The ‘Data Dimensionality’ Challenge
Crossroads Health originally ran on nonprofit management software Blackbaud. To refine its budgeting process, the team started implementing a tool — which was later acquired by software company Questica — that was supposed to integrate well with Blackbaud.
The Crossroads team quickly realized that the new tool couldn’t easily accommodate its budgeting process. Crossroads runs labour distributions in its grant funding and reporting, taking an employee’s time and salary and allocating those costs across multiple grants. One employee, for example, has an allocation of 17 dimensions.
Crossroads needed a budgeting system that could support that dimensionality in order to, for example, create proposals for some of its primary funders. In addition to the budgeting issues, Crossroads was projected to expand as an FQHC and wasn’t getting its desired level of support from its software vendor or consultants. The search for a replacement system was underway.
NetSuite’s Planning and Budgeting Tool Stands Out
Crossroads vetted ERP vendors including Sage, Microsoft, Acumatica, and NetSuite. Microsoft Dynamics 365 seemed like a good choice at first, as a highly rated system. However, support seemed to be lacking. NetSuite, on the other hand, had exactly the support network of consulting groups and in-house resources that Crossroads was looking for.
NetSuite was also considered one of the top ERPs in the industry, and Crossroads found that NetSuite Planning and Budgeting (NSPB) had the dimensionality required for its particular budgeting and forecasting needs.
When they were researching the move to an ERP, the importance of a well-executed implementation became a recurring theme. NetSuite stood out in that category, too. The NetSuite team offered a robust ERP implementation plan and walked Crossroads through all the deliverables and timelines, giving them total confidence in moving forward.
A Smooth Implementation and Continued Training
During Crossroads’ ERP implementation, a local NetSuite consulting partner supplemented the NetSuite implementation team. One member of that team was a former controller at behavioural health companies, providing business knowledge that was especially helpful in setting up the system.
The implementation team also allowed plenty of time for Crossroads employees to complete all the training they needed to be well-versed in NetSuite. Crossroads maintains a NetSuite Learning Cloud Support Company Pass, which teams use to access online training courses that help them do their everyday work — especially finance tasks — more efficiently in NetSuite.
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Reporting and Budgeting See Quick Improvements
Crossroads’ senior managers were quick to take advantage of NetSuite’s reporting capabilities. Running reports in their previous system was a complicated chore, but now they use NetSuite’s user-friendly interface to dive into transaction details, answer questions quickly, and easily examine all of the data within their purview.
The new system really paid off during Crossroads’ annual budgeting process. The team was finally able to stop re-using the complicated formula logic and payroll allocations from its former budgeting spreadsheets and instead do a “total refresh” of its grant and cost centre budgets in NetSuite.
Grant funding often requires nonprofits to “draw down” funds in stages, allocating dollars to projects as they’re needed. It takes careful tracking and planning for organizations like Crossroads to make sure they draw down all of their awarded grant dollars, leaving none on the table.
With NetSuite, the accounting team easily forecasts and tracks its use of every grant “down to the penny, so that we use every last one.” For some grants, nonprofits must submit an amendment to the government if they reallocate more than 25% of funds in their budget — something Crossroads needn’t worry about thanks to its thorough forecasting.
The organization also uses NetSuite Planning and Budgeting to allocate grant dollars across several projects as needed, which its old system couldn’t accommodate. Over the past couple of years, for example, the team tracked $4 million from the federal Certified Community Behavioral Health Clinic grant program against all the service lines it ran in, ensuring compliance.
Daily Operations Become Seamless
For Crossroads, the benefits of NetSuite don’t stop at budgeting. It also uses the system to:
- Deal with rising costs. Crossroads has faced higher costs recently due to inflation. It has also increased wages by 12% over the past 18 months. At the same time, incoming funds from many sources were flat year-over-year: Medicare and Medicaid don’t always increase reimbursement rates as costs rise. And while federal grants may increase slightly, it’s certainly not always proportional to inflation. To meet this challenge, the accounting team is again leaning on NetSuite’s ability to allocate expenses in detail, so it can calculate an accurate operating margin for every level of the organization. The result will be a refined view of each area’s financial performance, which leadership will use to pinpoint areas for improvement.
- Submit stronger grant applications. When organizations like Crossroads apply for grants, they must submit detailed documentation on everything including headcount, salary, benefits, and taxes. NetSuite Planning and Budgeting makes it easy – even when budget constraints stray from the norm. For instance, Crossroads is currently working on a grant budget for Early Head Start, one of the federal programs it supports. The program doesn’t follow a typical fiscal year, which would’ve been a problem for Crossroads’ former budgeting system. In NetSuite Planning and Budgeting, however, the team can allocate costs outside of its own fiscal year — while factoring in their current number of full-time employees, current open roles, cost-of-living adjustments in federal grants, and other variables — to lay out exactly how it will use the Early Head Start revenue.
- Prepare budget data for the board. Whether it’s for grant applications or board presentations, the team seamlessly exports budgets and actuals from NetSuite to Excel with NetSuite Planning and Budgeting Smart View. They organize the data by cost centre: the pharmacy versus health centres versus the Early Head Start program, for example. Each stakeholder can view the data the way that they prefer it sliced and diced.
The Bottom Line
Two years into its experience with NetSuite, Crossroads continues uncovering new functionalities as its operations expand. They’ve said team members often come to show him a capability they’ve just learned about, and they’re creating new efficiencies with the system daily.
With the ability to budget and track spending at any level of detail — plus gain the insights needed to ride out economic shifts — Crossroads is ready for whatever comes next. As a partner for Netsuite that services India and South Africa, Linked is your gateway to this incredible solution. Get in touch with us today to get your business up and running with Netsuite.
About Crossroads Health
Crossroads Health is a nonprofit provider of behavioural health and mental health services in Northeast Ohio. More than 300 employees serve about 7,000 clients between eight locations including clinics, recovery facilities, and a pharmacy.
A diverse mix of sources contributes to the $28 million that brings in annually. Federal grant monies and funding from local counties have slowly increased in recent years, while funds also come in from Medicaid, Medicare, and commercial insurance payers.
Over the past five years, Crossroads had doubled in size. It recently expanded into primary care and added a pharmacy in an effort to become a Federally Qualified Health Center (FQHC). FQHCs receive additional federal funding and reimbursements from Medicare and Medicaid for their work in underserved communities.