Competitor Analysis: NetSuite vs Xero

Our ongoing comparison series has so far seen us contrast NetSuite to Microsoft Dynamics 365 Business Central and MYOB Advanced. Today we take a look at Xero, a popular accounting software tailored for small businesses.

First, let’s get one thing out of the way. Most businesses comparing NetSuite vs Xero are looking to upgrade from one to the other, rather than choosing between the two. At Annexa, we’re often approached by businesses who started out with Xero but find it can no longer keep up with the demands and complexities of a growing business. Often these businesses have been working around the limitations of the software until it reaches the point of being untenable and frustrating.

This is because Xero is made for day-to-day accounting. It is not a module of a larger suite, but a standalone platform that fulfils only basic accounting requirements. NetSuite, however, is part of a comprehensive and integrated suite that grows alongside a business. So just as Xero is not a good fit for larger businesses, NetSuite doesn’t necessarily suit small businesses that employ just a few people – unless there is a fast growth trajectory on the horizon.

What is NetSuite

NetSuite is an ERP system offering a suite of cloud-based applications. 24,000 fast-growing businesses across the world use it to run key back-office operations, financial business processes, HR, professional services automation and omni channel commerce.

What is Xero

Xero is a cloud accounting software application for SMEs. Established in 2006, Xero has become the default accounting platform for many small businesses, with more than 2.7 million subscribers. The platform itself focuses squarely on the small business market. With Xero, customers can raise invoices, manage their monthly payroll, view cash flows, transactions and account details, and get an instant snapshot of their business’s financial health.

However, the platform has a number of limitations that lead many growing businesses to consider NetSuite as an alternative.

Here are some of the common signs that your business has outgrown Xero’s capabilities.

Signs you’ve outgrown Xero

1. Xero’s limited configuration options 

Early-stage or single-entity businesses are a great fit for Xero. But as your business’ needs grow more sophisticated, Xero can’t perform to the level required.

If you’re looking to open new ecommerce channels or manage business stock that requires a more comprehensive inventory, warehouse and distribution management solution, Xero simply can’t natively deliver the level of functionality required. Your only option is to look at third-party applications to complete the task, creating information silos and adding unnecessary costs.

On the other hand, NetSuite was built as a cross-functional platform in order to effortlessly handle a wide range of industry-specific business processes.It includes integrated manufacturing, inventory and warehouse management solutions that help you manage stock from production through to fulfilment and delivery; unified ERP and eCommerce solutions, plus the option of point-of-sale; and payroll, supply chain, global capabilities and limitless integration possibilities. 

2. Xero’s lack of data visibility and depth

When small businesses start out, Xero’s standard accounting reports provide a sufficient amount of business insight. But as growth happens, you’ll start to notice its limitations. For example, Xero doesn’t offer customised  reports by role or analysis. Additionally, if you have multiple entities, unintegrated accounting reports will limit your ability to capture real-time insight across all businesses. And with siloed systems, the task of consolidating data only becomes more challenging. 

In comparison, NetSuite brings all your data together in a single source of truth, and makes it easily consumable via smart reporting and visual analytics that help you generate meaningful and actionable business insights.

3. Xero is not ready for your inevitable expansion

Good businesses grow. Eventually you may find you need to open new locations, establish a foreign presence, or change your selling model from B2C to B2B. Whatever it is, you need to have the systems in place to understand, support and comply with the unique needs and requirements of each market.

In situations like these, Xero isn’t able to keep up.

NetSuite supports multiple languages, multiple currencies (conversions in real time) and multiple entities, while also offering tax, financial and accounting regulation support in the states/provinces and countries you will be expanding into.

Time to switch to NetSuite

Business growth will impact your operations in many ways. If you are spotting signs that Xero is inhibiting your growth, then it is time to begin assessing solutions that will handle your more complex processes today and grow with you tomorrow.

Learn how the flexible features provided by NetSuite can accommodate your cloud business system needs by speaking with a NetSuite consultant today.

NetSuite Vs Xero features

Annexa is a leading NetSuite partner with extensive experience designing and implementing comprehensive and customised business systems, including payroll solutions, financial management, warehouse management and ecommerce solutions.