, it’s built to run your entire business.
QuickBooks Online Overview
QuickBooks is the starting point for many small businesses in need of bookkeeping software, thanks in part to its low price point. Users can track income and expenses, connect bank and credit card accounts, and create financial reports like income statements and balance sheet reports.
QuickBooks Online is a standalone, cloud-based product that is limited strictly to accounting. QuickBooks Enterprise has some inventory management functionality, but it’s fairly limited overall and relies on third-party integrations for advanced features. Detailed reporting may require exporting spreadsheets and viewing data in and across multiple platforms.
QuickBooks Enterprise Overview
QuickBooks Enterprise fundamentally remains a desktop program and doesn’t have a true cloud offering; users can pay for a third-party hosting company to take it off-premises, but this adds yet another vendor to manage and does not deliver all of the benefits of the cloud. Inter-company transactions are manual at best; the opportunity for errors is abundant.
QuickBooks Enterprise does not automate or solve for a range of critical business processes like subscription billing, revenue recognition, asset management and multidimensional reporting. Enterprise users must resort to multiple point solutions with predictable difficulties: inconsistent reports, manual re-work, redundant processes and continually multiplying Excel sheets.
QuickBooks Enterprise offers a traditional, hard-wired chart of accounts to minimize complexity—unfortunately, this also limits the ability to capture transactions and organize them into your specific financial structure of assets, liabilities, revenue and expenses.
NetSuite vs. QuickBooks
QuickBooks suits some small businesses because it accommodates bookkeeping: managing invoices, paying bills and very basic cash flow tracking. When bookkeeping is all that is needed and accounting demands are minimal, generating month and year-end reports and helping with annual business taxes is enough.
QuickBooks may check off many boxes when it comes to standard bookkeeping, but NetSuite offers a complete financial management solution that increases efficiency and reduces the need to add to headcount as the business’ financial needs become more varied and complex. More than just a collection of accounting information, NetSuite comes with preconfigured KPIs, workflows, reminders and customizable dashboards that show exactly how operations and accounting processes align and what needs to get done.
Simply put, NetSuite does more.
NetSuite combines core finance and accounting functions with strong compliance management. With real-time access to financial data, you can drill into details to quickly generate statements and disclosures that comply with multiple financial regulatory requirements, including ASC 606, GAAP, SOX and more.
How NetSuite Features Compare To QuickBooks
The two platforms may serve similar purposes and check off some of the same boxes. But a close comparison shows that there are as many differences as similarities, especially when it comes to the robustness and completeness of the feature sets.
For growing companies, depth of functionality has a direct effect on the time and resources required to complete finance tasks—a recent survey of NetSuite customers shows that superior features and functionality are the primary reasons why CFOs switch from QuickBooks to NetSuite.
Here are a few examples of how some of NetSuite’s easy-to-use key features compare.
Whether a sales transaction consists of a single action, a series of actions across a period of time or different types of deliverables in a bundle, NetSuite enables accounting teams to comply with revenue recognition requirements and schedule revenue to be recognized automatically. Financial statements and forecasts are accurate and updated in real-time.
This is especially helpful for software and services companies dealing with multiple deliverables—such as upgrades, services delivered over time or additional licenses—that require accounting teams to recognize and defer revenue at different points in time. QuickBooks can construct clever workarounds for the limitations, but workarounds inevitably generate a morass of manual journal entries, complicated recognition schedule spreadsheets and unclear or nonexistent forward visibility.
NetSuite helps companies gain real-time visibility into billing and financial activity. This adds more transparency through consolidated invoicing, automated rating processes and support of multiple pricing models to capture setup fees, license counts and variable consumption in one step.
NetSuite’s billing capabilities truly outshine QuickBooks when it comes to subscription billing. Automated renewals help retain revenue and reduce the need for manual oversight. Businesses can also schedule subscription changes, removing the need to manually monitor and track them, and set customer-specific pricing and discounting.
NetSuite SuiteBilling can combine one-time product or service purchases with recurring services on a single bill; for example, a mobile phone, its activation fee and first month of service. SuiteBilling also supports multiple subscription billing options, including fixed rate (annual, multi-year and monthly), consumption-based or a combination. You can also manage promotional pricing, such as a discounted rate with adjusted automatic billing after free trial period, and easily modify contracts or put subscriptions on hold and restart.
NetSuite’s general ledger (GL) provides accounting data from a consolidated level down to individual transactions, allowing you to customize your GL to meet your business needs. Users can add custom GL impact lines to transactions, such as invoices or vendor bills, across single or multiple accounting books, reducing the time and effort required for account reconciliation, period close and audit processes.
A simple chart of accounts makes transactions easier to categorize and report on at the transaction level, removing the need to go through hundreds of lines to see what transactions should be coded to. With prebuilt mapping capabilities between your primary and secondary chart of accounts, as well as book-specific functional currencies, the NetSuite Multi-Book engine can record all book-specific activity based on a single business transaction from the general ledger, revenue recognition, expense amortization, depreciation, P&L allocations and more.
Multidimensional reporting eliminates the need for a complex chart of accounts, letting you add tracking details at the transaction level. QuickBooks tries to make its solution work with tags, but there are a limited number of tags and they are used up quickly as users try to implement workarounds.
QuickBooks doesn’t provide any purchasing controls, but NetSuite’s approval workflow engine reduces risk by ensuring that purchasing and accounting controls and policies are followed. This makes approvals easier in a time when people aren’t sitting next to one another—whether it’s because of multiple offices or a work-from-home environment. Users can automate discount calculation and exception processing when invoices do not match purchase orders, limiting manual data entry errors and decreasing the time it takes to process bills from vendors.
NetSuite helps enforce segregation of duties by controlling the data and functionality users have access to via role- and user-based permissions. By comparison, QuickBooks has a limited approval workflow and a few user roles which does not deliver a strong control environment and true segmentation of duties. For example, an accounts payable process that allows one person to generate, approve and pay a bill creates an environment that is ripe for embezzlement.
NetSuite’s accounts receivable features allow you to manage your customer list, track your receivables and receive payment, all without needing to enter detailed debits and credits. Configurable dashboards, reports and KPIs provide a real-time view into accounts receivable data such as customer aging, invoice analyses, recurring invoices, deferred revenue and exception reports that flag account anomalies.
You can also offer customers self-service access to real-time insights on purchase orders, inventory levels and payment information. This simplifies the payment process with invoices by email with several payment options. QuickBooks can create journal entries, but it can’t handle downloads and schedules. NetSuite Advanced Revenue Management makes it easy to forecast and record revenue from contracts with milestone billing and a contract renewal feature. Forecasted revenue automatically converts to recognized revenue as performance commitments are completed.
Fixed Asset and Lease Management
You can manage an asset’s complete lifecycle and easily report on all fixed assets, tracking depreciating or nondepreciating company assets from creation to depreciation, revaluation and disposal. This makes it easier to document and maintain an accurate record of all capital assets, including acquisition costs and asset status.
NetSuite also addresses the new accounting and reporting requirements for leased assets, specifically setting up amortization schedules and splitting out interest expense from rental expense for reporting purposes on balance sheets and income statements, supporting multiple accounting treatments.
QuickBooks does not offer these fixed asset or lease management features.
NetSuite inventory management gives companies clear visibility of their inventory. NetSuite inventory management minimizes manual processes by automating real-time tracking of inventory levels, orders and sales throughout the inventory lifecycle, and provides insights needed to make data driven decisions, maximize sales and gain greater control of their business. Warehouse management features like inventory counts, pick, pack and ship, integrated barcoding and multi-order picking are also available.
QuickBooks and NetSuite both have standard accounting reports, such as P&L and cash flow. But NetSuite’s expansive library includes real-time reports, from revenue forecasting to consolidated parent and subsidiary reports. And thanks to NetSuite’s multicurrency feature, you can report using the local currency of the countries where subsidiaries are located.
NetSuite allows detailed drill-down and drill-across reporting for any record in the system with simplicity. NetSuite reports do away with static reporting, giving flexible views for reports from department, location, product line or any number of operational perspectives.
Why You Should Choose NetSuite
As you grow, the number of customers increase, you hire more employees, process more data and require greater automation. You need an accounting software solution that increases efficiency and serves as the foundation for your increasingly complex business.
Take for example Brex, a fintech company that switched to NetSuite in preparation for entering markets in new countries. While running on QuickBooks and Excel, company leaders had to manually pull monthly depreciation and amortization reports from spreadsheets.
Now, “it’s just a one-button push for the month-end process,” says controller Kevin Moore.
Brex also uses NetSuite to ensure it’s meeting global accounting and compliance standards while delivering corporate credit cards to startups.
On the other hand, QuickBooks’ limitations mean companies have to layer on more systems or applications for specific purposes: revenue management, fixed assets, procurement, order management, billing, inventory management, services delivery and more. These add costs. And if these systems aren’t integrated, your finance staff must maintain half a dozen different applications and risk errors trying to transfer and consolidate data amongst disparate programs, each with its own configurations and end-to-end processes—and you’ll have to add personnel to manage it all.
“There’s an inflection point where the systems you’re using just won’t work,” says Sy Gray, co-founder of the widely popular Honey Pot Company, a consumer packaged goods retailer.
Gray and his co-founder tried, through consultants, to integrate their company’s order details with QuickBooks so they could meet the EDI requirements of big-name retailers like Target. After many failed efforts—and racking up costs, with the prognosis of more—the company switched to NetSuite.
Once implementation is finished, Honey Pot will be able to house all order data centrally in NetSuite and convert its purchase orders into invoices automatically vs. manually—and more efficiently service 20,000 retail locations worldwide. Migrating customers from QuickBooks to NetSuite is simple with SuiteSuccess Financial First. When considering if it’s time to upgrade, think about current needs and scalability. And before deciding on financial accounting software, think about your long-term business goals—QuickBooks might work as a quick fix, but will it meet your needs during seasons of growth?