Xero vs NetSuite - When business growth outpaces your accounting package

Foundations: NetSuite and Xero

Like so many ERP solutions out there, both NetSuite and Xero have robust accounting and financial tracking features that help businesses manage their money efficiently. So as high-performing tools that make running your business a bit easier, it’s little wonder that both are highly regarded and highly popular among their users.

Xero is renowned as one of the most beautiful and intuitive accounting software solutions available, making it easy for small- to medium-sized businesses who need seamless bank reconciliation, real-time cashflow tracking, and user-friendly invoicing. And thanks to its sleek design, ease of use, and affordability, it’s often a favourite with its users – particularly start-ups, smaller operations, and organisations with relatively simple operational needs.

For those businesses reaching the next level, NetSuite is there to meet their needs. A robust enterprise resource planning system designed for businesses ready to scale, NetSuite provides an all-in-one design, adding in more features to help growing businesses to tackle things like CRM, inventory, and supply chain functions alongside meeting their financial needs. Additionally, you will never outgrow the number of transactions and volumes that your business needs to process as you grow. That’s why NetSuite is so popular with fast-growing businesses that want function, flexibility and speed – especially as they scale across borders or into intricate workflows.

Comparison matrix between NetSuite and Xero

Grading system:

✓ = Native and solid capabilities

* = Capabilities need add-on or partner integration

× = Weak or no functionality

Source

So how do NetSuite and Xero compare?

Xero is ideal for those wanting simplicity with ease when it comes to their basic accounting and bookkeeping needs. Need an end-of-month report or financial year analysis? Xero has you covered.

Great for start-ups and powerful enough for SMBs to keep things running, there’s no question that Xero is highly respected and admired.

However, that’s also where Xero’s capabilities also run out. Xero is optimised for single-entity simplicity while NetSuite’s native multi-subsidiary consolidation is built-in.

So while Xero excels in simplicity and ease of use, when it comes to power and advanced functions like consolidation and multi-currency transactions, ERP users look to the likes of NetSuite as a total business operations solution.

Let’s turn the microscope towards the features and underlying benefits of some key functions offered by Xero and NetSuite and see how they stack up.

Billing

It’s the cornerstone of any business and a must-have for any financial tool. After all, billing means you’re going to get paid – so the easier it is and the faster it can happen, the sooner your account is looking good.

The good news is that both Xero and NetSuite have robust billing features. Xero boasts templatable online invoicing, a variety of payment options, easy mobile access through the dedicated app, and some basic expense and project tracking features. It’s a great start.

NetSuite adds transparency to features like consolidated invoicing, automatic rating processes, and support for multiple pricing modules to capture set-up fees, licenses, and variable consumption in one step. Let’s not stop there. How about subscription billing (including customer-specific pricing), the ability to handle billing for multiple subsidiaries and locations, advanced reporting including customised dashboards, and complete integration with CRM, inventory management, and other business processes that Xero unfortunately doesn’t support.

Revenue recognition

One highly sought-after feature for businesses is revenue recognition: the accounting principle that allows a business to determine when they can record sales as revenue in their financial statements, ultimately to best reflect financial performance.

This is particularly important for services and software companies who handle multiple deliverables that their accountants need to recognise and defer revenue.

Unfortunately, Xero does not have this feature built in, and requires third-party applications or workarounds to achieve, costing productivity and time for businesses that would be better invested in delivery.

NetSuite, meanwhile, loads up this feature automatically – across sales transactions that are single actions, a series of actions over time, or a variety of types of deliverables packaged together. Plus, forecasts and financial statements are accurate, precise, updated in real time, and, thanks to NetSuite’s cloud-native design, able to be viewed by anyone (with access) anywhere, any time.

General ledger

If you want your accounting data clearly displayed from a consolidated level down to individual transactions, then your general ledger (GL) is your best friend.

Xero’s GL is straightforward, so it’s great for small businesses and solopreneurs wanting clear oversight, some limited customisation options, and basic reporting capabilities like profit and loss, balance sheets, and cash flow.

Again, this makes Xero ideal for those who want a simple solution to suit their SMB. For instance, the chart of accounts in Xero is static, and doesn’t support sub-accounts. Customisation is definitely possible, but generally means exporting your data to spreadsheets for detailed analysis.

The question is one of power: What kind of insights do you want to get from your data, and what will it take to get there?

NetSuite includes advanced financial management reports, budgeting and forecasts – something critical for growing your business and supporting long-term plans. It’s highly flexible and customisable, supporting multiple books, currencies and tax structures, with an advanced structure that supports real-time consolidated reporting.

And let’s not forget that NetSuite is more than a financial reporting tool: it’s a total ERP solution, with modules across inventory management, ecommerce and retailing among others – so it’s designed to ensure seamless data flow across your organisation.

Accounts receivable & accounts payable automation

Xero really is making it easy for SMBs. With features like capturing invoices via email or scanning paper invoices using your smartphone, approval workflows for invoice approval, scheduled, manual and batch payment processing, and standard accounting reports, it’s an incredible tool – especially when you’ve got a small team trying to do everything. Its strength of simplicity is also its weakness in some ways: Xero doesn’t provide for accounting controls or policies to be applied to accounts payable, and it has limited user roles.

Across accounts receivable, it’s a similar picture: features like invoice reminders, statements, and aging reports; manual follow-up on overdue invoices; limited customisation, and the need for third-party applications for advanced features.

NetSuite takes the strengths of Xero to the next level, with more sophisticated approval workflows (including role- and user-based permission), automatic discounts and exceptions (for your special suppliers), consolidated reporting and customised dashboards, and the scalability to grow alongside your business. If you want real-time visibility into accounts receivable data – including customer aging, invoice analyses, recurring invoices, deferred revenue, and exception reports – then NetSuite is the obvious next step.

Fixed asset and lease management

Xero provides a very straightforward system when it comes to fixed asset management that allows you to track the purchase, depreciation (or appreciation – if only!), and disposal of fixed assets with ease based on automated schedules and basic reporting capabilities. So when you need to maintain accurate records of capital assets, Xero has you covered.

However, the issue of scalability quickly hinders future growth. Businesses with relatively simple needs will find Xero works well, but if you’ve got growing or complex needs, the platform is likely to start costing you time, resources, and headaches. That’s when you know it’s time to look further afield.

NetSuite’s platform allows for detailed tracking of assets across their complete lifecycle, and supports lease management features including the ability to set up amortisation schedules and split interest expenses from rental expenses, which is great for reporting. And where would we be without extensive customisation options and integration with other business features and tools so that you can maintain comprehensive and accurate records across your business.

Inventory management

Do you know what you have in your warehouse, in workers’ vehicles, and what needs to be earmarked for the next jobs? Inventory management is key to being able to deliver on your promise to your customers.

With basic inventory tracking, Xero allows businesses to monitor stock levels in real time, and streamline invoicing by adding inventory items directly to invoices and purchase orders. And with simple reporting capabilities, Xero also offers good insights to sales trends, quantities, value, and profitability.

However, if you need warehouse management or multi-location inventory tracking, you’ll need to invest in third-party apps to get more out of Xero. So once again, Xero’s inventory management solution is designed with small businesses in mind, who need a single location set-up and some basic insights.

NetSuite, on the other hand, provides real-time visibility into inventory levels, orders, and sales throughout the entire inventory lifecycle. It includes advanced features such as warehouse management, integrated barcoding, and automated processes for inventory counts, picking, packing, and shipping. But wait, there’s more! Multi-location and multi-subsidiary management comes included, so you can maximise sales, reduce manual tasks, and make better data-driven decisions.

If your heart is set on scale, then NetSuite is where you need to be.

And more and more…

There’s plenty more to compare with Xero and NetSuite. NetSuite offers a comprehensive range of reporting tools, allowing users to view specific types of GL accounts, transaction fields, and even custom field values as they are recorded on transactions. How about drill-down and drill-across capabilities for detailed analysis of any record, and automation tools to simplify operation?

If you’re thinking about flexible and dynamic reporting tools, and linking the different aspects of your business for streamlined operations and less overhandling of your data, then think NetSuite.

When it comes down to scalability, customisation, and integration, NetSuite comes out on top. So if growth is part of your business’s goals, then NetSuite should be on your mind.

The right time to move

Moving on from a basic tool to a comprehensive ERP is no small task, and usually signals that your ambition has grown beyond your current capabilities. So if you’re finding yourself bottlenecked by your current reporting capabilities, revenue recognition, or various patchwork solutions used to run your business, then it’s time to change.

Xero is a great solution with a lot of strengths, especially for SMBs looking for simplicity and ease. But NetSuite provides the scalability and depth required to support ambitious growth. Making the transition at the right time ensures your business remains efficient, compliant, and primed for ongoing success.

That’s because NetSuite isn’t just a financial tool. It’s a total ERP with comprehensive capabilities including a robust CRM, inventory management, and supply chain functions. While Xero excels in simplicity and ease of use, NetSuite provides the scalability and depth required for more complex and expanding business operations. Just check out what many satisfied Fusion5 NetSuite customers have to say about their journey with us.

But no two businesses are the same. That’s why having the right ERP implementation partner on your side ensures that you’re getting the right solution and implementing it well.

Fusion5’s expertise and commitment to ERP excellence means we’re to help you find the right solution for your needs and implement it faster. That means an empowered team, and better results.

Where to next? 

If you think that NetSuite may be the right fit, then let’s test that. We encourage choice, and our Fusion5 NetSuite team will work with you to find the best solution for your business.  

Arrange a time for our expert team to give you an obligation-free, real-time demonstration of the NetSuite solution so that you may see it in action. You will quickly discover if NetSuite is the right fit for you and your business – and if not, we’ll see what else might be right for you.