In private equity investing, a successful exit often depends on the portfolio company’s ability to streamline and improve efficiency. Financial management is a key driver of a portfolio company’s valuation and the overall success of the investment for the fund. But investing in less mature companies often means working with a set of disparate and inefficient tools to manage and report on financial data.  

NetSuite, a cloud-based enterprise software company, offers a solution to the inconsistent and outdated portfolio monitoring that many firms struggle with.  

According to a survey by Cobalt, a portfolio management software company, found that nearly 60% of PortCos rely on email and spreadsheets for data collection and reporting. Tools like NetSuite offer real-time insights, allowing fund and PortCo leaders to focus more on operational priorities and less on data management.  

Here are the top three ways NetSuite can drive finance transformation across a firm’s portfolio.  

Enhanced Scalability and Management Reporting

NetSuite delivers real-time financial data, providing visibility into the financial health and performance of PortCos. This enables operating partners and deal team members to make informed decisions quickly by reacting to market changes and internal performance metrics with agility.

NetSuite’s management reporting goes far beyond the limited capabilities of tools like QuickBooks, offering traditional accounting capabilities, project management and costing functions, along with comprehensive cash management and reporting tools. As companies grow and scale, leveling up to a tool that can quickly show the management team a picture of financial health is essential. NetSuite is designed to manage complex financial transactions that less mature tools struggle with, and an ability to automate complex financial processes like multi-currency transactions, intercompany eliminations and intricate revenue recognition.  

NetSuite streamlines the financial close process by reducing the time and effort needed to finalize financial statements. Its period close checklist guides accounting and finance teams through a structured process that adheres to common standards like GAAP and IFRS, while maintaining detailed audit trails for both domestic and international regulatory compliance. This creates a controlled, transparent close process, allowing users to focus on strategic initiatives instead of routine tasks. 

Quick Add-on Integrations for Higher ROI

NetSuite drives finance transformation with its flexible architecture and seamless integration of new add-ons. This adaptability allows PE firms to scale operations as their PortCos hit new stages of growth.

By consolidating financial management into a single, integrated platform, NetSuite offers significant cost-saving opportunities. Using its integrated reporting tools, rather than relying on series of disparate tools and platforms like Excel, Salesforce, Concur and Blackline, for example, improves workflow efficiency and enables users to generate actionable business insights quickly and accurately without the need for multiple tools and systems.

According to a report by Heap, a digital insights platform, data-mature organizations are 2.5x more likely to achieve greater revenue and profitability than their less mature peers. The ability to quickly integrate new add-ons and manage complex transactions as PortCos scale enables operators to reach maturity faster, capitalize on growth opportunities and improve ROI.  

Standardized Data Management

Standardized data ensures high-quality and consistent financial information across all PortCos. This consistency is crucial for accurate board reporting and enables PE firms to present a clear and unified financial picture to stakeholders.  

Generative AI and machine learning are fueling broad improvements in data quality, forcing a better data management process. In a survey conducted by Talend, a data management platform, 46% of executives reported that they don’t feel that their data has the speed and flexibility to satisfy the demands of the business. According to Gartner, by 2026, 80% of enterprises are expected to be using some form of GenAI technology. This underscores the critical need for PortCos to be equipped to leverage the benefits of advanced technologies.  

Manual data cleaning processes are inefficient and challenging, particularly for PortCos with limited time and resources. NetSuite integrates AI throughout its platform to boost productivity, accelerate data analysis and uncover insights that may not be immediately visible through traditional methods. These advanced insights empower more informed decision-making, allowing firms to optimize portfolio management and enhance value creation. Additionally, it frees up fund managers and founders to focus on higher-level strategic initiatives, rather than time-consuming operational tasks.  

Key Takeaways

NetSuite enhances scalability and management reporting, offers flexibility for integrating new add-ons and standardizes data for advanced analytics. This enables PE firms to streamline financial management across their portfolios, driving higher valuations and successful exits. 

For PortCos looking to maximize value and operational efficiency and funds looking to streamline operations across their portfolio, partnering with a NetSuite expert can be a strategic move that drives long-term success. To learn more, or to schedule a call with one of our subject matter experts, contact us today. 

Frequently Asked Questions

 

Q: What is NetSuite?

A: NetSuite is a cloud-based ERP suite that provides comprehensive tools for financial management, inventory management, HR and professional services automation. It offers businesses of all sizes a single, unified platform to support organizational growth.

Q: How does NetSuite enhance scalability and reporting for PE firms?

A: NetSuite provides real-time financial data and advanced tools, enabling PE firms to assess the financial health of their portfolio companies to make quick, informed decisions. Its scalable architecture supports organizational growth by adapting to their evolving needs. 

Q: Why is standardized data management crucial for PE portfolio companies?

A: Standardized data ensures consistent, high-quality financial information to support enhanced board reporting and decision-making. NetSuite’s approach also supports the integration of AI/ML, helping firms optimize portfolio performance.

Q: What are the benefits of integrating new add-ons in NetSuite for PE firms?

A: NetSuite’s flexible architecture allows PE firms to integrate new tools quickly, improving workflows and reducing the need for disparate platforms to accelerate data maturity, enhance ROI and support finance transformation across portfolio companies.

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