4 Reasons PE Firms Turn To NetSuite

By the team at Elevate2 | 20 Apr 2022
8 min read

If generating value for shareholders is a priority for your private equity firm, you need NetSuite

Private equity (PE) firms are investment management companies that provide financial backing and makes investments in the private equity of start-up or operating companies. They have a vested interest in the success of the portfolio companies under their management, as it is how they generate value for shareholders.

To achieve this, PE firms are not only responsible for managing these portfolio companies, they are also committed to enhancing growth and profitability. PE firms want to see their portfolio thrive, growing from strength to strength.

One of the most common ways PE firms accomplish this goal is to undertake a digital transformation in said portfolio company, and this is very often the first project enforced. PE firms look to establish an IT infrastructure than can support growth, looking for a solution that can scale as the company does.

These portfolio companies are destined for growth in their size and capabilities, should everything go well! As a result, these companies have a particular set of requirements that an ERP software solution must be able to meet.

There is no surprise that NetSuite has become the leading choice of solution for PE firms. It’s true cloud-based ERP software offers various features that meet requirements and business needs of portfolio companies.

Let’s look at just four reasons PE firms continue to turn to NetSuite time and time again.

Scalability and flexibility

A true cloud ERP software like NetSuite has a distinct advantage, particularly compared to on-premise alternatives.

On-premise system require a lot of time, resource and maintenance. Moreover, these systems are not easy to scale with your business. This can be especially detrimental for portfolio companies, which are likely to see rapid business growth due to PE firm investments.

NetSuite offers greater flexibility due to its subscription model, allowing its users to consume service on an as-needed-basis. Portfolio companies will also benefit from no longer worrying about upgrading to another solution as they grow, as NetSuite’s true cloud architecture allows it to scale in line with a business’s growth rates.

PE firms turn time and time again to NetSuite due to its scalable and flexible nature; it is a software that will continue to provide solutions for a changing and rapidly growing company.

Comprehensive financial management

Quite often the portfolio companies PE firms invest in will have historically been managing their financials through basic accounting software, or even Excel! This is not going to be a viable solution as the company grows.

Therefore, PE firms look for a solution that provides them with a complete set of financial capabilities. NetSuite is the world’s leading solution which includes a full set of financial management such as accounting, billing management and financial management – among much more.

You can read more about NetSuite’s modules and complete business management suite here.

Real-time visibility

To make strategic business decisions, based off the complete truth, PE firms and their portfolio companies need a solution that provides the necessary business information in real-time.

NetSuite has built-in real-time dashboards that provides analysis and reporting across all the processes integrated into its cloud software. These can be customised to each user, so depending on who you are in the PE firm or portfolio company the data shown is relevant to you.

This feature empowers portfolio companies with the real-time visibility it needs to identify issues, trends or opportunities as well as providing the details needed to make necessary actions.

Real-time visibility is key to growth, something very important to PE firms and its shareholders – NetSuite gives investors peace of mind that information can be found quickly and in the moment.

In-built compliance

It is very important that portfolio companies adhere to regulatory requirements. To ensure that companies remain operationally compliant, reporting, and monitory software needs to be in place.

NetSuite simplifies compliance with multiple standards across the word, including Generally Accepted Accounting Practices (GAAP). To achieve this, NetSuite comes with the following features:

  • A powerful rule-driven engine that produces financial reporting in accordance with multiple accounting standards, using multi-book accounting capabilities
  • Pre-built tax filing and reporting tools that are country-specific
  • Customisable roles with permissions that support segregation of duties
  • Audit trail visibility into detailed transaction history, reports, and saved searches

NetSuite’s in-built compliance enables PE firms to trust that their investments will not fall afoul of legal liabilities.

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