There is a Xero-Netsuite Gap

Netsuite and Xero are the two undisputed pioneers of cloud accounting but, beyond that, they have little in common.

In 1998 Netsuite was founded in Silicon Valley. Eight years later, 7,000 miles away in Wellington, New Zealand, Xero was born. Netsuite costs thousands, or tens of thousands a year. Xero costs hundreds per year. Netsuite is suited to large, multinational businesses such as Domino's, The North Face and Charlotte Tilbury. Xero is focused on small businesses such as designers, cafes, and farmers.

In their wake a multitude of cloud accounting solutions have followed including start-ups such as Freshbooks and Pennylane, and new products from incumbents such as Quickbooks Online and Sage Accounting. But despite this flood of new products there remains a Xero-Netsuite gap.

The Xero-Netsuite gap exists because it is difficult for accounting vendors to operate in a large number of countries. This means that the only way a multinational business can operate is to tie together local SME solutions (like Xero) or upgrade to a global solution designed for larger businesses (like Netsuite). There isn’t a middle option hence the name, the Xero-Netsuite gap.

The gap exists because only the largest accounting and ERP solutions are truly multinational and effective across a significant number of countries. Although there are mid-market solutions, designed for medium sized companies, they are typically only effective in a single country or a handful of countries. This means that an international business needs to either:

1. Use the local SME solutions, but deal with issues of unifying the data and the workflows.

2. Upgrade to a larger solution (like Netsuite), but incur the higher costs and the need for migration, training, etc.

There isn’t a right answer. Some businesses should do (1), and others should do (2). What has changed in recent years is that more and more businesses are becoming multi-entity and multinational earlier. This means that the number of businesses that are falling into the Xero-Netsuite gap is growing rapidly.

These businesses need help to unify the data and standardise the workflows for all of their entities.

This is what we are building at Translucent. Translucent sits on top of your existing accounting software and turns it into a multi-entity solution.