For many small to medium-sized businesses, a tipping point arrives. Your growth accelerates, your transaction volume spikes, and your entry-level accounting software suddenly feels like a constraint rather than a tool. Moving to an Enterprise Resource Planning (ERP) system like NetSuite is often the logical next step for scalable growth.
However, moving to a robust platform is not a magic fix for messy financial data. In fact, migrating to an advanced system like NetSuite without preparation can amplify existing problems.
To ensure your investment empowers your financial future rather than complicating it, you must have specific financial processes in place before implementation begins. Here are the minimum requirements your business needs to establish for a successful transition.
Standardize Your Chart of Accounts
The backbone of your financial structure is your Chart of Accounts (COA). In smaller systems, it is common for the COA to grow organically—and chaotically—over time. You might have duplicate accounts, vague categories like "Ask My Accountant," or inconsistent numbering.
NetSuite relies on a structured, logical COA to deliver accurate insights. Before you migrate, you must:
- Eliminate Redundancy: Merge duplicate accounts and remove those that are no longer in use.
- Structure for Segmentation: Ensure your accounts align with how you want to track revenue and expenses (e.g., by department, location, or class).
- Consistent Numbering: Adopt a standard numbering system to ensure data flows correctly into reports.
Clean data is critical. If you migrate a messy COA, you will struggle to get the strategic insights you need to make informed decisions.
Ensure Up-to-Date Reconciliations
Migrating historical data is one of the most delicate parts of moving to NetSuite. If your current books are not balanced, you are essentially moving "garbage in" to your new system.
Before the migration team arrives, your team must ensure that all balance sheet accounts are fully reconciled. This includes:
- Bank and Credit Card Accounts: Verify that all transactions match your bank statements up to the most recent month-end.
- Sub-Ledgers: Ensure your Accounts Receivable (AR) and Accounts Payable (AP) aging reports match your General Ledger.
- Prepaid and Accrued Expenses: Validate that these schedules are accurate and support the balances on your balance sheet.
A discrepancy of even a few dollars can cause significant delays during implementation. Accurate reporting starts with reconciled, trustworthy data.
Define Clear AR and AP Workflows
Entry-level software often allows for loose processes. You might pay a vendor bill without a purchase order or create an invoice without a strictly defined approval process. NetSuite is designed to enforce control and compliance, meaning it requires defined rules to function correctly.
You need to document your workflows before configuring the system. Ask yourself:
- Approval Hierarchies: Who needs to approve a bill before it gets paid? Does this change based on the dollar amount?
- Order-to-Cash: What are the specific steps from receiving a customer order to collecting payment?
- Procure-to-Pay: How do you handle vendor selection, purchase orders, and bill payments?
By defining these workflows now, you ensure seamless integration with NetSuite’s automation capabilities. This allows you to reduce the manual workload for business owners and maintain high accuracy.
Establish Your Reporting Requirements
One of the primary triggers for moving to NetSuite is the desire for better reporting. However, the system cannot guess what metrics matter to you. You must define your "must-have" reports before the implementation starts.
Identify the Key Performance Indicators (KPIs) and financial reports you review monthly. Do you need profitability by project? Revenue by region? Consolidated reports for multiple entities?
If you clarify these needs upfront, your implementation partner can configure the dashboard to provide strategic insights from day one. This proactive approach ensures you can focus on core business activities immediately after the switch, rather than spending months tweaking reports.
Conclusion
Moving to NetSuite is a strategic move that can unlock potential and drive sustainable growth. However, the success of the implementation depends heavily on the quality of your current financial processes.
By standardizing your accounts, reconciling your data, and defining your workflows now, you pave the way for a seamless integration.
If your current financial department is overwhelmed by the day-to-day and lacks the bandwidth to prepare for this transition, it may be time to look for a partner. Strengthening your financial backbone today ensures you are ready for the opportunities of tomorrow.
