Moderated by Emily, Digital transformation Consultant at Hyperbots
Emily: Hi, everyone. This is Emily and I’m a digital transformation consultant with Hyperbots. Really pleased to have Rick on the call with me, who has been into finance his entire life and has been a CFO to various organizations across different industries and revenue streams. So really great to have you, Rick.
Rick Suri: Thank you for having me.
Emily: So, Rick, the topic that we’d be discussing today is GL coding schemes and chart of accounts in NetSuite, and I’d want to kick things off by asking, how would you describe the GL coding scheme in NetSuite, and what makes it unique compared to other platforms?
Rick Suri: That’s a really good question. NetSuite’s GL coding scheme is designed for flexibility and scalability. It includes a unique combination of account numbers, account types, and segments, such as departments, classes, locations, and some custom fields, allowing businesses to tailor the chart of accounts to their specific needs. Unlike other platforms, NetSuite supports multi-subsidiary and multi-currency transactions, which is particularly valuable for companies operating in multiple markets. This multidimensional coding scheme allows for detailed financial tracking and reporting, which sets it apart from simpler systems like QuickBooks.
Emily: So, Rick, what are some common errors or mistakes that organizations tend to make when setting up or managing their GL coding in NetSuite?
Rick Suri: Organizations sometimes make mistakes such as creating overly granular accounts, which can complicate reporting and analysis. Another issue is inconsistent use of segments, like departments or location codes, leading to incomplete financial data. Misclassification of account types, such as recording an expense as an asset, can also cause significant discrepancies in financial statements. Additionally, duplicate or incorrect handling of multi-currency transactions are frequent errors that can affect the integrity of financial data.
Emily: Got it. So how does NetSuite’s GL coding scheme differ from QuickBooks? And why is NetSuite often preferred by mid-sized companies?
Rick Suri: As I mentioned before, NetSuite offers advanced features such as multi-subsidiary management, multi-currency support, and detailed segment tracking, which QuickBooks lacks. NetSuite provides a higher degree of customization, allowing businesses to create a GL structure tailored to their specific needs. Additionally, it offers robust consolidation capabilities and integrates seamlessly with other business functions like CRM, inventory, and supply chain management. Mid-sized companies, especially those with multi-subsidiary and multinational transactions, prefer NetSuite because it can scale with their growth, manage complex accounting requirements, and provide deeper insights into their financial performance.
Emily: Got it. So, Rick, can you explain how NetSuite supports the creation of a flexible and scalable chart of accounts for growing businesses?
Rick Suri: Yes, of course. NetSuite’s flexibility comes from its support for multi-subsidiary and multi-book accounting, allowing companies to manage multiple entities under a single platform. It offers segmented accounting, which enables tracking of financial data across various dimensions, such as departments or locations. Features like dynamic allocation, automated journal entries, and advanced consolidation make it easier to adapt to changing needs without constantly restructuring the chart of accounts. Additionally, NetSuite allows for customization through custom fields and scripting, ensuring that businesses can maintain a flexible and scalable chart of accounts as they grow.
Emily: Understood. What specific features in NetSuite help businesses maintain accurate and compliant financial records, especially in a multi-entity environment?
Rick Suri: As I mentioned earlier, NetSuite provides multi-book accounting, allowing businesses to maintain separate books for different entities or subsidiaries while having the flexibility to consolidate them for reporting purposes. It also offers advanced intercompany transaction management, eliminating the risk of double counting or errors in consolidation. The automated journal entry feature ensures recurring transactions are accurately recorded, reducing the chance of manual errors. Furthermore, real-time reporting and customizable dashboards provide visibility into financial performance, helping maintain compliance and accuracy by using the general ledger as a source of truth.
Emily: So, Rick, in what ways can external AI tools enhance the management of a NetSuite-based chart of accounts?
Rick Suri: AI tools can provide several benefits to managing a NetSuite-based chart of accounts. They can automate data validation and cleansing processes, reducing the risk of errors such as duplicate accounts or misclassification. AI tools can also detect anomalies and unusual patterns in financial data, which could indicate fraud or noncompliance. Moreover, they can automate the reconciliation process, match transactions across various accounts, and provide continuous monitoring and alerts for potential issues. By using AI tools, businesses can maintain the integrity of their chart of accounts more effectively and make data-driven decisions.
Emily: Got it. And talking about the benefits a little bit, Rick, what are some of the key benefits of NetSuite’s multi-dimensional segmentation approach for mid-sized companies?
Rick Suri: NetSuite’s multidimensional segmentation allows companies to track financial data across several customizable dimensions, such as departments, classes, locations, and even custom fields. This approach enables mid-sized companies to gain granular insights into their operations, improve financial analysis, and make more informed decisions. It also supports complex reporting requirements and provides the flexibility to adapt to changing business needs. As companies grow, their multi-dimensional approach ensures that they can continue to segment and analyze their data in ways that drive strategic growth.
Emily: Got it. Just one last question, Rick, to round things up. How do NetSuite’s integration capabilities with other business functions contribute to its preference among mid-sized companies?
Rick Suri: NetSuite integrates seamlessly across various business functions like CRM, inventory management, e-commerce, and supply chain management. This integration allows for real-time data sharing across departments, reducing data silos and ensuring a unified source of truth. For mid-sized companies, this means they can streamline operations, enhance collaboration, and improve decision-making. The integrated platform also supports scalability, as businesses can add new functionalities without needing to switch systems, making NetSuite a preferred choice for companies aiming for growth.
Emily: Got it. Thank you so much, Rick, for these insightful answers. Your expertise helps clarify why NetSuite is a popular choice for mid-sized businesses and how external tools can further enhance its functionality. It’s been a pleasure speaking with you today.
Rick Suri: Thank you for having me. I’m glad to share insights on this interesting topic.
Moderated by Emily, Digital Transformation Consultant at Hyperbots
Emily: Hi, everyone! This is Emily, and I’m a digital transformation consultant with Hyperbots, Inc. I’m pleased to have Dave on the call with me. Dave Sackett is the VP of Finance at Persimmon Technology, thank you so much for joining us today, Dave.
Dave Sackett: Yeah, thank you, Emily.
Emily: So, Dave, the topic we’ll be discussing today is debit or credit entry postings and the different nuances across ERP systems like QuickBooks, SAP S/4HANA, and NetSuite. To keep it brief, my first question is, how do the postings of debit and credit entries differ across these ERPs specifically when a vendor invoice is posted?
Dave Sackett: Okay, to answer that, I’ll categorize by small, medium, and large data requirements. QuickBooks might have the simplest and shortest journal entries in terms of debits and credits, followed by NetSuite, then SAP. SAP has a lot more complexity and required fields to post a transaction, so it’s a bigger effort in SAP compared to QuickBooks. NetSuite falls somewhere in between.
Emily: Understood. Thank you, Dave. Moving on, what are the main differences you’ve seen in tax handling among QuickBooks, SAP, and NetSuite when posting vendor invoices?
Dave Sackett: Similar to the number of fields each system requires, when it comes to tax compliance, there are tools that each ERP can leverage for tax assistance. QuickBooks, which I’m currently using, is quite simple. NetSuite offers more functionality and good APIs for tax services, while SAP is the most complex and thorough ERP, especially in handling international taxes.
Emily: Understood. So, Dave, what unique features does SAP S/4HANA offer for handling vendor invoices that differentiate it from QuickBooks and NetSuite?
Dave Sackett: With SAP, there’s a far greater opportunity for granularity in data tracking. You can track by vendor, region, or almost any business-specific criteria, which allows for detailed outbound reporting. It’s very complex, with many required fields, which support robust data tracking and reporting. So, if in-depth tracking is important, SAP might be the best choice.
Emily: Understood. Since you mentioned you’re currently using QuickBooks, what limitations does QuickBooks have in handling complex vendor invoices compared to SAP or NetSuite?
Dave Sackett: QuickBooks is generally geared toward small businesses, treating data somewhat like a checkbook. It doesn’t offer the depth of analytics found in NetSuite or SAP, which are better at tracking vendor assignments, purchase history, and FP&A analytics. So, compared to the other two, QuickBooks is limited in data gathering and analysis.
Emily: Understood. Also, Dave, how can AI-based external tools help improve the accuracy and automation of GL posting?
Dave Sackett: That’s an excellent question. Each ERP system can support AI integration, and the more complex the system, the greater value you gain from having API connections to third-party solutions for enhanced accuracy and automation.
Emily: Understood. Thank you so much, Dave, for discussing the differences between ERP solutions and explaining how AI can enhance them. It was great having you, and thank you for joining us today.
Dave Sackett: Yeah, thanks, Emily.
