A Company Journey: Quickbooks Online / Desktop, vs. Netsuite

netsuit vs quickbooks

The company was growing quickly, we needed better tools, we made fast decisions, and before you knew it, we had tried three different accounting platforms in two years. We learned the hard way. Let me walk you through what happened, so that you don’t have to.

I work as a staff accountant at a software company with 20-50 employees, which has started to exit the startup stage. Two years ago, Management decided to make the switch from QuickBooks Desktop to NetSuite. This year, the company is switching from NetSuite back to QuickBooks (Online). Yes, after only two years and a whole lot of man and woman hours, we are going back.

So, given the company is still moving forward and growing, why are we are moving back to the simple accounting platform that we started with when there were just a handful of employees? Let me explain and hopefully it will help others decide when it is really the right time to switch.


QuickBooks: benefits and limitations

QuickBooks (Desktop or Online) is often seen as the starter accounting platform. It is called “Quick Books “after all, and when we think of quick, we think easy. A Google search or YouTube video will show you how to do just about everything within the application, whether you’re a beginner user or an experienced bookkeeper or accountant.

Yes, QuickBooks is fairly easy to use, but the ease of use does come with its limitations. As companies grow and their processes increase in complexity, they may feel their needs are no longer being met by QuickBooks. Companies past the startup stage may need to account for larger and larger amounts of data and more complex accounting transactions, as well as create detailed financial reports and dashboards. And so, as revenues and expenses grow, Management begins to look for a system that encompasses not just accounting but also a deeper insight into financial analysis and planning… a system like NetSuite.

At what stage in the business life cycle does a company outgrow QuickBooks?

My professional experience has shown me that the switch to a bigger and more robust accounting software is probably not as imminent as you might think. QuickBooks Online and its many applications and plugins (software that integrate with QuickBooks to perform the functions it cannot) can oftentimes fill the gaps that a fancier bigger system may offer for a very small fraction of the price and a lot less effort.

Why we decided to switch from QuickBooks Desktop to NetSuite

Let’s take it back two years. The company was beginning to have a steady influx of new customers and a healthy amount of recurring revenue from the sale of annual software licenses that renew each year. The biggest reasons for switching accounting platforms were:

1. Duplication of invoices by Sales and Accounting.

New invoices were being created in a software system used by Sales (in this case, Sugar CRM). But, these invoices needed to be re-entered by Accounting into QuickBooks Desktop. So, invoices were being entered in twice: first by Sales when deals were closed, won, and sent to customers, and second by Accounting when recorded into the books to track revenue and accounts receivable. Each invoice lived in two separate applications. Think about the manual nature of this process… it took a lot of (unnecessary) time and allowed room for errors.

2. Inability to track deferred revenue in QuickBooks Desktop.

As a software company, we receive revenue from the software licenses we sell in advance, but Generally Accepted Accounting Principles (a national guideline used to keep accounting standards uniform and reliable) states that even though a customer pays for a year upfront, the revenue must be allocated across the term of the contract. In the case of a year contract, the revenue is divided equally over each month. This is known as deferred revenue.

QuickBooks Desktop does not have the ability to track and record this on its own, so the company used an additional spreadsheet to track this and manually recorded the revenue each month. This spreadsheet grew to thousands of rows of data, which were entered and updated manually. Errors were too easy to make, and errors cause inaccurate revenue.

NetSuite: the solution to our accounting platform problems?

Management decided NetSuite would solve these problems. NetSuite is a cloud-based ERP (enterprise resource planning) solution. This robust software has the ability to process the data and needs of all of your company’s departments, including Sales and Customer Relations Management, Marketing, and Human Resources. And, it can do all of that in real-time, from anywhere, via the internet (unlike QuickBooks Desktop).

Additionally, NetSuite can act as a CRM for the sales team to track prospects, sales, upsells, and renewal opportunities, and create various reports to plan and track goals. So, when an invoice is created from the sales department, it lives in the same house, so finance is automatically updated.

NetSuite can also perform some of the more complex journal entries that QuickBooks is not able to—not only those deferred revenue entries, but also cost allocations across departments (usually based on overhead)  and other statistical journal entries. NetSuite is great for Accounting because when fully maximized it can eliminate double work. With all of the data being stored in one place, users have the ability to create an incredibly large variety of reports. It’s not only great for Sales and Finance departments but also has the ability to run marketing campaigns, manage human resources, track inventory, and much more.

Making the switch from QuickBooks to NetSuite took about two months to get up and running smoothly. Implementation was relatively easy and support was provided. The biggest challenge was for the sales team who had a little bit of trouble in migrating historical sales data, which somehow caused erroneous invoices to be created in the books. This was the biggest waste of time and caused a lot of reconciliation but once NetSuite got up and running it was easy to use for most basic functions. But, circling back to the accounting aspect, it did present some unexpected issues.

1. Overly complicated user experience.

NetSuite offers a wide range of reports and “saved searches” that pull together numerous types of data such as sales contract dates, license terms, upsells, revenue, etc. But, the filters are extremely complex for the average user without database experience to manipulate and so the reports that were actually generated often weren’t the intended reports. You can also use SQL to create reports, but if you don’t know how to use SQL you have to pay NetSuite extra money to do some of the customization or report generation for you. This of course can be costly.

2. Lack of easily accessible support.

Remember earlier when I said that a quick internet search can provide you with the answer to just about any QuickBooks question you have? Not so much with NetSuite. I have spent two stubborn hours trying to find out how to change one simple piece of information on an invoice in NetSuite… something that would have been so easy to do in QuickBooks. There are no training videos, and routine tasks can sometimes be anything other than “quick.” They do offer a help guide built into the software called Suite Answers, but honestly, it rarely provides me with the answer that I am looking for. A support plan from NetSuite comes at an additional cost,  but given the lack of easy-to-find support,  it is needed.

3. NetSuite is expensive, really expensive.

Think in the tens of thousands of dollars a year for a company with a handful of users, compared to QuickBooks at a few hundred dollars per month. The cost of NetSuite also increases each year. We obviously knew the costs going into the switch, but there were other inefficiencies we did not anticipate.

4. Migration to Salesforce eliminated pain points and brought others to light.

Originally, the whole plan for NetSuite was to make life easier for Sales and Accounting; they could utilize it for order processing, reporting, and bookkeeping and accounting and not have to double up on invoicing. But, shortly after implementing NetSuite, we also made the switch to Salesforce, which was easier for the sales team to use and their preferred platform. And, because we synced Salesforce and NetSuite, there invoice duplication was no longer a problem.

So now, NetSuite, which was once home to several users in the company had been vacated by everyone except for Accounting (a team of two, I might add). It no longer made sense to keep a robust system with a robust price that was only being used for accounting. The price was simply too steep for how much we were using it. We started exploring other options and ultimately decided on QuickBooks Online for accounting. It still offered the cloud-based accounting and real-time processing—an improvement from the QuickBooks Desktop days—and supported integrations with many other applications, providing similar results of ERPs like NetSuite.

We were able to find two solutions—Breadwinner, which links orders to invoices in QuickBooks and ProRata to recognize deferred revenue—to handle the deferred revenue issue (one of our biggest initial pain points). Since they are both connected to QuickBooks Online, the data is reliable and no double work is required. These combined solutions were still much cheaper than NetSuite.

What I have learned is that QuickBooks and its ease of use and popularity are a really good thing. Because so many businesses use it, there are many software companies who cater to those businesses and the needs they may have, and often for a fraction of the price. NetSuite is truly a great and incredible software with a lot of potential but it has to be utilized in order to receive full economic benefit. If your company is using QuickBooks Online, it’s best to fully explore all of the applications that can supplement your specific needs before making a big switch. 

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