Xero has long been the first choice for many small businesses due to its ease of use, reasonable price point, and efficient basic functionalities.
However Xero is generally designed for small to medium sized businesses, and as these businesses expands, the system often struggles to keep up. Recognising the signs that you are outgrowing Xero is critical to ensure your organisation continues to improve, and isn't held back unnecessarily.
In this article, we will discuss the 10 key signs that you need to upgrade your systems and move away from Xero.
Xero's Lack of System Functionality
1. Slower Performance and Timeouts
A significant red flag is the deterioration of Xero's performance. If generating reports starts taking longer, or if the system frequently times out, it's a clear indicator that the software is struggling to handle increased data volumes.
2. Increased Manual Data Entry
As your business grows, the volume of transactions usually increases. If your team spends a significant amount of time manually entering data into Xero, it's a sign you are outgrowing the software. Manual data entry is not only tedious but prone to errors, affecting the accuracy of financial reports.
3. Limited Real-Time Insights
Real-time financial insights are crucial for quick decision-making. If Xero can't provide adequate reporting for you to make these timely decisions, it's definitely a sign that the system is no longer working for your business needs.
Upgrading to an ERP system would therefore be beneficial, as they can instantly combine data from all departments, and provide real-time reporting that will help aid management decisions. NetSuite ERP provides comprehensive real-time financial insights and reporting capabilities, so you will never be left questioning how your organisation is performing.
4. Over reliance on Add-On Applications
Xero offers a range of add-on applications to enhance its functionality. However, if your business starts depending on numerous add-ons, managing them can become cumbersome and counterproductive, indicating a need for a more integrated solution.
Operational Challenges Signalling Xero's Inadequacy
5. Difficulty Integrating with Other Systems
The need for seamless integration with other business systems (like CRM or ERP) increases with business growth. Difficulty in integrating these systems with Xero signals a need for a more versatile accounting solution.
6. Inefficient Inventory Management
Effective inventory management is critical, especially for retail and manufacturing sectors. Struggles with managing inventory in Xero could indicate that a more advanced system is needed.
7. Lack of advanced features
One significant limitation of Xero is its lack of advanced functionalities that larger or more complex businesses require. This includes sophisticated analytics, comprehensive forecasting tools, and advanced automation capabilities. If your organisation requires advanced features like the ones mentioned above, then it's time to look for a new system.
Business Growth and Xero's Limitations
8. Limited Customisation Options
Every growing business has unique needs. If Xero's customisation options are not keeping pace with these evolving requirements, it's a sign that a more adaptable system is required.
9. Expanding into New Markets
Expansion into new markets often brings unique challenges, including handling multiple currencies and complying with different tax regulations. Xero cannot efficiently support these international business requirements, so if this is something your organisation requires, it's time to consider a more comprehensive accounting solution. NetSuite offers a comprehensive global financial management module called OneWorld, which provides organisations with efficient financial consolidation, multi-currency support, multi-entity operations, inter company transaction support and more.
10. Inadequate Customer Support
With business expansion, the need for robust customer support increases. If Xero's support isn't meeting your growing needs, it's an indication to look for a system with better support options.
Exploring Alternative Solutions
For businesses experiencing the above challenges with Xero, Enterprise Resource Planning (ERP) systems present an attractive alternative. These systems offer a higher level of customisation, robust reporting capabilities, and better support for growing businesses. NetSuite ERP is a top choice for any organisation looking to upgrade their system, with it's advanced features and extensive customisation capabilities. Lets take a look at how NetSuite compares to Xero:
Despite NetSuite being a solid choice for any organisation, there are a number of different ERPs to choose from with varying features and price points. Check out our guide to NetSuite alternatives for a comprehensive analysis of the best ERPs on the market.
Transitioning from Xero to Advanced Solutions
It's important to remember that transitioning to a more advanced system like an ERP is a significant time and financial investment which requires careful planning and consideration. It's crucial to evaluate your business's specific needs, the scalability of the new system, and the support and training it offers.
It's also important that you follow best practices to ensure your implementation runs as smoothly as possible. Our comprehensive implementation guide will give you everything you need to know to ensure a successful system upgrade. Our NetSuite pricing guide will also provide you with a full breakdown of NetSuite licensing and implementation costs.
Case Studies of Successful System Upgrades
Upgrading your small accounting software system might sound like a headache, but it will bring you significant positive returns. Nelson Packaging Company Inc implemented SAP Business One and were able to accurately track and manage their inventory and halve the amount of time it took to gather data for reporting purposes.
A nonprofit organisation in California implemented Microsoft Dynamics 365 to better manage their accounting, fundraising and payroll processes. They were able to triple their productivity and reduce input costs by 68%!
And the multi-national technology organisation Go Pro implemented NetSuite to help manage their growing number of entities and improve their inventory management. They were able to improve their business performance across their global network, and reduce order management response times by more than 16-fold.
These case studies show that upgrading your current system will bring you significant benefits, and will help your business to expand seamlessly.
Final Thoughts
Recognising the signs that you've outgrown Xero is vital for the ongoing success of your business. While Xero is a great tool for small businesses, scaling enterprises might require more robust systems like ERP solutions.
Paying attention to these signs and taking timely action can ensure that your accounting software aligns with your business's growth trajectory.
