If you’ve ever been shopping for a car online and called a dealer to get a price, you’ve likely been faced with an annoying response telling you to come in to the dealership to discuss the price.
And if you’ve tried to figure out the price for a complex piece of software, like the cost of Netsuite, you’ve probably found little help on the internet, and a requirement to schedule a demo to get any useful information.
While in the case of a car dealership, they may know the actual asking price of the car, but they just want you to come in so that they can more easily convince you to buy.
In the case of an ERP, however, while they obviously want to get a sales person to start selling you, there can be quite a huge variance in how much the final delivered software suite costs since there’s so many different modules that come along with it.
That being said, you’re probably here because you just want a rough idea and don’t want to have to go through a whole demo to get it. So a rough idea is what I’m going to try and give you.
Now if you’re a very large company, and/or you’re coming off another ERP, it’s a lot harder to estimate your costs. Especially because you probably want to transition all functions from the old ERP to the new one, and not have 2 separate ERP’s running simultaneously long-term. In that case you’ve got a large number of modules that’s difficult to accurately estimate.
So I’ll be focusing more on smaller companies or first time ERP buyers. That’s because if you’re not currently running a sophisticated ERP, you’re probably working off a hodge podge of hopefully somewhat connected systems that you acquired over time as your business grew, with a bunch of the gaps filled with manual work and Excel.
That means that you can start off implementing Netsuite with a few base modules, which will give you tons of value, while still running everything else the old way. And then you can continue adding modules as it makes sense.
How Much Does Netsuite Cost
Most small businesses can expect to pay at least $25,000 to $30,000 per year. Of course Netsuite’s pricing is tailored to the customer, meaning it can vary substantially. But that gives you a rough idea of what you’re looking at.
Broadly speaking your costs are going to vary with the modules you implement, the number of people you have accessing the system, the level of support you want, and how well you can negotiate.
Like many ERPs Netsuite is a modular system where you can purchase additional functions that integrate with the rest of the system.
The benefit of this is that you can often enjoy lower pricing as you don’t need to purchase components you don’t want. And you can also add components over time as you grow so that you only add a certain component once the ROI of having it under Netsuite is actually there.
While Netsuite comes in “Editions” like Retailer and Manufacturing, they’re really just pre-built packages of modules. Broadly speaking you’ll probably start with 3 modules at a minimum.
The financial module of Netsuite is essentially mandatory. The point of any ERP is to integrate all the various business processes together, and to do so without them all talking to the financial module would be incredibly inefficient.
The financial module of Netsuite is extremely well built, as it’s essentially the core for the entire system. So if you’re going to implement Netsuite, make sure you implement this module well (don’t just recreate what you had in Quickbooks), and make sure you have the accounting competency on staff to take full advantage of how powerful a system it is.
That being said, while Netsuite’s financial module is an accountant’s dream compared to some of the more user-friendly accounting softwares meant for non-accountants. It’s probably not worth implementing Netsuite just for this module.
As an ERP, the value comes from integrating everything together, and while it’s financial module is fantastic, you’re probably overpaying if you’re not taking advantage of the integrations.
This module will give you the ability to take care of your accounting, obviously, as well as invoicing and A/R, and issuing POs and handling A/P. You’ll also be able to do some decent budgeting with what’s included.
Most base packages Netsuite offers will include the CRM as well.
This module allows you to track information about your customers and communications with them. As well as create a funnel to track where prospects are in terms of becoming customers. It also adds additional functionality around creating quotes and order management.
There are also features included around customer support and marketing automation, but in my humble opinion, the quality of these components isn’t the greatest, and I much prefer using the more common tools out there like the Zendesk’s and MailChimp’s of the world.
If you have a small number of large customers, it may be worth porting over all your CRM activities to Netsuite so that you can better track the interactions with the customers to their purchasing activities.
But if you do a significant amount of emailing and customer support, especially if you’re an e-commerce brand for example, you might be better off keeping some of that activity outside Netsuite.
All that to say, that like above, if you’re not planning on taking advantage of the CRM, then the financials alone probably won’t make it a worthwhile endeavor.
A Third Module
So the theme so far is that while Netsuite is great, Financials and CRM alone probably won’t make it worth your while, which is why you need to bring in a 3rd business function so that you’re actually integrating data the way an ERP is meant to.
What that module is will naturally depend on your business, but I’ll focus on one example that probably applies to many of you – Inventory.
There can be a little bit of variability here depending on if you manufacture inventory or are a reseller who focuses on warehousing, but the main value of this module is that it provides excellent tracking of inventory.
For an inventory based business having up to date and reliable information around inventory quantities and costing is essential to making good business decisions, and avoiding business interruptions. And Netsuite by and large does an excellent job of this
Now like I mentioned, Netsuite is modular, and the price of each module varies. That being said, if you’re looking at an implementation including Financials, CRM, and something else, it’ll probably run you at least $15,000, with a rough minimum of $5,000 more for each additional module. But naturally that can vary with the complexity of the module added on.
As with most SAAS solutions, you’ll also have a component of pricing that’s linked to the number of people accessing the system. The list price for each general user is $99/month.
While that may not seem too bad, it can run up the bill very quickly if you’re thinking of getting everyone at the company on to Netsuite.
Fortunately, that’s usually not necessary, and will depend on the modules you intend to implement.
You’ll likely need a license for each person in the Accounting function, and for at least some of those in management. Beyond that though it’ll depend on your workflows and who in your company is responsible for what activities.
Netsuite offers many support tiers that will vary in terms of what hours support will be accessible to you, what methods of communication you can use, and if you’ll have a dedicated support agent, amongst other things.
You can avoid needing support for a lot of issues if you have a competent Netsuite administrator, and so many entities can get by with one of the lower tiers of support.
You can expect this to cost around $7,000 a year.
As with most big ticket items, there’s always room for negotiation on the price. You can try to knock down the cost of things you’re buying, and have extras thrown in free of charge.
Most of the pricing I’ve mentioned to this point is assuming a reasonable discount was negotiated, except for the licenses which I mentioned at list price – although the negotiated discount would apply to that too.
I won’t get into negotiation techniques here, but suffice it to say that you can get freebies thrown in since they often don’t have a significant actual cost to Netsuite, and if you are looking to purchase close to their financial period end (month, quarter, and especially annual), you can get significantly better discounts.
All in all, a discount of 20-30% off list price is quite achievable, and I’ve seen even better than that done too.
Now everything up until this point has been discussing recurring costs for access to the implemented ERP, but there’s also a cost to get that ERP set up.
How Much Does Netsuite Implementation Cost
If we’re to assume you go with a relatively simple implementation with 3 modules like I detailed above, done by Netsuite, you can expect to pay at least $35,000 – $40,000. Also, you likely won’t be able to negotiate as steep a discount as for the recurring service, since the implementation has actual labor hours cost that has to be covered.
As you can imagine the cost will vary based on how complex an implementation you have, and whether you choose to have it implemented by Netsuite or by a Value Added Reseller.
All in all, while it can certainly be worth it, Netsuite does come with a decent price tag. And to make sure you’re getting the most value you may want to consider starting your implementation with just a few modules and making sure that you’re taking full advantage of them – which is where a business accountant with Netsuite experience can come in handy.
From there you can take advantage of Netsuite’s modular nature to add on additional pieces as your business grows into them, until you’re so successful that you’ll forget why you ever had to read this post to begin with.