I initiated Ramp's transition to NetSuite with a small team, after only six months on the job. While the move itself was planned out far in advance, it was a very busy time for our team as we had recently implemented a new payroll processor and gone through our first Big 4 audit. I contemplated delaying the process to 2023 or implementing some temporary fixes, e.g. a parallel close software.
I even created hundreds of new accounts in our old accounting software to better allocate expenses between products and departments, in addition to restating many prior periods (which in retrospect was a silly task). However, after completing our first month-end close with NetSuite, I can breathe easy knowing that all the work was well worth it as it wound up being beneficial for the establishment of a strong financial reporting process.
In our previous article, we explained why we decided to move to NetSuite and how the right implementation partner can make all the difference. This topic is so critical to the health of our org that I recently reached out to our partners to see how they’re advising their clients on a similar move. In this article, I’m highlighting lessons learned from our transition experience here at Ramp, as well as from experts at Countsy and Myers-Holum, who specialize in NetSuite implementation. We’ll cover some of the most common mistakes companies make when moving to NetSuite, what you can do to avoid them, and best practices for setting yourself up for success.
1. Waiting too long to transition
Waiting too long to make the leap can cost you both time and money. Moving to NetSuite earlier than you think can help you for three main reasons:
- You have less data to migrate and you can start creating records in NetSuite earlier.
- You have fewer business processes in place that will need to be altered during a transition.
- If you move at a later stage, after you’ve fully outgrown more basic systems, the implementation will be much larger, more expensive, and take longer to complete.
“If you’re an institutional venture-backed company that’s scaling fast and raising more money, staying on a more lightweight accounting platform can become problematic. The longer you delay moving to NetSuite or an equally sophisticated platform, the more expensive and disruptive it can be,” says Gavin Block, Strategic Growth Lead, Countsy. “We prefer to move our clients to NetSuite on day one, even if they’re not using anywhere near the full functionality.”
2. Taking shortcuts
Shortcuts might seem like an attractive option for completing the implementation by a certain time, but this can mean trouble down the road. Bypassing certain steps can mean that there isn’t a lot of segregation of duties, e.g. everyone on the team has administration access, which is usually a recipe for disaster (users can create/delete any transactions they want) and there are no approvals or review controls which might lead to inaccuracies and errors. These missteps can also create significant challenges when preparing for an audit.
“When companies that have taken shortcuts come to us, one of the biggest things we start with is taking a look under the hood and ensuring that all of the proper settings are in place and turning off features that they’re just not using,” says Colman Edwards, Director of Technology, Countsy.
By implementing carefully in phases—starting with financials, working on additions, completing the AR setup, and processing everything you have—you’ll ensure that nothing is missed along the way.
3. Not using tools with direct integration
If a company isn’t using tools that directly integrate with NetSuite for the switch, they’re setting themselves up for a headache. Using a regular corporate card, sans automation, means that there could be the possibility of going through multiple steps (pulling transactions, building out and coding them in a workbook, and importing them), and subsequently realizing that the memos or proper supports weren’t included . This will then require the user to delete everything and reimport from the start. Using an automated tool with direct integrations, like Ramp, means you’ll reduce the likelihood of errors. Ramp has a direct integration with NetSuite across different offerings such as cards and Bill Pay, and can facilitate controls related to approvals and categorization of expenses.
4. Not establishing internal approval levels
The organization’s leaders, from an internal readiness and change management perspective, need to understand that it’s not just your department that’s going to be affected. It will be departments across the board, e.g. finance, operations, procurement, etc. By simply siloing and focusing on your own department, you’ll potentially create systems that aren’t good for the organization as a whole.
“Understand that there’s a potentially better way of doing things, and approach the transition process with your implementation partner in a systematic way. They can help you see your blind spots and introduce you to best practices that you may not be familiar with,” says Hamza Zia, Director, Solution Architecture, Myers-Holum.
Zia explains his recommendations for establishing org levels to ensure a successful transition:
- Level 1: Steering Committee: Creating a steering committee and meeting monthly can help leadership understand what’s happening with the implementation so they’re fully informed, as opposed to being blindsided via a lack of communication.
- Level 2: Project manager and administrator: It’s also helpful to have a project manager or coordinator one level down who can work with an administrator that you’ve elected internally. This administrator doesn't need to have NetSuite experience or be particularly tech savvy. They just need to understand the current business because, ultimately, they're taking that information, transposing it into NetSuite, and managing the platform in terms of growth.
- Level 3: Business process owners: The business process owners are people within a certain role at the organization. These individuals know their operations best, meaning they can tell the implementation partner about what is needed for a successful implementation and workflow process. Bridging this business process input with NetSuite specific best practices is the gateway to success.
5. Submitting books that aren’t clean
Make sure your books and data are clean and complete before embarking on a transition. Bad data is still bad data, even if you’re moving it from one system to another.
“We’re not going to import really bad accounting records from whatever legacy system they have into NetSuite,” explains Block. “So we end up being the ones who have to do the cleanup prior to the migration, which can amount to a significant cost. Our recommendation is that even just basic bookkeeping is better than nothing.”
You may want to consider giving your implementation partner temporary or read-only access, so they can get a sense of not just the quantity of data, but the quality of the accounting.
If you have an auditor or have been audited in the past, make sure to include your auditor in the process as well, since they will need to verify and test that your data properly migrates to NetSuite. They can also help you create templates and review your books in advance to ensure that the data is accurate and complete.
6. Not understanding your priorities early on
Internal readiness is key for moving to NetSuite. If you’re moving from a platform with less customization options, you’ll find that you have a lot more classifications at your disposal in NetSuite. Take time to look at your current chart of accounts and segmentation structure and work backwards. Decide on what you really need from a reporting standpoint and make sure your data is structured appropriately so you can start out on the right foot.
One area of focus should be your master data import. Zia notes that his team often sees a lot of people from more basic systems solely departmentalizing on the chart of accounts, so they have salaries for G&A, salaries for R&D, for sales and marketing, etc.
“We can take that, shrink their chart of accounts, and allow for a more slice and dice approach by taking redundant information baked into your general ledger and allowing you to segment that out—for example, into different departments outside the general ledger. This data approach with NetSuite will allow for a more flexible growth strategy with your ERP. In addition, this exact same strategy can also go towards your revenue structure as-well.” Zia also states, “Confirm your current business processes around AP, AR, and if you have inventory, make sure you understand your current steps so that that you can mimic them in NetSuite - if you can't, it’s likely for the better, and you should adopt NetSuite best practices! It’s also key to examine additional workflows with your implementation partner that can be set up to automate some of the processes.”
7. Focusing on wants instead of needs
If you’re focusing on what you’d like to have versus what you truly need to have, you’re hindering your implementation’s effectiveness.
“Everyone wants that shiny new Tesla when they walk into the dealership, but it’s crucial to look beyond the bells and whistles and focus on the essentials,” says Zia. “Let’s say you’ve been on your existing systems for 20 years and have carved out bespoke functionality for your org. As you transition to a new system, you have to understand the concept of needs vs wants, meaning you need it to perform your day-to day-operations versus simply wanting it.” The wants can be positioned for a phase two date in the future, so that in phase one you’re going live with the most pertinent components necessary for success. Placing your priorities into buckets and phasing them out can also help you avoid implementation fatigue, and more importantly, meet timelines to realize ROI.
8. Viewing the transition as a headache instead of an opportunity
A transition is your opportunity to extract the data, closely examine it, and ask yourself strategic questions. Do you really want to put this data directly into NetSuite and repeat the same mistakes and shortcuts you made previously? Or is it a worthwhile exercise to take the time to carefully examine the data and work with your implementation partner in identifying the best ways to position and streamline the data?
Instead of reluctantly moving to NetSuite, understand that it offers your team the chance to build out flexible new structures (e.g. GL, vendor, etc) so that whatever happens next, your organization will have the fundamental accounting books and reports needed to support you through troughs and spikes.
By recognizing and avoiding the mistakes above, you’ll prime your finance team for an easy NetSuite transition. Remember to prioritize the most integral components that will contribute to your business’s success, ensure that your books are clean, and most of all, embrace the migration with an open mind.