NetSuite for Professional Services (2026)

NetSuite for professional services: different ERP needs

TL;DR: NetSuite is a strong fit for professional services firms with 30-500 employees that need integrated project accounting, time tracking, utilization management, and flexible billing (T&M, fixed-fee, retainer). Smaller firms use the native Projects module; larger firms add OpenAir PSA for skills-based resource matching and capacity planning. Expect a 3-5 month implementation.

Walk into most ERP demos and you'll see a lot of inventory talk. Warehouses, pick-pack-ship, bill of materials, demand planning — all critical for product companies and completely irrelevant to a consulting firm, ad agency, or IT services company.

Professional services firms don't move boxes. They sell expertise, delivered as projects, measured in hours, and billed against contracts. The ERP features they need — project accounting, resource utilization, time tracking, revenue recognition for multi-element engagements — are secondary features in most ERPs. In NetSuite, they're first-class capabilities.

After working with many services firms on their NetSuite implementations, here's how the platform actually gets used and what to look out for.

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The financial foundation

NetSuite's core financial modules work well for services firms without much special configuration. Accounts receivable tracks client invoices and collections. Accounts payable manages vendor and subcontractor payments. General ledger handles multi-entity consolidation for firms operating across geographies.

What services firms configure differently is the chart of accounts and financial reporting structure. Instead of COGS reflecting material costs, a services firm's cost of revenue is labor — fully loaded salary, benefits, and allocation. The chart of accounts reflects this: revenue by service line, cost of labor by practice area, and overhead allocation methods that distribute facilities, technology, and administrative costs across delivery teams.

Department and class structures in NetSuite typically mirror the firm's practice or service line organization. A management consulting firm might have departments for Strategy, Operations, Technology, and Human Capital. An IT services firm might organize by Application Development, Infrastructure, Data, and Support. These dimensions drive the P&L analysis that partners and practice leaders use to evaluate performance.

Multi-entity is common for larger firms, especially those operating internationally. NetSuite's OneWorld handles intercompany transactions — a consultant from the US entity working on a UK client engagement needs transfer pricing entries — and consolidated reporting across entities.

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Project accounting: where it actually matters

Project accounting is the heart of a services firm's financial operations. Every engagement is a project with a budget, a margin target, billing terms, and a lifecycle from sold to delivered to collected. The firm's profitability is the sum of its project margins, and understanding which projects make money (and which don't) drives strategic decisions about pricing, staffing, and sales targeting.

NetSuite handles project accounting in two ways: through its native Projects module and through OpenAir PSA. The choice between them depends on the firm's size and complexity.

For firms under 30 delivery staff with moderate project complexity, native Projects provides basic project tracking, budgets, time logging, and project-level P&L reporting. It integrates directly with the GL, so project costs and revenue post to the correct accounts without additional steps.

For firms above 30 delivery staff, or those with complex resource management needs, OpenAir adds dedicated PSA capabilities: skills-based resource matching, utilization management, capacity planning, and more sophisticated project structures. The additional investment is justified when resource management becomes a strategic function rather than something that can be handled informally.

In either case, the project-level financial view should show: contracted value, invoiced to date, revenue recognized, direct costs (labor plus expenses), gross margin, and estimated margin at completion. This view, updated in real-time as hours and expenses post, gives project managers the information they need to manage delivery profitability.

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Time tracking: the data that drives everything

In a professional services firm, the timesheet is not an administrative formality. It's the primary source data for billing, revenue recognition, utilization reporting, and project cost tracking. Inaccurate or late timesheets cascade into billing errors, understated revenue, misleading utilization numbers, and unreliable project margins.

Getting consultants to enter time promptly and accurately is an operational challenge that no technology fully solves, but NetSuite (and OpenAir) provides the infrastructure. Weekly timesheets with project-task breakdowns, mobile entry for field-based staff, reminders for overdue submissions, and approval workflows that route through project managers — the mechanics are there.

The cultural element matters more than the technology. Firms that treat time entry as a non-negotiable daily habit get better data than firms that allow "catch up on Friday" behavior. The tools can enforce submission deadlines and escalate non-compliance, but leadership has to back it up.

For billing purposes, timesheet entries need to classify hours correctly: billable, non-billable (internal meetings, training), and not-to-exceed (billable work that exceeds the project budget and won't be invoiced). These classifications drive utilization and realization metrics differently, and getting them right matters for accurate performance reporting.

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Billing flexibility

Services firms bill in every imaginable way, and the billing structure often changes mid-engagement. A project might start as time-and-materials during discovery, convert to fixed-fee for delivery, and include a monthly retainer for ongoing support. NetSuite needs to handle all of these, ideally within the same client relationship.

Time-and-materials billing pulls approved hours at the consultant's bill rate and creates invoice lines. The simplest model, and the one with the most transparent cost-to-revenue relationship. NetSuite generates invoices from approved time either on demand or on a schedule.

Fixed-fee billing invoices against contractual milestones. The billing amount is decoupled from the hours worked, which means revenue recognition and billing follow different schedules. This is where many firms get into trouble — billing on schedule while the project is over-budget creates a margin problem that doesn't show up until the engagement is nearly complete.

Retainer billing establishes a recurring monthly fee for ongoing services. Hours worked against the retainer draw down the balance, and overages either roll into the next period or bill as time-and-materials. NetSuite handles retainer tracking, but configuration requires thought about how to handle unused hours and overage.

Mixed arrangements — which are the norm, not the exception — require careful setup. Each billing element within an engagement needs its own billing rule, rate table, and revenue recognition method. Getting this right during implementation prevents the "manual billing spreadsheet" that so many services firms maintain alongside their ERP.

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The utilization conversation

Utilization is the metric that services firm leaders obsess over, and for good reason — it's the single biggest driver of profitability. A firm with 75% utilization at the same bill rates and cost structure as a firm at 65% utilization will be dramatically more profitable. The leverage of getting 10 more productive hours per consultant per month across 100 people is enormous.

NetSuite reports utilization at the individual, team, practice, and firm level. The calculation is straightforward — billable hours divided by available hours — but the definition of "available hours" varies by firm. Some exclude PTO and holidays from the denominator; others don't. Some include business development time as billable; others categorize it separately. Configuring NetSuite to match your firm's utilization definition is a setup conversation that matters more than most teams realize.

Beyond backward-looking utilization, forward-looking capacity planning is equally important. How utilized will your team be next month? Next quarter? Do you need to hire, or are you over-staffed for the pipeline? NetSuite (especially with OpenAir) provides the project allocation and resource planning data to answer these questions — but only if project managers maintain accurate future resource plans, not just track historical hours.

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Reporting for partners and practice leaders

Services firm reporting serves multiple audiences, and each cares about different things.

Partners and firm leadership want firm-wide financials: revenue, EBITDA, revenue per professional, backlog, and cash flow. NetSuite's standard financial reports and dashboards handle this well. Custom KPI dashboards showing trending utilization, average bill rate, and win rate give leadership the strategic view.

Practice leaders need practice-level P&L, team utilization, project margin analysis, and pipeline visibility. Saved searches segmented by department or class provide this, with role-based dashboards showing each leader their own team's performance.

Project managers need real-time project financials: budget consumed, margin at completion, resource allocation, and time entry status. Project dashboards in NetSuite provide this, with drill-through to individual time and expense entries for investigation.

Finance needs AR aging, WIP balances, unbilled revenue, deferred revenue, and revenue recognition status. These are standard NetSuite reports, with services-specific customization around project WIP and unbilled analysis.

The key is designing the reporting structure during implementation, not after. Services firms that treat reporting as a "phase 2" afterthought end up with months of data that can't answer the questions they need answered, because the underlying project and resource data wasn't captured with the right granularity.

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Making the decision

NetSuite is a strong fit for professional services firms between 30 and 500 employees that need integrated project accounting, time tracking, and financial management. Below 30 people, the overhead of NetSuite (cost, complexity, implementation effort) may not be justified — simpler tools like QuickBooks plus Harvest or Toggl might serve you better. Above 500 people, you're in enterprise territory where the NetSuite vs. SAP vs. Workday conversation becomes relevant.

For the mid-market services firm, the decision usually comes down to whether you're willing to invest in a unified platform that handles billing, project accounting, and financials in one system, versus continuing to stitch together multiple tools and manage the integration gaps manually.

Frequently Asked Questions

Does NetSuite work for consulting firms?expand_more

What is NetSuite OpenAir used for?expand_more

How does NetSuite handle time tracking for professional services?expand_more

Can NetSuite handle mixed billing (T&M, fixed-fee, and retainer)?expand_more

How much does NetSuite cost for a professional services firm?expand_more