The Briefing: How to make the inevitable transition from QuickBooks to NetSuite

Editor’s note: The Briefing is our series highlighting strategic projects and insights from experienced finance pros. Follow us on LinkedIn or Twitter to get alerts for new briefings.

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As Ramp continues its rapid growth trajectory, our accounting needs have become larger and more complex. We’ve been using QuickBooks Online as our ERP (Enterprise Resource Planning) for managing our internal accounting and bookkeeping. It became abundantly clear that it was time to migrate to a new solution. Many companies find themselves undergoing a similar migration, so I thought I’d share our process so far.    

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Why we decided to transition away from QuickBooks

QuickBooks is designed for small and medium-sized businesses. There are different versions of QuickBooks but the most popular one is QuickBooks Online, which offers simple cloud-based accounting software. It is easy to get started in QuickBooks, especially if you have no accounting or financial reporting background, and setting up entities and reports can be done within minutes. However, the limitations with QuickBooks become evident with growth. Ramp was no exception. We needed a new solution with the ability to grow and scale with us at the enterprise level. 

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For example, we had to set up a special purpose vehicle (SPV) entity as the result of our financing agreement with Goldman Sachs. With this new entity and many additional ones, we are required to prepare monthly consolidated financial statements. With QuickBooks, we had to prepare separate reporting and manually consolidate the entities in Excel to have a full view of Ramp's financial activities. This manual consolidation process added many hours to our close process. 

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There are also no “Post and Create” controls for journal entries in QuickBooks. “Post and Create” is one of the sine qua non controls in financial reporting, and we needed these types of controls for our audited financial statements.

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In addition to better audit controls for our accounting processes, we also needed approval flows to become SOX compliant and integrations with other tools in our growing tech stack.  

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How we selected NetSuite

For Ramp, the process of choosing a new ERP started in October 2021. We worked across our product, engineering, IT, and security teams to create the following selection criteria: 

• Consolidate existing and future entities automatically, including foreign entities with different functional currencies.
• Automate as many manual processes as possible, including bank feeds, bank reconciliations, prepaid and fixed assets entries, deferred journal entries, etc.
• Integrate fully with current and future solutions used at Ramp e.g. Okta, Salesforce, Paylocity, FP&A software, banking systems, etc. 
• Promote strong and customizable audit controls for accounting processes and support year-end audits. 
• Create reports and KPIs with ease, leading to a user-friendly interface. 
• Support our long-term goal of daily close with a large volume of transactions.
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We also considered the average cost of the solution per employee/per month, based on estimated quotes received, as well as implementation costs.

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After many weeks of discussions, demos, and literature review, we selected NetSuite as our new ERP provider and began the transition in March. Sixty percent of our customers that are the same size as us are also on NetSuite or are currently making the transition over, so we knew that we were in good company.  

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From multiple entity support to stronger integrations, automation, and reporting capabilities (such as KPI and FP&A reporting), we felt confident that NetSuite could scale with our business. Many vendors, software, and systems integrate with NetSuite and can meet our needs for stronger purchasing controls, tax processes and compliance.

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Thanks to Ramp’s integration with NetSuite, our cash disbursement process flawlessly integrates with the ERP, meaning the only tasks that are left are to tailor our financial reporting functions, month-end and annual close processes, and controls. We’ll have the ability to run a new consolidated financial statement with just the push of a button, which will greatly speed up our manual close. And best of all, our auditors will be more confident in our processes and able to test any new controls that we implement for eventual liquidity events.

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The importance of working with the right implementation partner

Throughout the process of assessing and selecting our ERP partner, we also interviewed and assessed different implementation partners. Our accounting team is small and we wanted to make sure that we had access to experts that could help us drive the process to ensure a successful implementation. I have heard of—and experienced—horror stories involving companies spending thousands to buy an ERP but unable to properly use it due to a lack of care, expertise, and training. I am fully aware that as a CPA and ex-auditor, I am better with debit/credit financial reporting than with systems implementation. 

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We met with five implementation partners with experience serving different industries and companies at various sizes and selected Myers-Holum. They were recommended by NetSuite for their flexibility, domain knowledge, professionalism, and experience integrating with payment processors and other fintechs.

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As our implementation partner, Myers-Holum is responsible for understanding our needs and desires, gathering all information needed through discussions and walkthroughs, compiling and uploading our data, building the different functionalities needed to test and make corrective actions, working with us to create all the controls and functions we need and, most importantly, training our team.  

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We started the process with them in March and have just completed the data gathering phase. We’re breaking down the implementation into two phases: 

• Phase 1: Build out financial reporting controls.
• Phase 2: Build out supporting controls for functions like commissions, vendor management, and fixed assets. 
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Create a detailed project plan to facilitate implementation

Besides choosing the right software and the right partner, having the right project plan is also important to the success of your ERP implementation. Our plan included the following elements: 

• Obtaining full executive support: Make sure leaders understand why this project is critical to the company and who needs to be involved.  
• Setting realistic timeline and expectations: This project will require your full attention. Give yourself 6 months for implementation. We started the work after we completed our annual close and towards the end of our audit 
• Building the right team: Our accounting manager is leading the implementation in close collaboration with our product and engineering teams. Our negotiation and legal teams helped us secure the best terms and protection for the contract. Our IT and security team reviewed the controls reports, NetSuite accesses, and change management controls. Lastly, our partnerships team assisted with the initial meetings with NetSuite and the implementation companies we considered.  
• Creating a budget: You’ll want to account for the annual subscription expense and the one-time cost of implementation in your budget. Monitor your time budget with your implementation partner. 
• Setting up regular updates to monitor the implementation: Set up weekly calls with your implementation partner to discuss the budget, plan, and emerging issues. Provide regular updates to your execs. Regroup after each phase to see if you need to make any corrective actions. 

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We’re aiming for a go-live date of August 1, 2022 so we can use NetSuite for our 2022 close. Consequently, for our financial year, the auditors will need to test transactions from January 2022 to July 2022 in QuickBooks and from August 2022 to December 2022 in NetSuite. For our historical and comparable financial reporting needs, we will upload all the previous monthly trial balances from March 2019 up to July 2022 to NetSuite.  

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When you should consider making a similar move

You’ll want to consider a new ERP to strengthen your financial reporting and consolidation controls once you move to a Big Four auditor or start considering an exit strategy. We are still at the beginning of our process and are excited about this journey with NetSuite and Myers-Holum. Stay tuned as I will continue to share our journey and lessons learned at the end of the implementation.

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