For many companies, it's not a matter of if you’ll need a powerful enterprise resource planning (ERP) system such as NetSuite or Intacct, but when. As a company grows, the amount of data it generates also grows, as does its need for financial processes and controls. But when is the right time to say good-bye to QuickBooks and make the investment in an ERP upgrade? 

David Wieseneck, VP of Finance at Demostack, helps us answer this question.

Demostack is a technology start-up offering interactive and personalized product demos, delivered on any device and complete with post-demo analytics. Demostack has offices in the US and Israel and successfully closed their Series B fundraising in early 2022.

“I began my finance career in accounting, first as an auditor and then, after honing my skills, as a controller” explains David.  David’s career progressed, culminating with him joining Demostack as their VP of Finance in October 2021.  

“I’m passionate about Finance systems, integrations and finding the best tools available to help make my team more efficient.” says David. 

Is there a right time to consider an upgrade to NetSuite or Intacct?

Although every company is going to be different, it would be safe to assume that most companies begin their financial lives using basic general ledger software, such as QuickBooks or Xero. And as David points out, “While you can do a lot with QuickBooks and Xero, at a certain point in a company’s life cycle, as you grow from seed to A, to B, to C, you will start to realize that QuickBooks and Xero just can't handle everything you need them to.”

Here are two scenarios which may signal it’s time to start considering an ERP upgrade to NetSuite or Intacct. 

SCENARIO #1:  YOU’RE GOING INTERNATIONAL

Having multiple international subsidiaries is often a signal that it’s time to graduate from QuickBooks to NetSuite or Intacct. 

If your subsidiaries are in countries where QuickBooks is available, there are workarounds, such as consolidating everything outside of the system using Excel or Google Sheets. It is more work and is certainly more time-consuming, but it’s possible. However, if you have a subsidiary in a country where QuickBooks is not available, then things get trickier.

“Demostack is a perfect example of this” says David. “We have an Israeli subsidiary and a US subsidiary, and we cannot use QuickBooks in Israel. Using two different systems means I don't get consistency from my accounting teams - they have different processes. This has left me having to decide earlier than planned to leave QuickBooks.”

ISSUE #2:  INCREASED NEED FOR CONTROLS

As the complexity of your accounting and infrastructure grows, you begin to have a greater need for internal controls. Combine this with the possibility of an IPO in the coming few years and the need for SOX compliance (aka the ‘Sarbanes-Oxley Act’), the reality is that QuickBooks just won’t be able to cut it.  

“Very few companies will go public on QuickBooks; it’s just not built for it.” explains David. “If there is a possible IPO on the horizon, there is going to be pressure to have robust controls in place that will allow the company to scale post-IPO.  You're going to need controls and a segregation of duties in place to achieve compliance.”

But wait!  Three reasons to hold off … for now

Beware - it could be too early for you to be considering an ERP upgrade to NetSuite or Intacct.  According to David, “If you don’t have a Controller on the team, it’s probably a bit early. Your Controller is usually the one who’ll make the call and tell you that they need a better-controlled financial framework.

“You’ll also need more people to administer a big ERP system like NetSuite in order to use it properly, and there is a fairly long learning curve to learn the system. The implementation could increase your team’s workload for months after going live” warns David. Also remember, if your business needs to reduce headcount, losing ERP administrators would hurt, and being forced to migrate back to QuickBooks would hurt a lot more.  

Here are some reasons to stick with QuickBooks or Xero, for now.

1.     COST

Let’s face it, ERP systems like NetSuite and Intacct are big and expensive.

Explains David, “Ballpark figure, these types of ERP systems are going to start at around $25k, then add another $25k for implementation. This means that in Year 1, your total spend is going to be about $50k and this number will keep growing as your business grows. That’s a whole lot more than a few hundred dollars a month for QuickBooks.”  

“It is typical for a company to wait until they close their Series B or Series C, because that’s normally a time when you have the cash and can make that kind of commitment,” says David.  

2.     EASY TO USE

QuickBooks and Xero are known for being user-friendly. They are easy to learn and easy to use, which means everybody on staff can use them with little to no training. Even new hires are likely to have used the programs elsewhere.

3.     EASY TO ADMINISTER

QuickBooks and Xero are easy to administer which means it's easy for your Controller or Director of Accounting or VP of Finance to complete the administration without much distraction. Conversely, the administration of ERP systems can easily take up a full-time position.

Workflow Apps: helping you delay the leap

QuickBooks and Xero basically provide a company with an automated general ledger (aka ‘GL’). You can then expand this core GL capability through add-ons, like Glean AI.  

As David explains, “Add-ons are easy to tack onto your core GL system. They basically feed your core GL and expand what you’re able to automate in your finance department. The proliferation of these add-ons has allowed companies to stay on QuickBooks and Xero for much longer than in the past. And, interestingly, add-ons can even help a company when it finally does make the leap to a larger ERP system.”

Workflow Apps: helping you transition

Add-ons, like Glean AI, can help make the transition from QuickBooks to NetSuite or Intacct easier.  David explains how:

“If your team is interfacing with a workflow app, for example Glean AI to handle invoice approvals and vendor payments, they never see the system that’s behind it - be it QuickBooks or NetSuite. If a person in Marketing needs to check a vendor invoice, they use Glean AI and that is the interface they know. Any change to the backend is virtually imperceptible. This creates minimal disruption and almost zero requirement for training when it comes time to migrate from QuickBooks to NetSuite.”

Embracing technology in the finance department  

David is a huge proponent of using technology to create value in the finance department. He explains, “There are many successful finance and accounting professionals that don't really embrace IT and workflow apps, but that’s typically because they don’t have to! Their teams are bigger and more expensive – they have the people to do those time-consuming manual tasks.

“My team is lean and nimble and we have to maximize our efficiency. We are early adopters of tools and automation because it’s necessary to meet our goals. Yes, there are risks to being an early adopter, but I like it - there's a ton of value created. With the risk, comes a lot of reward. And it's my style to want to try new things in pursuit of a larger goal.”

To learn more about Glean AI and how it can bring efficiencies to your finance team, contact us at hello@glean.ai to schedule a chat or a demo at your convenience.

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