Going public is a significant milestone for any fast-growing business. Preparing for an IPO can often be a long and complicated process, but having the right tools in place to support the process can be immensely helpful.
63% of technology IPOs have been running on NetSuite since 2011
Check out these 7 ways NetSuite can help your company raise the odds of IPO success.
1. Get a solid financial foundation in order
When planning on making an IPO it is essential to have a strong and comprehensive financial foundation in place before starting the process. Choosing a unified business platform is recommendable since the use of several separate systems may become more costly and require a lot of manual work down the road. Regulatory requirements can also prohibit the company from changing any financial systems during the IPO process and the year following it (note that requirements may vary in different countries). A company which does not have a system in place that provides appropriate and real-time access to critical financial data will have a harder time succeeding with their IPO.
Companies looking to go public must be prepared to provide three years of audited financial data, which requires a system capable of providing that.
Investors will want to see:
- solid debt-to-equity rations
- sufficient market capitalization
- predictable revenue and earnings streams
IPO candidates must also be capable of handling modern accounting challenges, such as asset valuation impairment, consolidated subsidiary financial statements issues and revenue recognition.
NetSuite ERP is a cloud-based business platform which offers all core business functions within the same system. It provides financial data and real-time insight into the company’s standing, as well as tools and capabilities to navigate complex challenges.
2. Prepare for rigorous financial reporting
The IPO process is greatly helped by the accurate and efficient production of financial statements, meaning there is significant value in investing in systems and automation that support global consolidation and financial reporting. By eliminating manual data entry, a company can scale more effectively as the business grows in volume or complexity. By ensuring that the reporting processes are transparent and supported by audit trails, a company will earn dividends throughout the IPO process and after.
Furthermore, it is important that companies starting the IPO process have robust management reporting capabilities. This requires the ability to analyze past performance and predict future performance, and thus requires investments in business intelligence and analytics.
NetSuite ERP provides the robust reporting and analytics that companies need to establish practices with automated reports around key performance indicators (KPIs), role-based dashboards and the ability to drill down by department, location, or subsidiary with a platform that lets even inexperienced users perform complex analytics.
3. Establish good corporate governance
Going public by making an IPO requires strong corporate governance. Therefore, companies that are considering starting the IPO process should establish a governance framework that keeps board members and executive management accountable in regard to their roles and responsibilities. The time and effort required for this process should not be underestimated, neither should the importance it plays in long-term success.
When a company enters the public market, regulators and investors will demand coordination, transparency, and consistency, unlike the loose policies and casual atmosphere that can be found in many private companies. In the public equity markets, governance is not optional, and each executive and director must be aware of how they relate to each other, to the company, and to the stakeholders.
NetSuite ERP provides tools and capabilities for governance, risk, and compliance. This gives companies confidence in their reporting and auditing from the start-up phase all the way through the IPO process and beyond without having to change systems. Automated controls and access based on role also provides security within the financial system.