Financial Reporting

Financial reporting and analysis with NetSuite

NetSuite provides a variety of ways to report on and analyse your organisation’s finances. Whether you are looking for the current up to date position, a comparison of how one period or a complex analysis showing how your organisation fared over a period of time – NetSuite can provide the appropriate tools.

These tools are designed for regular users, powers users or developers. Regular or power users would benefit from appropriate training to maximise their effectiveness in using the tools.

I suggest that when first using NetSuite clients agree with their specialist implementers the necessary reports and other analyses they need and allow the specialists to undertake the customisation on their behalf. The next phase is that users become more familiar with the NetSuite interface and (perhaps after some basic training) start to customise certain aspects.

Any power users (including administrators) would benefit from training (from NetSuite or a Solution Provider) in their particular specialisation.

Experienced developers will usually be able to learn how to use NetSuite’s advanced tools via manuals and help facilities (and trial and error), but NetSuite do offer courses targeted at them so they can get up to speed as quickly as possible.

I shall describe those tools in five sections depending upon what customers have contracted for:

  • those that come with basic NetSuite ERP
  • those that come with the additional module Advanced Financials
  • those available with OneWorld
  • the additional SuiteApp NetSuite Financial Planning (also known as Adaptive Planning for NetSuite)
  • options for extracting data to import into excel or other spreadsheets or any other applications for further analysis

Tools with basic NetSuite ERP

KPIs

Key Performance Indicators (KPIs) synthesize raw data into critical business metrics that can be shown on the dashboard in user-defined formats. They are particularly relevant for providing the latest information on key areas of the business – which may be to do with costs, revenues or cashflow for example depending upon what areas are most important at any point in time.

NetSuite includes over 75 pre-packaged KPIs (most of which have are either directly or indirectly connected with financial data) based on NetSuite standard reports, including summaries of forecast, pipeline, orders, cases, and financial data. Pre-packaged KPIs can quite straightforwardly be used by all users with minor customisation – such as which period is being used (this month, this quarter, year to date etc) and which period it is to be compared with (last month, the equivalent month of last year etc).

Power users can create custom KPIs, based on custom saved searches.

The following types of dashboard portlets are offered to display KPIs:

  • Key Performance Indicators portlet. This portlet displays a simple summary line for each selected KPI, with clickable links that drill down into each KPI’s underlying data source.
  • KPI Meter portlet. This portlet displays a visual representation of KPI data, a semi-circular meter providing comparison, date range, and threshold values at a glance.
  • Trend Graph portlet. This portlet displays a line graph of KPI data values over selected time intervals. Popup trend graphs are also available from clickable icons in the Key Performance Indicators portlet and the KPI Scorecard portlet.
  • KPI Scorecard portlet. This portlet displays a performance scorecard that can include complex comparisons among multiple KPIs over multiple date ranges or accounting periods. Scorecards also can include Excel-like formulas with KPIs and functions in their expressions.

KPIs are role-based and feature-based, meaning the KPIs that you can choose to display depend upon the role you used to log in to NetSuite and the features that are enabled.

Reports

NetSuite provides over 75 pre-packaged reports that can be easily customised by end users, alternative ad-hoc reports can be produced to meet specific needs by power users.

These reports can be shown on screen, printed, emailed or exported to .csv, .xls, .doc or .pdf files.

Most organisations produce certain reports regularly for example profit and loss reports monthly and maybe balance sheet quarterly and these regular reports can be set up with standard criteria to run automatically and made available to relevant staff or other board members.

Other reports are likely to be needed from time to time in response to a particular situation or demand for information.

Pre-packaged

The pre-packaged financial reports include all statements required by international and national accounting standards such as balance sheet, income statement, cash flow statement and statement of changes in equity. Other financial reports include: Banking/Budgeting, Sales, VAT/GST, Purchases, Customer/Receivables, Revenue, Vendors/Payables, Cost Accounting and Forecast.

Customisation of these reports includes adding new columns, totals or other generated figures. When customised in these ways a new version of the report is created that can be given a name and can be made available to other users with the necessary access control.

When running a pre-packaged report (whether or not it has been customised) the user has a number of options for example the dates covered by the report or whether to summarise totals or show details.

Ad-hoc

In developing ad-hoc reports – which would typically be undertaken by power users (or NetSuite specialists) – there are a series of predefined steps to be undertaken.

Firstly the user selects a metric e.g. ‘Amount of sales and return generated by a campaign’ or ‘Cost of goods that have been sold’.

Then a series of decisions must be made about what fields are to be included, what should be in each column and if totals and subtotals were needed, what they are to be.

These ad-hoc reports can then be customised in the same way as pre-packaged ones.

Searches

Searches are less limited in terms of the fields they can access than reports. The only limitation is that the user should have the authority to ‘see’ the fields in question. Having accessed the specific fields, they can be manipulated in a number of ways

NetSuite provides a variety of search tools including searching for a single record by keywords or returning a set of records that match defined filters. The results can be displayed in a choice of ways, exported to other applications, emailed to other users, and the search definitions saved for reuse.

The following methods can quickly find specific records:

  • Global Search. You can enter keywords in the Search field, located at the top of every NetSuite page, to search your entire account for matching records. Prefix your keywords with the first few letters of a record type and a colon to narrow results.
  • Quick Find Links. You can click a Quick Find icon in the header of many individual records to quickly find a record of the same type.
  • Quick Search Portlet. You can add a portlet to your dashboard, where you can enter keywords to return records with matching names or IDs.

The following methods return a set of records of a selected type, with values that match defined filters.

  • Simple Search. You can open a search page by clicking a Search task link. On this page, you can filter retrieved records by one or more field values.
  • Advanced Search. You can shift to advanced search mode by checking the Use Advanced Search box on a search page. On this page, you can filter records by formulas containing SQL expressions, and by join field values in related records, and you can sort results and group them into summary calculations.

You can save simple and advanced search results to a .csv, .xls, or .pdf file, and include these results in email messages. The output of these searches can also be manipulated to create totals, averages, comparisons etc.

An optional Pivot Reports BETA facility enables users to turn searches into polished reports.

I would define any user able to use the search facilities to facilitate any significant analysis or produce a reliable, readable report would be defined as a power user and probably have undertaken some kind of training (including using NetSuite’s free on-line training facilities).

Budgets

The budgets facility provides estimates of income and expense for a specified period of time, and are used for financial planning purposes. In NetSuite, each budget covers a year and permits the entry of an amount, per account, for each accounting period in the year. With basic NetSuite the types of accounts for which a budget can be set include: income accounts, expense accounts, income and expense accounts (to include all Income Statement accounts), or balance sheet accounts (to include assets, liabilities, and equity).

Budgets can be created for specific customers or projects, items, departments, classes, locations or any combination of these criteria. They can be set up within NetSuite or use the CSV Import Assistant to import budgets from external systems. Budgets can be based upon a previous budget or on a previous year’s financials.

SuiteGL

SuiteGL was introduced in 2014.2 with breakthrough capabilities for the general ledger component of NetSuite cloud ERP that can enable businesses to tailor general ledger processes to their unique business needs.

With SuiteGL, NetSuite customers and NetSuite Solution Provider partners can now transform the general ledger from a static subsystem into a dynamic business asset that is more adaptable to specific business requirements and changing conditions that automatically carries forward with every upgrade

Custom GL Lines Plug-in

Use the Custom GL Lines Plug-in feature to create custom GL impact lines on standard transactions, such as invoices and vendor bills, across single or multiple accounting books, eliminating the need for manual journal entries. You can also use this feature to add general ledger impact to custom transaction types.

The type of logic that you can define in an implementation of the Custom GL Lines plug-in depends on the accounting features enabled in your NetSuite account.

Custom Transactions.

Use the Custom Transactions feature to create transaction types designed for your specific business needs. This feature enhances your ability to efficiently define how each of your business processes affects your general ledger. You can name your custom transaction types to reflect your business logic. As with standard transactions, each custom transaction type can have its own numbering scheme, permissions, and workflow logic.

Custom Segments.

Use the Custom Segments feature to create custom classification fields similar to class, department, and location. You can create an unlimited number of custom segments, define possible values for each segment, and add the segments to specific record types. NetSuite users can then use the segments to classify records appropriately, allowing filtering and grouping of data based on categories specific to your business.

Additional tools with Advanced Financials

Multiple budgets

Customers who subscribe to advanced financials can create multiple budgets for the same time period and combination of criteria. For example a company may define a ‘best’, ‘worst’ and ‘expected’ budget.

They can also enter budgets for statistical accounts – see below. Budgets can be created for departments, classes, locations, items, and customers or projects. For example, you can enter a budget for the headcount statistical account that specifies the number of new employee requisitions for the Sales Department in the upcoming financial year. You can then compare the budgeted amount against the number of new employees by customizing the Budget vs. Actual report.

Statistical accounting

The Statistical Accounts feature, part of the Advanced Financial module, enables the tracking of non-monetary data which can then be used on reports and income statements. Its relationship with the financial activity can be examined.

Users who would find this feature valuable include those responsible for accounting maintenance and period close activities, journal entries, cost and revenue allocation, and financial reporting using ratios such as EPS (Earnings per Share). Statistical journal entries can be made manually or auto generate them through a saved search run by a statistical schedule.

Users who manually make statistical journals can also record an absolute statistical balance in lieu of tracking detailed changes. This is valuable for those users who capture periodic reports on statistical non-monetary data. For example, you receive a monthly report from your Operations Department that provides the square footage of office space used by each department in your organization. Rather than track the periodic differences in used office space, you enter the absolute value that overwrites all previous values. The absolute value is then available to you through reporting.

If the Dynamic Allocation feature is enabled, users can assign any statistical account to an allocation schedule. The weight for the allocation, based on the balance of the statistical account through statistical journals, is dynamically calculated at the time the allocation journal is generated. This is useful in advanced costing such as Activity Based Costing and Usage Based Costing, and when you are running cost centres and profit centres. Users can also use an absolute value in dynamic allocation schedules.

To run multiple dynamic allocation schedules in a specific sequence, users can create allocation batches. Commonly referred to as the step-down allocation method in cost accounting, users define the sequence where the result of the first allocation is the source pool of the second allocation and so on. Users can include up to ten allocation schedules in a batch.

There are several methods users can employ to monitor the balance of a statistical account. From the chart of accounts, users can view a specific statistical account register. From the saved search assigned to a statistical schedule, users can access the details of each statistical journal associated with that schedule. Users can search for statistical journal entries. Users can customize the Income Statement to include statistical account data, and then examine its relationship with their financial data.

Additional tools with OneWorld

For customers who use OneWorld (mostly companies with subsidiaries, whether in the UK or globally) there are some differences in financial reporting and analysis. Some of these differences are subtle variations on standard reporting but there is one feature that is only available with OneWorld which is multi-book accounting.

Multi-Book Accounting

The Multi-Book Accounting feature provides the ability to maintain multiple sets of accounting records based on a single set of real-time financial transactions. This enables businesses to support different managerial and regulatory compliance needs, such as:

Deliver different financial reports to serve different purposes

A company that maintains its primary accounting records according to United States Generally Accepted Accounting Principles (U.S. GAAP), for example, can add accounting books to generate different versions of financial reports and statements that are mandated by local governments or industry regulations.

Provide detailed transaction-based reports for each accounting book

Transaction-level reports can be generated for individual accounting books to satisfy managerial reporting requirements and provide detailed transaction level audit trail to book specific financial statements. Saved searches and KPIs also support display by accounting book.

Automate posting to multiple accounting books according to pre-defined accounting rules

You can create different revenue recognition and expense amortization rules for different accounting books.

Adjust financial results on a per-book basis

Manual journal entries, including intercompany journal entries, can be posted for individual accounting books.

Ensure data integrity across multiple accounting books

The system automatically maintains data synchronization for parallel transactions in different accounting books to ensure data integrity.

Enable customization to leverage the Multi-Book Accounting context

SuiteApps and customization can be implemented to yield book specific financial results.

The Multi-Book Accounting feature includes options for chart of account mapping, foreign currency management, and revenue and expense management to address these needs.

NetSuite Financial Planning

Adaptive Planning is from Adaptive Insights, a market leader in cloud-based budgeting, forecasting, and reporting. It is fully integrated with NetSuite and offered as NetSuite Financial Planning. With comprehensive financial planning, self-service reporting, analytics and more, Adaptive Insights complements NetSuite with a powerful cloud solution that accelerates budgeting and forecasting cycles and improves accuracy. Tight integration with NetSuite means automated import and export by subsidiary, department, location, class, item, and customer. Move between financials and plans with a click of a tab!

Key Benefits

  • Reduce cycle time by up to 90%
  • Decrease errors and improve data integrity with automatic aggregation
  • Improve transparency with audit trail, version control, and analysis tools
  • Enhance business support with integrated workflow and process management, driving more accurate budgets and forecasts

 

Completely Unified with NetSuite ERP

Together, Adaptive and NetSuite deliver a cloud-based end-to-end solution for financial management, accounting, and corporate performance management. •Accessible as a tab directly in NetSuite, so it’s a seamless transition for end users

  • Full integration means you can drill back to the detail in NetSuite
  • Drill all the way down to the transaction level

Comprehensive Financial Planning

Adaptive provides the planning capabilities you need to model your entire business – revenue and sales, capital assets, balance sheet and cash flow, headcount, expenses, and more. Managing global operations is easy too, with automatic currency translation and the power to report any data in any currency. •Incorporate drivers and assumptions to plan expenditures

  • Integrate with NetSuite for real-time sales data to drive planning and forecasting
  • Link model elements for dynamic, integrated financial statements

Extend NetSuite Reporting

Extend the power of NetSuite and empower business users with self-service reporting across all subsidiaries, departments, and locations. •Generate HTML reports for real-time analysis

  • Gain fast insight by drilling down into underlying details
  • Publish presentation-quality reports for board books and other packages

Analytics Drive Agile Plans

Analytics and planning together is the combination that makes you best-in-class. Visualize your historical actuals with interactive graphical dashboards that make it easy to identify trends, then update your forecast in real-time. •Use what-if scenario analysis directly on dashboards and drill down by any dimension

  • Improve business agility and use your actuals to drive plans for greater accuracy
  • Share knowledge across Finance and Accounting with annotations that are directly linked to metric data for a specific time period

Collaborative Budgeting & Forecasting

Annual budgeting, quarterly review, and monthly forecasting should be a team sport, so we provide powerful process management to get your LOB managers on board. •Optimized for mobility and collaboration to increase accountability and involvement

  • Monitor processes with incredibly easy functionality, simple usability, and ease of management
  • Define deliverables, assign them to users, monitor their status, and track their closure
  • View task statuses with at-a-glance graphs that automatically update

 

Options for extracting data for further analysis

There are options for extracting data to import into excel or other spreadsheets or any other applications for further analysis. Reports and the results of searches can be extracted via csv to excel or similar spreadsheets for further analysis.

SuiteAnalytics Connect

This additional module is suitable for developers and NetSuite offers a choice of training to help them get up to speed quickly. It is used by many SuiteApp developers including Adaptive Insights.

SuiteAnalytics Connect feature, formerly known as ODBC Connections for Advanced Reporting, gives technical users the power to access your organization’s NetSuite data by leveraging the familiarity and flexibility of SQL. This feature allows NetSuite data to be archived, combined with external data, and analysed or visualized leveraging third-party archiving, data warehousing and BI tools.

To support a broader set of tools for NetSuite data access, Version 2014 Release 2 introduced new drivers: a JDBC driver, an ADO.NET driver as well as 32-bit and 64-bit ODBC drivers for Windows and Linux. These new drivers enable access to NetSuite using any mainstream database connectivity standard.

To make it easier for technical users to quickly put the ODBC drivers to use, the ODBC drivers’ installers leverage a customer’s NetSuite account information to streamline the setup process.

KPI

NetSuite publishes ‘e-book’ on General Business KPIs

KPINetSuite commissioned from SL Associates published a number of research projects into what Key Performance Identifiers were most important to NetSuite’s customers and what results they were getting through using NetSuite.

We have referenced the vertical specific results in our vertical industries sections, but can now provide information on the general business results – that is to say the cross-vertical results.

The KPI improvements were in three categories: Business Viability, Financial Management and IT Management and Resources.

Under Business Viability the two KPIs were 360 degree visibility and actionable insights (which increased between 55 and 80%) and reporting time and resources (which reduced by between 40 and 55%).

Under Financial Management the seven KPIs were time to close financial books(reduced by 45 to 70%), audit completion and support time (reduced by 25 to 40%), time required to support compliance (reduced by 25 to 45%), accounting staff productivity (improved by 25 to 50%), collection time for accounts receivable (reduced by 30 to 50%), order process efficiency and costs (improved by 40 to 60%) and billing efficiency (improved by 15 to 25%).

Under IT management and Resources the two KPIs were IT support resource costs (reduced by 40 to 65%) and business continuity/disaster recovery costs (reduced by 45 to 65%)

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