When it comes to financial software, businesses that have outgrown spreadsheets or entry-level accounting systems like QuickBooks, as well as those running legacy on-premises systems that no longer fit their needs, have a wealth of options.
Most of the systems being implemented today are cloud-based ERP solutions, and there are a number of software vendors in the marketplace. This article examines two of the cloud ERP systems available, NetSuite and Acumatica, and the key differences between them.
What Is ERP?
Enterprise resource planning (ERP) is centralized software that manages the core processes of a business, including financials and accounting, order management, inventory management, human resources and more.
In a cloud ERP system, the software vendor manages the database, servers and data center infrastructure and customers access the software via the internet. In some cases, vendors run separate ERP instances for each customer, known as hosting. Software as a Service (SaaS) ERP systems are multi-tenant, meaning that the vendor runs one application with customer data separated at the database level, which creates greater economies of scale.
NetSuite vs. Acumatica: An Overview
NetSuite and Acumatica are both cloud-based ERP systems, meaning the software is maintained and updated by the software vendor and accessed by the customer via a web browser. However, Acumatica is based on an on-premises architecture and does offer an on-premises option; more on this in the deployment section below.
Generally speaking, NetSuite is better suited for growing businesses and offers international business, capabilities that Acumatica struggles with, including multi-subsidiary consolidation, multi-currency and multi-language capabilities and compliance with international taxes and regulations. NetSuite also makes building custom reports easier for everyday users who are not developers.
Product Maturity and History
Evan Goldberg, an early Oracle employee who went on to become an entrepreneur and Larry Ellison, the founder of Oracle, co-founded NetSuite in 1998 as a software suite intended to run an entire business. Their strong technical backgrounds helped make NetSuite, along with Salesforce.com, the first cloud-based software companies. NetSuite was the first cloud ERP system on the market.
In 2016, NetSuite was acquired by Oracle for $9.3 billion, and the company is now run as a separate business unit within Oracle. Backed by Oracle, NetSuite was able to more quickly expand its international operations and open new data centers that use the Oracle Cloud Infrastructure.
After 22 years in business, NetSuite now serves more than 24,000 customers in more than 200 countries and territories.
Acumatica was founded in 2008 by John Howell, Serguei Beloussov and Mike Chtchelkonogov, who worked at Parallels and brought six team members over with them. Many of the early leaders had backgrounds with Microsoft’s Solomon ERP system in the software reseller channel. Since 2014, Acumatica’s CEO has been Jon Roskill, who formerly ran Microsoft’s partner program. It was acquired by private equity fund EQT Partners in 2019.
It counts 10,000 customers.
NetSuite vs. Acumatica: Vertical Industries
Processes, workflows and data demands vary greatly by industry. Most ERP software vendors offer industry-specific editions as well as the ability to customize the software to meet the specific needs a business might have.
NetSuite’s core industries include:
- Retail and ecommerce
- Advertising, media and publishing
NetSuite offers an array of versions for what it calls microverticals in areas including apparel, footwear and accessories; restaurants; food and beverage manufacturing; health and beauty; and more.
Acumatica has dedicated industry editions for:
- Field Service
Acumatica has customers in other industries as well and says customers can build out capabilities specific to their industry or business that they may need with Acumatica xRP, a customization platform that runs on Microsoft developer tools.
NetSuite vs. Acumatica
NetSuite and Acumatica have comparable functionality across a number of different modules, however, NetSuite simply offers more. Most importantly, NetSuite is the preferred vendor for fast-growing businesses. NetSuite is built with real-time data entry, while Acumatica uses batch-based entry at the subledger level, which can make reporting difficult. Once a company expands internationally, the differences become starker. Acumatica cannot support multiple languages, multiple currencies and foreign regulatory and tax laws the way that NetSuite can, limiting visibility and creating significant manual work when transacting in other currencies and conducting financial consolidation.
Finally, pricing and history in the market are areas where the two software companies are different. As a result of its long history in cloud ERP, NetSuite also has a much larger customer base and partner channel. Pricing differences between the two vendors can be more complicated than it first appears, but the bottom line is that NetSuite’s is more transparent and better suited for fast growing businesses, while Acumatica can create hidden charges.
How NetSuite Compares to Acumatica
Both NetSuite and Acumatica offer core ERP capabilities across financial, customer, product and services processes. NetSuite generally provides richer functionality and a greater ability to scale with a customer’s growth, while Acumatica tends to appeal to smaller businesses without the need for advanced functionality.
Here’s how NetSuite and Acumatica compare in features and functionality:
Both vendors provide the core financial management capabilities that go into ERP, including general ledger, accounts receivable, accounts payable, cash management, currency management, tax management, deferred revenue accounting, intercompany accounting and intercompany reconciliation, recurring revenue management, billing, fixed assets and payroll management.
NetSuite does offer some core accounting functionality that Acumatica does not. NetSuite allows customers to keep more than one book, referred to as multi-book accounting. Businesses that need to give different accounting treatments to the same business event, either because of industry-specific, country- or region-specific accounting rules, or some combination thereof, can do that in NetSuite and remain in compliance with regulations. Keeping multiple sets of books in parallel allows for easier reporting for compliance. Without multi-book capabilities as part of the ERP software, accountants are forced into error-prone and cumbersome manual processes.
NetSuite also allows customers to customize their general ledger (GL). For many businesses, the general ledger is no longer a static entity. Traditionally, ERP systems provide a hard-coded set of transaction types such as vendor bills, customer invoices and inbound/outbound payments that are rigidly reflected in the general ledger, limiting the business’s ability to see and understand their GL impact.
Customizations related to the GL typically required a third-party IT consulting team to change the core code of the application, which can be costly and create risk. With NetSuite, businesses can: add custom general ledger lines to standard transactions to avoid manual journal entries; create custom transaction types to create new business processes that can impact the general ledger, such as accruals for vendor bills; and create custom general ledger segments that users can tag to demonstrate the impact of transactions and improve flexibility and results from reporting and analytics.
The way the two systems are architected is also a point of differentiation. Acumatica relies heavily on batch processing, which can slow down reporting and analytics. NetSuite’s architecture allows it to easily analyze large numbers of transactions.
NetSuite offers some capabilities Acumatica does not that are particularly important for businesses with international operations or those that hope to expand internationally. NetSuite provides the ability to transact in more than 190 currencies and 27 different languages. In fact, NetSuite has been deployed in more than 200 countries and dependent territories. Acumatica customers need to manually perform currency revaluations in the system and, while there are built in localization and translation tools, they are rudimentary and customers must rely on local partners for the functionality they need.
Similarly, NetSuite provides multi-subsidiary management, allowing a business with multiple subsidiaries and legal entities to manage the entire portfolio of their business within a single instance of NetSuite.
Additionally, because of its lack of multibook accounting mentioned earlier, Acumatica cannot support international businesses that need to comply with the U.S. generally accepted accounting principles (GAAP) and the international financial reporting standards (IFRS).
Both vendors offer CRM capabilities, including sales force automation, integrated marketing, service and support automation and a customer self-service portal.
NetSuite also offers a partner relationship management feature.
Human Resources Management Systems
Acumatica offers payroll functionality as part of its core system but relies on partners for all other human resources management capabilities.
NetSuite, on the other hand offers complete payroll processing, as well as core HR features all built on the core ERP platform. Its SuitePeople HR provides capabilities for HR managers, employee self-service, workforce management, HR reporting and performance management.
Reporting and Analytics
Both vendors offer prebuilt reports, business intelligence and analytics and dashboards.
Both vendors also offer self-service reporting, but Acumatica is limited in the workflow and customization that can be done without users needing to write code.
However, Acumatica’s subledger architecture impacts reporting. Subledgers are a series of transactions grouped by type, such as accounts receivable or accounts payable. Because subledger architectures are designed to pull certain transaction types but leave others out, this creates reporting challenges. The detailed data is ultimately stored at the subledger level and a summary is pushed up to the GL through the batch process. To drill down to access that detailed data from reports, which pull from the GL, requires drilling into the subledger to access data on customers, vendors or projects, and building out more reports. This is significantly more cumbersome than NetSuite’s architecture, which stores all transactions on a single database, meaning everything in the system is updated in real time and there is no need to run batch jobs to update the books. With NetSuite, when a user needs to access information on a customer, they can conduct a global search and access all the information for that customer in a single view. With a subledger architecture, they would need multiple screen tabs and reports to produce a similar result.
The subledger architecture also impacts the close process. With batch processing of the subledger, extra time and effort is required to review of all the transactions and approve them for summary entry to the GL. With NetSuite, the GL is updated in real-time with no need to review transactions. This allows businesses to more easily undertake newer financial strategies like the continuous close.
Both vendors offer project cost tracking, advanced billing and time and expense management, and project management
NetSuite offers a professional services automation (PSA) module, which also includes resource management.
Deployment Options and Infrastructure Considerations
Acumatica and NetSuite are both cloud-based ERP systems. Acumatica offers cloud, on-premises and hybrid options, while NetSuite uses a traditional software as a service (SaaS) multitenant cloud deployment. While some customers may appreciate the control that maintaining software in their own facilities provides, most analysts agree that established SaaS providers have greater security, uptime and performance than a single business can provide on its own. What’s more, customers benefit from the economies of scale and automatic upgrades that carry customizations forward.
Since its acquisition by Oracle, NetSuite has begun moving its platform to 18 Oracle Cloud Infrastructure data centers around the globe. By using Oracle’s Gen 2 Cloud infrastructure, NetSuite is able to offer greater security, availability, scalability and expandability. It also offers a path to the Oracle Autonomous Database and artificial intelligence.
Acumatica is hosted on Amazon Web Services and runs on the Microsoft MySQL Server Database.
Acumatica runs on its xRP Cloud Platform, which also runs REST and SOAP-based web services with support for the .NET framework, Microsoft’s Visual Studio, C# and ASP.net.
No software vendor can provide all the functionality that thousands of individual businesses in myriad industries require. That’s where customization capabilities and the partner ecosystem become key. Partners fill gaps in the core software by either integrating with the software or building out specific department- or industry-focused functionality.
Both NetSuite and Acumatica rely on partners. However, Acumatica does all its business through its partners, while NetSuite sells directly as well. And, given NetSuite’s maturity, it has a much more robust partner ecosystem.
The SuiteApp.com marketplace features more than 570 add-on applications that are either built on the NetSuite platform or tightly integrated.
In addition to SuiteApp partners, or sometimes in conjunction, NetSuite also has a large number of Solution Partners, which provide consulting and implementation services, often by region or industry. NetSuite also offers business process outsourcing (BPO) partnerships for companies that want to outsource accounting, customer service or ecommerce operations.
Acumatica has more than 250 partners on its Acumatica Marketplace.
Unlike many other software vendors, Acumatica works entirely through its value-added reseller partners. While this can be an advantage to partners, which don’t face potential competition from the software vendor’s sales team, it leaves customers without a direct contact to the software vendor itself.
Pricing is another core difference between NetSuite and Acumatica.
NetSuite offers a per user model while Acumatica markets its offering based on the computing resources required and with “unlimited users.” However, the reality is both models are impacted by user counts because, as one might expect, the more users a company has the more computer resources it requires. Typically, fast-growing companies prefer the per-user model because the number of employees that need to access the ERP system doesn’t grow nearly as fast as the number of transactions.
NetSuite’s per user and flat-fee pricing delivers greater transparency, predictability and a declining impact on revenue as a business grows. Acumatica’s pricing model can penalize growth and contain hidden costs.
Both models offer advantages.
Acumatica’s method is often attractive to smaller firms that are just getting started with ERP and companies that may want to give a large number of employees access to the financial system. NetSuite offers similar advantage for smaller firms, but its model is more predictable, with less uncertainty around moving between tiers. Additionally, fast-growing companies often prefer a per-user model because the number of employees is unlikely to grow as fast as the number of transactions.
Implementation and Support Services
Implementation and support are key considerations in any ERP purchasing decision, and this is another area of significant difference between NetSuite and Acumatica.
NetSuite offers implementation and support services through its professional services and support teams, respectively, as well as through partners, which tend to be regional or specialists in specific industries. In either case, customers get 24×7 support from NetSuite support services around the globe.
All of Acumatica’s implementation and support activities are channeled through its partners, a somewhat rare practice in business software. This model offers advantages to its channel partners and spares Acumatica the expense of an in-house professional services team, but customers do not have a direct relationship with the vendor. Because Acumatica does not directly implement its own software, it often has less insight into any problems that might arise with implementations and configurations. NetSuite, on the other hand, has developed a specialized implementation and support methodology, called SuiteSuccess, that is based on its two decades of experience implementing its software and working with more than 24,000 customers in a wide range of industries. SuiteSuccess incorporates best practices garnered from that experience: Industry- and role-based dashboards, workflows and permissions can get a company up and running with an ERP system in as little as 90 days. NetSuite’s partners have also been trained on SuiteSuccess.
Acumatica has developed a similar program, but it is not in widespread use.
Why You Should Choose NetSuite
When it comes to cloud-based ERP, NetSuite and Acumatica are frequently on the short list of applications under consideration. Companies that choose NetSuite over Acumatica often cite reporting, support, the ability of the software to scale with the customer and the best practices garnered from the depth and breadth of its customer base. Companies that choose Acumatica are often looking for an on-premises or hybrid option.