Top Accounting Software for Australian Businesses Compared: Xero vs NetSuite

Selecting the appropriate accounting software is a critical decision for Australian businesses. The right solution can streamline operations, improve financial accuracy, and provide valuable insights for decision-making. Conversely, an ill-fitting system may lead to inefficiencies and hinder growth.

As businesses evolve, their financial management needs become increasingly complex. From basic bookkeeping to advanced financial analysis, the demands on accounting software have grown significantly. This evolution has led to a diverse market of accounting solutions, each with its own strengths and specialisations.

This article focuses on two popular accounting software options available to Australian businesses:

1. Xero: Known for its user-friendly interface and strong integration capabilities.
2. NetSuite: An enterprise-level solution with comprehensive features for larger businesses.

Core Accounting Capabilities

Xero’s Core Accounting Features

Xero has built a strong reputation for its user-friendly interface and robust core accounting features. At the heart of its offering is a comprehensive invoicing system that allows businesses to create professional-looking invoices, set up recurring invoices, and even automate reminders for overdue payments. 

The bank reconciliation feature in Xero is particularly noteworthy, using machine learning to suggest matches and learn from your choices, making the process increasingly efficient over time. Expense tracking in Xero is straightforward, with the ability to capture receipts via mobile app and automatically categorise expenses. 

Perhaps one of Xero’s strongest features/modules is its payroll solution, which is fully compliant with Australian tax regulations and superannuation requirements, making it an excellent choice for businesses of all sizes in Australia.

NetSuite’s Comprehensive Accounting Suite

As an enterprise-level solution, NetSuite offers the most comprehensive set of core accounting capabilities among the four options. Its financial management tools go beyond basic bookkeeping, offering advanced features like revenue recognition, multi-book accounting, and global financial consolidation.

NetSuite’s invoicing system is highly customisable and can handle complex billing scenarios, including subscription billing and usage-based invoicing. The expense management module in NetSuite is particularly robust, with approval workflows, policy compliance checks, and integration with corporate credit cards. 

One of NetSuite’s standout features is its ability to handle multi-entity accounting, allowing businesses to manage multiple subsidiaries, currencies, and tax regimes within a single system. This makes it an ideal choice for large businesses or those with international operations.

Advanced Accounting Features

Xero’s Extendible Accounting Functionality

Xero’s advanced features extend its utility beyond basic accounting. The project tracking module allows businesses to monitor time and costs associated with specific projects, providing insights into profitability. Inventory management in Xero, while not as sophisticated as some dedicated inventory systems, offers essential features like stock tracking, reorder points, and the ability to track items across multiple locations. 

Multi-currency support is another strong point for Xero, allowing businesses to send invoices and receive payments in different currencies, with automatic exchange rate updates. This does however come with an increased cost, as this functionality is only available on the premium plan. 

Xero’s reporting capabilities are extensive, with a range of standard financial reports and the ability to create custom reports. The customisable dashboard feature allows users to get a quick overview of key financial metrics at a glance, enhancing decision-making capabilities.

NetSuite’s Advanced Accounting Module

NetSuite excels in advanced features, offering a level of sophistication suitable for complex business operations. Its project management module is comprehensive, supporting everything from simple time tracking to complex project accounting and billing. The inventory control features in NetSuite are industry-leading, offering advanced functionalities like demand planning, supply chain management, and warehouse management. Multi-currency and multi-language support in NetSuite is extensive, making it ideal for businesses with global operations. The software’s financial planning and analysis tools are particularly advanced, offering features like rolling forecasts, what-if scenario modelling, and variance analysis. NetSuite also provides sophisticated revenue recognition capabilities, critical for businesses in industries with complex revenue models like software or professional services.

User Experience

Xero’s Intuitive Interface

Xero is widely recognised for its user-friendly interface, which has played a significant role in its rapid adoption, especially among small businesses and startups. The software’s dashboard is clean and customisable, providing a clear overview of key financial metrics at a glance. 

Navigation within Xero is intuitive, with a logical menu structure that makes it easy to find and access different features. The software uses modern design principles, with a consistent look and feel across different sections, reducing the learning curve for new users. Xero’s mobile app is also well-designed, offering a seamless experience for users who need to manage their finances on the go. 

The simplicity of Xero’s interface, however, doesn’t come at the cost of functionality – advanced features are readily accessible but don’t clutter the main interface, striking a good balance between simplicity and power.

NetSuite’s Comprehensive and Configurable Interface

NetSuite’s user interface reflects its position as an enterprise-level solution, offering a high degree of functionality that can sometimes come at the cost of simplicity. The dashboard is highly customisable, allowing users to create role-specific views that display relevant information for different user types. 

Navigation within NetSuite can be complex due to the sheer breadth of features available, but the software offers powerful search and shortcut functionalities to help users quickly find what they need. 

The interface is designed to handle large volumes of data and complex operations, which can make it feel dense compared to simpler solutions. While this complexity can result in a steeper learning curve, it provides the flexibility and power needed by large businesses with complex requirements. NetSuite’s mobile interface, while comprehensive, may require more familiarity with the system to use effectively.

Pricing and Plans

Xero’s Tiered Pricing Structure

Xero offers a straightforward, tiered pricing structure designed to cater to businesses of varying sizes and needs. The company provides three main plans: Starter, Standard, and Premium. The Starter plan, priced at AUD 25 per month, is aimed at very small businesses or sole traders, offering basic features like sending quotes and invoices, entering bills, and reconciling bank transactions. However, it has limitations such as a cap on the number of invoices and bills that can be entered each month. 

The Standard plan, at AUD 50 per month, lifts these restrictions and adds features like bulk reconciliation and short-term cash flow projections. 

The Premium plan, priced at AUD 65 per month, includes all the features of the Standard plan and adds multi-currency support, making it suitable for businesses that deal with international transactions. All plans include payroll for up to 20 employees in Australia, which is a significant advantage for small to medium-sized businesses.

NetSuite’s Custom Pricing Model

NetSuite’s pricing model differs significantly from the other options, reflecting its position as an enterprise-level solution. Rather than offering fixed-price tiers, NetSuite provides custom pricing based on each business’s specific requirements, size, and the modules they need. The base price for NetSuite typically starts around AUD 999 per month for small businesses, but this can increase significantly depending on the number of users, the complexity of the business processes, and the additional modules required. For instance, businesses needing advanced manufacturing capabilities or e-commerce integration will see higher costs. 

NetSuite’s pricing is by default annual in advance, with a recurring subscription cost that is based on modules and user counts. While this pricing model can result in higher costs compared to other solutions, it allows for a highly customised system that can scale with the business. It’s important to note that implementation costs, which can be substantial, are not included in the monthly subscription and need to be factored into the overall cost of adopting NetSuite.

However, as NetSuite is a part of the Oracle family of products, Oracle Financing can allow businesses to combine licence fees and implementation costs, and bundle this into a monthly payment structure over 36 months, lessening the upfront costs. 

Cost-Effectiveness

Xero’s ROI Advantage

Xero offers strong value for money, particularly for small to medium-sized businesses. Its pricing structure is transparent, with a good range of features available even in the lower-tier plans. The inclusion of payroll functionality for up to 20 employees across all plans is a significant advantage, potentially saving businesses the cost of separate payroll software. Xero’s user-friendly interface can also contribute to cost-effectiveness by reducing the time and resources needed for staff training.

The software’s robust API and extensive third-party app integrations allow businesses to create a customised system without the need for expensive bespoke solutions. However, as businesses grow and require more advanced features or have more complex needs, they may find that additional costs for add-ons or upgrades are necessary, which could impact the overall cost-effectiveness for larger enterprises.

NetSuite’s ROI Advantage

NetSuite’s cost-effectiveness is best evaluated in the context of larger businesses or those with complex, multi-entity operations. While the initial costs and ongoing subscription fees are higher than other options, NetSuite can provide significant value for businesses that would otherwise need to integrate multiple software solutions to meet their needs. 

The comprehensive nature of NetSuite, covering everything from core financials to CRM, inventory management, and e-commerce, can lead to cost savings by eliminating the need for separate systems and reducing IT overhead. 

Additionally, NetSuite’s scalability means that businesses can grow without the need to migrate to new systems, potentially saving significant costs and disruption in the long term. However, for smaller businesses or those with simpler needs, the cost and complexity of NetSuite may outweigh its benefits, making it less cost-effective compared to more focused accounting solutions.

Other Costs to Consider

Xero’s Additional Expenses

While Xero’s pricing structure is generally straightforward, there are some potential hidden costs that businesses should be aware of. One of the main areas where additional costs can arise is through add-ons and integrations. 

Xero offers a wide range of features in its base plans, some businesses may find they need additional functionality provided by third-party apps. These apps,while expanding Xero’s capabilities, often come with their own subscription costs. For example, advanced inventory management or sophisticated project tracking may require third-party solutions. Another potential hidden cost is related to data storage. 

Xero also offers unlimited users, there are limits on file storage and transactions. Businesses with high transaction volumes or those needing to store large files may need to upgrade to higher plans or find alternative storage solutions. 

NetSuite’s Additional Cost Factors

As an enterprise-level solution, NetSuite’s pricing model can include several less visible costs that businesses need to consider. One of the most significant is the implementation cost. NetSuite implementations can be complex and almost always require professional services, which can add substantially to the initial investment. 

Customisation is another area where costs can escalate. While NetSuite is highly customisable, complex customisations often require specialised developers, incurring additional expenses. 

Training costs can also be significant due to the complexity of the system. While NetSuite offers training resources, many businesses find they need to invest in comprehensive training programs for their staff. 

Another potential hidden cost is in data migration. Moving data from existing systems to NetSuite can be a complex process that may require professional assistance. 

While NetSuite offers a wide range of features, some industry-specific or advanced functionalities may require additional modules, each with its own licensing costs. Businesses should also be prepared for potential costs associated with annual licence renewals and system upgrades.

3rd Party Integrations and App Marketplace

Xero’s Extensive App Ecosystem

Xero boasts one of the most comprehensive ecosystems of third-party integrations in the accounting software market. This extensive network of partnerships allows businesses to expand Xero’s functionality to meet specific needs across various industries and functions. 

The Xero App Marketplace features hundreds of applications covering areas such as inventory management, point of sale, time tracking, customer relationship management (CRM), and more. For e-commerce businesses, Xero offers robust integrations with major platforms like Shopify, WooCommerce, and Magento, streamlining the process of managing online sales and financial data. 

In the field of customer relationship management, Xero integrates seamlessly with popular CRM tools like Salesforce and HubSpot, allowing for a smooth flow of customer and financial data. For project-based businesses, integrations with project management tools like Trello and Asana can enhance workflow efficiency. 

Xero’s strong presence in the Australian market also means that it offers numerous integrations with local banks and financial institutions, facilitating easy bank feeds and reconciliation processes. This vast array of integrations allows businesses to create a tailored ecosystem of business tools with Xero at its financial core, potentially reducing the need for manual data entry and improving overall operational efficiency.

NetSuite’s Comprehensive Integration Approach

API Availability

Xero’s Developer-Friendly API

Xero provides a robust and well-documented API that has contributed significantly to its popularity among developers and businesses requiring custom integrations. The Xero API is RESTful, making it relatively easy for developers to work with, and it covers a wide range of Xero’s features, allowing for deep integration with external systems. Xero offers comprehensive documentation, including guides, tutorials, and API references, making it easier for developers to get started and troubleshoot issues. 

The API supports OAuth 2.0 for secure authentication, ensuring that integrations maintain a high level of security. One of the strengths of Xero’s API is its consistency and stability; Xero maintains clear versioning and provides ample notice for any significant changes, allowing developers to plan and adapt their integrations accordingly. Xero also offers SDKs (Software Development Kits) for popular programming languages, further simplifying the development process. 

For businesses, this robust API means that custom integrations are readily achievable, allowing for tailored solutions that can significantly enhance operational efficiency. Whether it’s connecting Xero to a custom CRM system, automating data entry from specialised industry software, or creating bespoke reporting tools, Xero’s API provides the flexibility to meet a wide range of business needs.

NetSuite’s Powerful Integration Tools

NetSuite offers a comprehensive suite of integration tools and APIs that reflect its position as an enterprise-level solution. At the core of NetSuite’s integration capabilities is SuiteTalk, a web services integration tool that provides SOAP and REST web services. This allows for deep, bidirectional integration between NetSuite and external systems. NetSuite’s API is extensive, covering virtually all aspects of the system, from financial operations to CRM, inventory management, and beyond. 

This breadth allows for highly sophisticated integrations that can automate complex business processes across multiple departments or entities. In addition to SuiteTalk, NetSuite offers SuiteScript, a JavaScript-based scripting language that allows for customisation and automation within the NetSuite environment. This can be particularly useful for creating custom workflows or business logic that extends NetSuite’s native capabilities. NetSuite also provides SuiteFlow, a point-and-click tool for creating workflows and processes, which can complement API-based integrations. 

The platform’s integration capabilities are further enhanced by SuiteBundler, which allows for the packaging and deployment of customisations and integrations across different NetSuite accounts. While NetSuite’s integration tools are powerful, they can be complex and often require specialised expertise to fully leverage. However, for businesses with complex integration needs, particularly those operating across multiple entities or with sophisticated business processes, NetSuite’s integration capabilities provide the flexibility and power to create highly tailored solutions.

Mobile Access

Xero’s Mobile Functionality

Xero has invested significantly in its mobile offerings, recognising the growing need for on-the-go accounting access. The Xero mobile app, available for both iOS and Android devices, offers a comprehensive suite of features that allow users to manage many aspects of their accounting from their smartphones or tablets. One of the app’s strengths is its ability to capture and process receipts. 

Users can snap photos of receipts, and the app uses OCR (Optical Character Recognition) technology to extract relevant information, streamlining the expense tracking process. The app also allows users to create and send invoices, reconcile transactions, and view key financial reports, providing a good overview of the business’s financial health on the move. Xero’s mobile app integrates seamlessly with the desktop version, ensuring that data is always up-to-date across all devices. 

The app’s user interface is clean and intuitive, maintaining much of the user-friendly design that Xero is known for in its desktop version. For businesses with employees on the go, Xero’s mobile app can be particularly useful for tasks like tracking mileage or submitting expense claims. While the mobile app doesn’t offer every feature available in the desktop version, it provides a well-rounded set of tools that cover most day-to-day accounting needs, making it a strong option for businesses that require robust mobile accounting capabilities.

NetSuite’s Mobile Capabilities

NetSuite’s approach to mobile access reflects its position as an enterprise-level, all-in-one business management solution. NetSuite offers mobile access through a responsive web interface and dedicated mobile apps, providing users with the flexibility to manage various aspects of their business operations on the go. The NetSuite mobile app, available for both iOS and Android devices, is designed to cater to the needs of different roles within an organisation, from executives to sales representatives and warehouse managers.

One of the strengths of NetSuite’s mobile offering is its ability to provide access to a wide range of business functions beyond just accounting. Users can access customer and sales data, manage orders, track inventory, and even handle basic human resources tasks. For finance professionals, the app offers capabilities like expense report submission and approval, basic financial reporting, and the ability to view key performance indicators.

The app’s user interface, while comprehensive, can be more complex compared to solutions aimed at smaller businesses. This reflects the broader scope of NetSuite’s functionality but may require more time for users to become proficient. NetSuite’s mobile solution shines in its ability to handle complex business processes and workflows, making it particularly valuable for larger organisations or those with multi-entity structures.

While NetSuite’s mobile capabilities are robust, they may be overkill for small businesses with simpler needs. However, for larger enterprises or rapidly growing companies that require comprehensive, on-the-go access to their entire business management system, NetSuite’s mobile offerings provide a powerful solution.

Customer Support and Training

Xero’s Support Infrastructure

Xero has developed a comprehensive support system that primarily focuses on online resources and community-based assistance. The company offers 24/7 online support, which includes email and callback options. This approach allows users to get assistance at any time, which can be particularly beneficial for businesses operating outside standard business hours or across different time zones.

One of Xero’s standout features is its extensive online knowledge base, Xero Central. This resource contains a vast array of articles, guides, and video tutorials covering virtually every aspect of the software. The search functionality within Xero Central is robust, making it easy for users to find answers to their questions quickly.

Xero also maintains an active community forum where users can ask questions, share tips, and discuss best practices. This peer-to-peer support can be invaluable, especially for tackling industry-specific challenges or finding creative ways to use the software.

While Xero does not offer phone support, which some users may find limiting, they do provide a callback service where users can schedule a time for a Xero representative to call them. This allows for direct communication while managing support resources efficiently.

For more technical issues, Xero provides email support with generally quick response times. They also offer priority support for accounting and bookkeeping partners, recognising the critical role these professionals play in supporting end-users.

It’s worth noting that while Xero’s support is comprehensive, the lack of immediate phone support may be a drawback for some users, particularly those who prefer more traditional support channels or need immediate assistance with critical issues.

NetSuite’s Enterprise-Level Support

NetSuite’s support offerings reflect its position as an enterprise-level solution, providing comprehensive assistance tailored to the complex needs of larger businesses and organisations.

At the core of NetSuite’s support is its 24/7 phone and email support. This round-the-clock availability is crucial for businesses operating across different time zones or those with critical operations that can’t afford downtime. The support team is typically highly skilled, capable of handling complex issues that can arise in enterprise environments.

NetSuite provides a tiered support model, with different levels of support available depending on the customer’s needs and subscription level. Higher tiers offer features like priority queuing, faster response times, and access to more experienced support personnel. For businesses with mission-critical implementations, NetSuite offers premium support options that include dedicated support engineers and proactive monitoring.

In addition to direct support, NetSuite maintains a comprehensive online knowledge base called SuiteAnswers. This resource contains a vast array of articles, guides, and best practices covering all aspects of the NetSuite system. The depth and breadth of information available in SuiteAnswers can be particularly valuable for in-house IT teams managing NetSuite implementations.

NetSuite also offers a customer success program, where dedicated account managers work with customers to ensure they’re getting the most value from their NetSuite implementation. This can include regular check-ins, strategic advice, and guidance on new features and best practices.

Training Resources

Xero’s Educational Ecosystem

Xero has developed a robust ecosystem of training resources designed to cater to users at all levels, from beginners to advanced accountants and bookkeepers. This comprehensive approach to education reflects Xero’s commitment to user empowerment and its understanding that well-trained users are more likely to utilise the software effectively.

At the heart of Xero’s training resources is Xero Central, an extensive online knowledge base that serves as both a support centre and a learning platform. Xero Central offers a wide range of self-paced learning materials, including step-by-step guides, video tutorials, and webinars. These resources cover everything from basic software navigation to advanced features and industry-specific use cases.

For those seeking more structured learning, Xero offers Xero U, a dedicated e-learning platform. Xero U provides a variety of courses, ranging from introductory lessons for new users to specialised courses for accountants and bookkeepers. Many of these courses are free, making them accessible to all Xero users.

Xero also provides certification programs for accountants and bookkeepers. These programs not only offer in-depth training on Xero’s features but also provide credentials that professionals can use to demonstrate their expertise to clients.

For visual learners, Xero maintains an active YouTube channel with a wealth of video content. These videos include product demonstrations, feature updates, and tips and tricks for getting the most out of the software.

Xero regularly hosts webinars on various topics, allowing users to learn from Xero experts and ask questions in real-time. These webinars often cover new feature releases, best practices, and industry-specific use cases.

One of Xero’s unique offerings is its Xero Lifelong Learning Platform, which provides free courses on fundamental business and financial concepts. This resource goes beyond just software training, offering valuable education for small business owners and entrepreneurs.

While Xero’s training resources are comprehensive, some users may find the lack of in-person training options limiting. However, for most users, the breadth and depth of online resources provide ample opportunity for learning and skill development.

NetSuite’s Comprehensive Training Program

NetSuite offers a comprehensive and multi-faceted training program designed to cater to the complex needs of its enterprise-level users. This robust approach to education reflects NetSuite’s understanding that effective training is crucial for successful implementation and ongoing use of its sophisticated system.

At the core of NetSuite’s training offerings is SuiteTraining, a flexible learning program that offers both online and in-person training options. SuiteTraining provides a wide range of courses covering all aspects of NetSuite, from basic navigation to advanced customisation and development.

For users who prefer self-paced learning, NetSuite offers SuiteAnswers, an extensive online knowledge base. This resource includes detailed documentation, step-by-step guides, and video tutorials covering all aspects of the NetSuite system. The depth and breadth of information available in SuiteAnswers can be particularly valuable for in-house teams managing NetSuite implementations.

NetSuite also provides certification programs for administrators, developers, and ERP consultants. These programs offer in-depth training and provide professionals with credentials to demonstrate their expertise in NetSuite.

NetSuite regularly hosts webinars and virtual events covering various topics, from product updates to industry-specific best practices. These sessions allow users to learn from NetSuite experts and peers in real-time.

NetSuite also offers custom training programs tailored to specific business needs. These programs can be particularly valuable for organisations with unique processes or those requiring role-specific training.

While NetSuite’s training offerings are comprehensive, the complexity of the system means that training can be time-consuming and potentially costly. The most in-depth training options, such as in-person courses and custom programs, come at additional cost, which can be significant for some organisations. However, for businesses leveraging NetSuite’s full capabilities, this investment in training can be crucial for realising the full value of the system.

Community and Forums

Xero’s Vibrant User Community

Xero has fostered a vibrant and active user community, which serves as a valuable resource for users seeking peer support, best practices, and innovative ways to use the software. This community-driven approach to support and knowledge sharing is one of Xero’s strengths, complementing its official support channels and training resources.

The centrepiece of Xero’s community offerings is the Xero Community Forum. This online platform allows users to ask questions, share experiences, and discuss various aspects of using Xero. The forum is well-organised into different topics, making it easy for users to find relevant discussions or start new ones. What sets Xero’s community forum apart is the active participation of Xero staff members, who often contribute to discussions, provide clarifications, and gather user feedback.

The company also hosts an annual Xerocon event, which serves as a large-scale community gathering. This conference brings together users, partners, and Xero staff for learning sessions, networking, and previews of upcoming features. The enthusiasm and engagement at these events are testament to the strong sense of community Xero has cultivated.

While the vibrant community is generally a significant advantage, some users may find the volume of information overwhelming. Additionally, while community-sourced information is often helpful, it’s important for users to verify critical information through official Xero channels.

NetSuite’s Professional Network

NetSuite’s approach to community and forums reflects its position as an enterprise-level solution, catering to a professional user base with complex needs. While perhaps not as broad or publicly visible as some of its small business-focused competitors, NetSuite has cultivated a valuable professional network for its users.

The primary hub for NetSuite’s user community is the NetSuite User Group. This is a professionally-oriented network that brings together NetSuite customers, partners, and developers. The User Group offers forums for discussion, knowledge sharing, and problem-solving. Given the complexity of NetSuite’s offerings, these forums often delve into sophisticated topics, making them a valuable resource for professionals dealing with advanced implementation and customisation scenarios.

NetSuite also organises SuiteWorld, an annual conference that serves as a large-scale gathering for the NetSuite community. This event brings together customers, partners, developers, and NetSuite staff for learning sessions, networking, and previews of upcoming features. It’s a key event for community building and knowledge sharing within the NetSuite ecosystem.

NetSuite’s partner community is another significant aspect of its professional network. This includes implementation partners, developers, and consultants who specialise in NetSuite. The partner community has its own forums and resources, fostering collaboration and knowledge sharing among professionals working with NetSuite.

Scalability and Suitability

Xero’s for Small and Medium Sized Businesses

Xero has positioned itself as a highly scalable accounting solution, capable of serving businesses from sole traders to medium-sized enterprises. This scalability is one of Xero’s key strengths, allowing businesses to start small and grow with the software without needing to migrate to a new system.

For micro-businesses and sole traders, Xero’s Starter plan offers essential features like invoicing, bank reconciliation, and basic reporting. This entry-level offering provides a cost-effective solution for very small operations while still giving access to Xero’s user-friendly interface and core functionality.

As businesses grow, Xero’s Standard and Premium plans offer increased capabilities to match evolving needs. These plans remove limits on invoicing and bills, add features like expense claims and budgeting, and in the case of the Premium plan, include multi-currency support. This tiered approach allows small to medium-sized businesses to access more advanced features as they scale, without overwhelming them with unnecessary complexity at earlier stages.

Xero’s ability to handle multiple users with different permission levels makes it suitable for growing teams. As businesses add staff members or departments, they can easily set up new users and control access to sensitive financial information.

However, while Xero scales well for small to medium-sized businesses, it may reach its limits for larger enterprises or businesses with very complex financial structures. For instance, businesses requiring advanced manufacturing capabilities or intricate multi-entity consolidations might find they need to look at more specialised enterprise resource planning (ERP) solutions.

NetSuite’s Start-Up to Enterprise Scalability

NetSuite, as an enterprise resource planning (ERP) system, offers a level of scalability that sets it apart from the other solutions in this comparison. It’s designed to cater to the needs of businesses ranging from fast-growing small companies to large, multinational enterprises.

For smaller businesses with ambitious growth plans, NetSuite can be an attractive option despite its higher initial complexity and cost. The software’s comprehensive feature set allows these businesses to start with a robust system that can accommodate rapid scaling without the need for disruptive transitions to new software as the company grows.

NetSuite’s strength lies in its ability to handle complex business operations. As businesses grow and their financial processes become more intricate, NetSuite can accommodate needs such as multi-entity consolidations, advanced revenue recognition, complex inventory management, and multi-currency, multi-language, and multi-country operations.

In the Australian context, NetSuite offers features tailored to local requirements, including support for Australian tax regulations and reporting standards. This makes it a viable option for Australian businesses as they scale from medium-sized operations to larger enterprises.

While NetSuite offers unparalleled scalability among the solutions compared here, it’s crucial for businesses to carefully assess their current needs and growth projections. For some organisations, starting with a simpler solution and transitioning to NetSuite when they reach a certain scale might be more appropriate than implementing NetSuite from the outset.

Industry-Specific Solutions

Xero’s Horizontal Approach and App Extensions

Xero, while primarily known for its general-purpose accounting software, has made significant strides in catering to industry-specific needs. This is achieved primarily through its extensive app marketplace and partnerships with industry-specific solution providers.

For the retail sector, Xero integrates with various point-of-sale (POS) systems and inventory management tools. These integrations allow retailers to seamlessly sync sales data, manage stock levels, and track performance across multiple sales channels. While Xero doesn’t offer built-in advanced inventory features, its partnerships with specialised inventory apps make it a viable solution for many retail businesses.

In the professional services industry, Xero shines with its project tracking and time billing features. These built-in capabilities, combined with integrations for more advanced project management tools, make Zero a popular choice among consultants, lawyers, and other service-based businesses. The software’s ability to track billable hours, manage projects, and generate detailed invoices aligns well with the needs of this sector.

For construction and trade businesses, Xero offers features like progress invoicing and integrations with job costing and project management tools. These capabilities help businesses in this sector manage complex projects, track costs, and maintain profitability. Xero’s partnerships with construction-specific apps extend its functionality to cover areas like quote management and on-site time tracking.

In the non-profit sector, Xero provides features for fund accounting and tracking of grants and donations. While these features are not as advanced as some specialised non-profit accounting solutions, they are sufficient for many smaller to medium-sized non-profit organisations. Xero’s reporting capabilities also allow nonprofits to generate the financial reports required for compliance and stakeholder communication.

For e-commerce businesses, Xero offers robust integrations with major platforms like Shopify, WooCommerce, and Magento. These integrations automate the flow of sales data into the accounting system, simplifying reconciliation and financial reporting for online retailers.

In the hospitality industry, Xero partners with various POS and reservation systems to provide tailored solutions for restaurants, cafes, and hotels. These integrations help businesses in this sector manage their unique challenges around inventory, staff scheduling, and customer management.

While Xero doesn’t offer deeply specialised features for every industry out of the box, its approach of providing a solid accounting core that can be extended through industry-specific apps and integrations offers a good balance of generality and specialisation. This strategy allows Xero to cater to a wide range of industries while maintaining the simplicity and ease of use that it’s known for.

However, businesses in highly specialised industries or those with very complex industry-specific requirements may find that Xero, even with its app ecosystem, may not offer the depth of functionality they need. In such cases, more specialised industry-specific solutions might be necessary.

NetSuite’s Industry Aligned SuiteSuccess Editions

NetSuite stands out in this comparison for its comprehensive approach to industry-specific solutions. The company offers a range of industry editions that go beyond simple feature additions, providing deeply tailored functionality for various sectors.

In the manufacturing sector, NetSuite offers a robust solution that covers the entire production process. This includes features for demand planning, production scheduling, quality management, and detailed costing. The system can handle complex manufacturing scenarios including make-to-order, make-to-stock, and engineer-to-order processes. For Australian manufacturers, NetSuite’s solution can be configured to comply with local regulations and reporting requirements.

For wholesale distribution businesses, NetSuite provides advanced inventory management, order management, and supply chain features. The system can handle complex pricing models, multi-location inventory, and demand forecasting. It also offers strong capabilities in areas like warehouse management and procurement, making it suitable for distributors operating at scale.

In the retail sector, NetSuite offers a unified commerce platform that can manage both brick-and-mortar and e-commerce operations. This includes features for POS integration, order management across multiple channels, customer relationship management, and detailed analytics. For Australian retailers, NetSuite can handle local tax requirements and multi-currency transactions for businesses operating internationally.

NetSuite’s solution for professional services organisations includes advanced project management, resource allocation, and time and expense tracking features. It also offers sophisticated billing options including time-based, fixed fee, and milestone billing. This makes it particularly suitable for large consultancies, IT services firms, and other project-based businesses.

For software companies, NetSuite offers specialised functionality for managing software licences, subscriptions, and usage-based billing. It also provides features for managing the software development lifecycle and tracking key metrics specific to the software industry.

In the non-profit sector, NetSuite offers a solution that handles fund accounting, grant management, and donor relationships. It provides the detailed reporting and transparency required by non-profit organisations, helping them demonstrate accountability to stakeholders.

For the energy sector, NetSuite offers features tailored to the unique needs of oil and gas companies, utilities, and renewable energy firms. This includes capabilities for managing complex supply chains, regulatory compliance, and project-based operations.

NetSuite’s industry editions also extend to sectors like telecommunications, financial services, advertising and media, and hospitality. In each case, the software offers deep, industry-specific functionality built on top of NetSuite’s core ERP capabilities.

Who Wins? The Results Are In

Category	Xero	NetSuite
Core Accounting Capabilities	4 out of 5	5 out of 5
Advanced Features	3 out of 5	5 out of 5
User Experience	4 out of 5	4 out of 5
Pricing	4 out of 5	3 out of 5
Cost-Effectiveness and Hidden Costs	3.5 out of 5	4 out of 5
Integration and Compatibility	4 out of 5	4.5 out of 5
Mobile Access	4 out of 5	4 out of 5
Customer Support and Training	4 out of 5	4.5 out of 5
Scalability and Suitability	3.5 out of 5	5 out of 5
Total Score	34 out of 45	39 out of 45

 

After a comprehensive comparison of Xero and NetSuite, it’s clear that each of these accounting software solutions offers unique strengths catering to different business needs and growth stages.

Xero stands out for its user-friendly interface, robust feature set, and extensive third-party integrations. It offers excellent scalability for small to medium-sized businesses and is particularly strong in areas like bank reconciliation and multi-currency support. Its unlimited user model and strong mobile app make it an attractive option for growing businesses. However, very large enterprises or those with highly complex financial structures may eventually outgrow its capabilities.

NetSuite offers the most comprehensive and scalable solution, capable of supporting businesses from fast-growing startups to large multinational corporations. Its modular approach and advanced features in areas like multi-entity management and financial consolidation make it ideal for businesses with complex structures or ambitious growth plans. However, its power and flexibility come with increased complexity and cost, which may be overkill for small businesses with similar needs.