the buyer s guide to financial management software the 10 essentials of an effective financials...

7/31/2019 The Buyer s Guide to Financial Management Software the 10 Essentials of an Effective Financials Solutions

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The 10 Essentials of an Effective Financials Solution

The Buyers Guide to FinancialManagement So tware


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White Paper

R06 NetSuite 2012. www.NetSuite.com

Table o Contents

Introduction. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3

1. Core Financial Management Capabilities . . . . . . . . . . . . . . . . . . . . . . . . . 4

Cash Flow Management . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4

Recurring Revenue and Revenue Recognition Management . . . . . . . . . . . . . . . . . . . . . . . . . 4

Financial Planning and Reporting . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5

Fixed Asset Management . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6

2. Integrated Inventory Management, Fulflment and Shipping . . . . . . . . 7

3. Low Total Cost o Ownership and Superior Ease o Use . . . . . . . . . . . . . 7

4. A Streamlined Order-to-Cash Process . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9

5. Procure-to-Pay Processes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9

6. HR Process Management . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10

7. Business Intelligence . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11

8. Multi-Company and Global Business Management . . . . . . . . . . . . . . . . 11

9. Adaptability to Specifc Business Models . . . . . . . . . . . . . . . . . . . . . . . . 12

10. Project Accounting and Contracts Management . . . . . . . . . . . . . . . . . 13

Conclusion . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14


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NetSuite 2012. www.NetSuite.com NetSuite The Buyers Guide to Financial Management So tware 3 | 14

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To fnd out more, contact NetSuite Inc. at 1-877 NETSUITE or visit www.netsuite.com.

IntroductionManaging your companys inancials is the backbone o your business and is

vital to the long-term health and viability o your company. Yet attention toyour bottom line o ten takes a back seat during times o increasing revenuesand growth. To continue applying the necessary inancial rigor to support rapidgrowth, the accounting department needs the right tools to most e iciently dotheir job. Without tools to handle the business and regulatory requirements o ahigh-growth company, accounting sta wastes time on manual and duplicativework while closing the books every month and you may end up hiring extratemporary sta to per orm this work.

When spreadsheets and workarounds become the norm or your inancedepartment, you know its time to upgrade your inancial management solution.Your inancial close times and audit preparations take too many weeks tocomplete and sales that occur on the last day o the quarter o ten do not getentered into the system, thereby not getting recognized as revenue on time.Critical inancial processes such as handling inancial consolidation, multi-stateand country taxation, and reporting based on multiple currencies become a hugeproductivity drag on your entire department and are plagued with errors.

Add on regulatory requirements such as revenue recognition and constantlychanging accounting standards across countries youre operating in, and thepressures get compounded. I any o these scenarios sound amiliar, its timeto take a hard look at how your existing business systems may be hurting yourbottom line.

This white paper outlines the 10 essentials o a complete inancial managementsystem and how the right solution can help you keep up with the rapidlychanging business world.


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1. Core Financial Management CapabilitiesAccounting Functionality

Every inancial management system needs to have basic accounting unctions such as general ledger,

accounts receivable and accounts payable, with an audit trail built in. Beyond basic accountingunctionality, your inancial management system must be extensible to accommodate uture growthwhile simultaneously allowing you to keep an eye on the bottom line. For example, Hard Dollar, anarchitecture and design irm, was able to obtain a 278% year-over-year pro it growth with NetSuitescloud inancial management system while reducing administrative costs by 20%.

I your company is expanding rapidly, you need your inancial management system to allow a virtuallyunlimited amount o general ledger accounts and sub-accounts to be provisioned. It must allow you tode ine your own accounting periods and let you close individual components separately to match theneeds o any new subsidiaries and international divisions that you may introduce. And inally, it musthave prede ined charts o accounts or a wide range o industries to help with quicker deployment.Without these essential accounting unctions, it becomes very hard or your inance sta to monitorthe multitude o cost centers within your company and ensure that you are operating within yourset budget. For instance, Digital Check, a manu acturer, was able to grow 350% in six years without

adding any sta by upgrading to NetSuites inancials solution.

Cash Flow ManagementOne o the keys to managing your inancial health is your ability to monitor your cash low care ullyon a regular basis. When your company is growing rapidly, you may ace unexpected costs orpermits, licenses, raw materials, equipment, extended contract work, and vendor agreementsto name a ew. These investments o ten require large up ront payments and smart inancialplanning to keep cash low positive. I there isnt enough cash on hand to meet any one o theseobligations, it could result in repercussions or your company, threaten its growth and even exposeit to legal liabilities.

To avoid these potential pit alls, it is vital that your cash in lows keep pace with your cash out lows.Your inancial management system should allow you to per orm cash low analysis to examinethe components o your business that a ect cash low, such as accounts receivable, inventory,accounts payable and credit terms, to name a ew. By per orming cash low analysis on theseindividual components, youll be able to more easily identi y cash low problems and opportunitiesor improvement.

Real-time visibility is important in making timely in ormed decisions. When in ormation can beaccessed instantly rom almost anywhere, without wasting resources on data extraction and tyingdata rom di erent sources together, employees can make more accurate, aster decisions. By havinggreater real-time visibility into your cash lows through detailed dashboards and key per ormanceindicators (KPIs), youll be alerted to discrepancies and red lag situations a lot more rapidly.

Recurring Revenue and Revenue Recognition ManagementRunning a business with a predictable revenue stream is di icult when youre in nascent stages ogrowth because there are so many uncertainties related to new customer acquisition. But once you

establish a stable customer base, you need to ocus e orts on extracting ongoing revenues romthese customers and increasing your customers value to power your next stage o growth. Closecoordination between inance, sales, and service is necessary to identi y recurring revenue streams,and de ine the periods o chargeability or services rendered and when revenue can be recognized onyour companys balance sheets. Your inancial management system needs to be able to handle andreport on these varieties o recurring revenue scenarios.


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When identi ying potential recurring revenue streams, it is imperative to know your companyscost to serve. Your inancial management system should be able to accurately model di erentchargeability scenarios and get a handle on direct and indirect customer costsacquisition costs,service costs and product delivery costs, as well as which customer segments drive margin and whichdo not. The old adage that 20% o your customers generate 80% o your pro its is particularlyimportant with recurring revenue, because the remaining 80% o break-even or marginallylossmaking customers may be costing you year a ter year unless you smooth out pro itability acrossyour customer base.

It is also important to have good revenue recognition processes in place. Your billing in rastructureneeds to be able to handle multiple pricing schemes or di erent customers. You may be managingdi erent payment terms, whether monthly, quarterly or annually, and may be billing customers inadvance, in arrears, or prorating them on partial months. Using spreadsheets can quickly get out ohand, and di erent or one-o billing arrangements can throw things o and result in billing errors.A inancial management system with robust billing capabilities ensures that you are able to manageyour subscription based billing plans easily and accurately. It can even turn billing into a competitivedi erentiator by allowing your customers to change their billing plans and payment options, thusimproving customer satis action and lowering attrition.

While billing processes greatly aid with revenue recognition, a inancial management system shouldalso help you comply with FASB, SEC and AICPA regulations regarding revenue recognition. Yourinancial system should eature built-in support or key revenue recognition rules such as SOP 81-1,SAB 101, EITF 00-21, EITF 08-01 and EITF 09-03 to enable you to recognize revenue or multi-element sales, and to recognize them at di erent rates.

These new revenue recognition rules bring with them a whole set o complicated calculationsthat your inance sta must per orm. A inancial management system that incorporates supportor lexible revenue recognition will ensure that your sta reduces their dependence on multiplespreadsheets and error-prone manual processes. Such a system also helps ensure that you gain clearvisibility and continual monitoring or all aspects o the revenue recognition process, and that you arepositioned to manage and recognize di erent types o revenue such as time-based, percentage ocompletion and event-based, among others.

Support or these new revenue recognition rules is especially important because new regulations canallow companies to recognize revenue much sooner. Be ore the advent o these new regulations, iyou were unable to determine the air value o any o the items that were part o a sale, you had tode er the revenue or those items until they were delivered sometime in the uture. However, thesenew regulations allow you to apply an Estimated Selling Price (ESP) or items not yet delivered andrecognize their revenue a lot earlier. These regulations thus have a material impact on your revenuesand consequently are very important to your bottom line.

Financial Planning and ReportingTo accurately plan and orecast uture costs or various initiatives, your inancial management systemshould give you deep visibility into the current state o your companys operations so that you canidenti y problem areas.

Financial planning involves pulling together data rom several departments within your company togain a comprehensive view o your operations, and then modeling several what-i scenarios toassess the impact o di erent cost structures. Without a inancial management system that allowsyou to easily per orm these unctions, your inance team will end up wasting time consolidating datarom various systems instead o per orming strategic analysis.

With NetSuite, all o ourdata is 100% accurate, presentedin real time and available at theclick o a button. Its made ahuge di erence to the waywe work.

Arboricultural Association


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Financial reporting or compliance purposes is extremely important in todays highly regulatedenvironment. Regulations such as Sarbanes-Oxley and numerous GAAP standards must be adheredto strictly. In this kind o environment, it is very important that your monthly reports, per ormancereporting and inancial close be impeccable, in case you are ever audited. This is a major reason whyit takes so long or many companies to close out every quarter. A inancial management system thatcan withstand regulatory scrutiny, accelerate inancial close and produce key inancial reports ondemand o ers a tremendous competitive advantage.

A robust system should also allow your inance sta to drill through rom data entry sheets orbudget reports directly into underlying transactions, providing deep and unparalleled insight intoyour business. It would also allow your team to monitor any inancial measures according to theirrolewhether controller, inance manager or analystthrough customizable dashboards and KPIs.

When it comes to inancial planning, your budgeting and orecasting unctionalities rank at thetop o the list, especially because o their ocal role in controlling costs. Your inancial managementsystem needs to enable multidimensional data collection and automate the consolidation o plans sothat you can clearly look into the costs or personnel, sales, capital equipment and more. Automationalso improves accuracy and reduces errors by eliminating broken links and ormulas.

A key best practice within inancial planning is to compare actual data with plan data. Withspreadsheet-based planning, integrating actual data into budgets, orecasts or what-i scenarios iscumbersome, and subsequent variance analysis is nearly impossible. Financial management systemswith best in - class budgeting and orecasting capabilities seamlessly integrate year-to-date actualswith uture expectations and allow you to per orm variance analyses to compare actual resultsagainst budgets.

Fixed Asset ManagementAs your company grows, you may acquire a variety o ixed assets such as equipment, land andbuildings. You need to be able to maintain and control the complete asset li ecycle o all your ixedassets, rom creation to depreciation, revaluation and retirement, so that you can get a better viewo how this a ects your bottom line. Accordingly, a inancial management system must have detailedasset management unctionality and support multiple depreciation calculation types. It needs to

handle both depreciating and non-depreciating assets, maintenance schedules and insurance. It mustalso tightly weave your asset acquisition process into your accounting processes to help ensure thatno equipment slips through the cracks.

There are several methods o depreciation and each method has a di erent set o advantages anddisadvantages. Your inancial management system should allow you to use any o the standarddepreciation methods including straight line, ixed declining, sum o years digits, asset usage andeven your own user-de ined depreciation methods.

Strong management o your ixed assets can help you bene it rom tax deductions related to thedepreciation o your assets. These deductions only serve to help shore up your cash lows so that youcan reinvest the proceeds into your business and grow urther.

By implementing NetSuiteand the Financial PlanningModule, we have been ableto link together strategy,

planning and execution. Wecan continuously monitor actualper ormance while rapidlyanalyzing multiple what-i scenarios, which allows us to bear more nimble and e ective in

making both tactical and strategicdecisions.

KANA


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2. Integrated Inventory Management, Fulflment and ShippingA major component o cost control is ensuring that inventories are replenished at the appropriatetimes. When you have more inventories on hand than required, it increases your cost o goods sold(COGS), which in turn hits the pro it margins o your companys various product lines. To manage

each products margins with a clear view into inventory costs, turn rates and inventory pro itability,a good inancial management system will incorporate strong inventory management controls andprovide you with complete real-time visibility into demand, supply, costs and ul ilment trends.

Key capabilities o inventory management include bin and lot management, landed cost, demandbased replenishment, customer and volume pricing, and multi-location inventory. Keeping tracko per ormance around these areas will enable your company to gain control over inventoryreplenishment and ensure that you have enough product on hand to ill anticipated orders, whilekeeping excess stock and related costs to a minimum. In this manner, you can slash inventory costsby tightening control o stock levels while increasing operational e iciencies. Knig Wheels saved$120,000 annually by using a inancial management system with integrated inventory managementcapabilities while simultaneously doubling its sales in our years. Knig was also able to reduce itsneed or physical inventory by 25% with just-in-time shipments.

Strong inventory management capabilities also enable you to track the speci ic cost or each lot asproducts are bought and sold. As a result, your company gains pricing lexibility by being able toassign di erent prices to di erent types o customers and sales channels, such as wholesale, retailor online sales. This strategy helps you increase your customer ootprint and extract maximumvalue, while at the same time controlling your costs. Furthermore, integration with your back-o iceaccounting system allows your inance sta to calculate demand plans leveraging historical data andmodel how expected sales and purchase orders a ect uture inventory levels.

While having detailed inventory management unctionality certainly helps you maintain stringentcontrols over your margins, it can add even more value when integrated with ul ilment andshipping. With integrated inventory, order ul ilment management and shipping, you can eliminatemanual re-entry, order processing errors, and the costs o reconciling shipping in ormation. Inact, according to independent analyst irm Nucleus Research, companies typically save as muchas 35% on annual shipping costs with a single, integrated back-o ice system or inventory and

ul ilment. You can also reduce ul ilment errors by electronically routing orders to suppliers or dropshipping and improve your returns process with integration between order management and returnmerchandise authorization.

3. Low Total Cost o Ownership and Superior Ease o UseA typical inance team has to contend with several applications ranging rom accounting toinancial planning, business intelligence, inventory management and ront-o ice systems like ordermanagement, CRM and ecommerce. Your IT department has to spend valuable time to plan,deploy, manage, integrate and maintain these multiple applications. Capital-intensive hardwarein rastructure, servers and so tware licenses, combined with expensive, time-consuming upgrades,drive up your operating expensesand those costs can get out o control the aster you grow.Furthermore, your inance sta may be dispersed in multiple locations, and may have to deal with acumbersome and slow VPN client to access your inancial systems.

Your core business management system should not only per orm essential inance unctions but alsominimize overhead and help manage costs. Selecting a cloud-based inancial management system isa sure- ire way to reduce the TCO (Total Cost o Ownership) o your solution.

NetSuite lets us look intoour suppliers workload, and letsour customers see our inventory.And it lets us monitor our entirebusiness rom anywhere in theworld, all in real time.

Knig Wheels


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It is only through a cloud-based inancial management solution that your sta can easily access datain real-time without having to rely on IT. This type o solution is managed and operated by a providerand all o your transactional and customer data is housed at the providers data center together withthe hardware and so tware in rastructure to run it.

This kind o inancial management system is called multi-tenant, which means that the provider isable to achieve economies o scale by running the application or thousands o customers acrossa shared in rastructure, with cost e iciencies that are impossible to achieve or an individualdepartment to realize on its own. The result is that a cloud-based multi-tenant inancials applicationcan be more than 50% cheaper to run than its on-premise alternative. In act, in a recent Instituteo Management Accountants (IMA) survey, respondents cited lower TCO as the number one bene ito moving to the cloud, ollowed by anytime, anywhere access. A study by Hurwitz & Associatesseems to back this assertion Hurwitz ound that the TCO savings or a cloud versus an on-premisebusiness application ranges anywhere rom 35-55%.

For example, Magellan GPS was able to save 20% on its IT costs by selecting a web-based inancialmanagement system like NetSuiteand triple its sales channel productivity at the same time.

An added bene it o a cloud-based inancial management system is that there is a single versiono the application. This means that your inance department receives automated upgrades andunctionality (such as support or the latest accounting and regulatory changes) without requiringthey undertake a time consuming and pain ul patching and upgrade process. It also means that

customizations you make to your system carry over seamlessly during automatic upgrades, and ITdoes not have to be burdened with reimplementing customizations. The result is a seamless upgradeprocess taken care o by your vendor, such that your inance department will always be running onthe latest so tware and hardware.

With a cloud-based inancial management system, your employees have anytime, anywhere accessto their systems through a web browser. This enables your inance sta to always have access tocritical in ormation such as cash on hand, cash lows, liabilities, debts, pro it margins and more.

We have tripled ourproductivity, enhanced ourrisk management and reducedour overall ecommerce IT

expenditures by more than 20%by switching to NetSuite.

Magellan GPS

Figure 1: Benefts o Moving to the Cloud


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4. A Streamlined Order-to-Cash ProcessOne key to maintaining control over your bottom line is ensuring that your core business processescan scale e iciently as you continue growing. Without doing so, you can compromise your abilityto increase pro its demand as your revenues grow. As businesses grow rapidly, the order-to-cash

process is one o the irst areas to expose these growing pains and an ine icient, manual order-to-cash process can be expensive and cause major revenue recognition and customer service issues.

When sales reps convert a lead into a customer and place an order, that in ormation typically needsto be trans erred to other databases to process the order management ul ilment, update theaccounting in ormation, populate customer records and calculate and pay commissions. Withoute icient order-to-cash systems, you may not be able to capture this in ormation in your accountingsystems in time or the close o the quarter, resulting in inaccurate reporting, decreased revenueresults and unhappy sales reps because o delayed commission pay-outs. Furthermore, hours oemployee time are wasted retyping data rom one system to another, and costs only rise as moresta and contractors must be hired and paid overtime to handle order processing demands.

Once an order has been placed into the order management system, you need to ensure thatcustomers provide payment in time and that your days sales outstanding (DSO) number doesnt get

to a point where it results in order cancellations or customer dissatis action. A system that integratesront- and back-o ice processes and includes built-in order management allows your business toreduce unnecessary paperwork and costs by enabling personnel to turn closed opportunities intoorders with just a ew clicks o the mouse. It also provides your inance and executive team with armore accurate and timely insight in to business per ormance.

By streamlining and accelerating the order-to-cash process, your business can bene it rom improvedcash lows, the way Gawker Media did. Gawker Media used NetSuite to integrate its accountspayable and receivable processes and was able to cut bookkeeping costs by 20%. Gawker alsointegrated its order-to-accounts payable processes to maximize cash on hand.

Another company, Outback Toys, sped up its order-to-cash process by 25% while saving $100,000annually and growing the business by 33% with NetSuite. Nucleus Research ound that customersusing NetSuites automated quote-to-cash unctionality were typically able to reduce quote-to-cashtime by 50%.

5. Procure-to-Pay ProcessesAll businesses need to purchase services and equipment. Without strict purchasing and approvalprocesses, you run the risk o employees engaging in maverick spending that can hurt your bottomline. A inancial management system that handles the complete procure-to-pay process gives youvisibility into all areas o spending to quickl y identi y and rec ti y any out- o -con trol cos ts andind opportunities or savings. You can also create a complete purchasing audit trail that

ensures accountability.

Another bene it o a streamlined procure-to-pay process is time savings and the elimination o errorsthrough automation o the entire process through purchasing, receiving and account payables. Whenyour inance employees can track the status o purchase requisitions and orders through sel -serviceunctionality that eliminates paper-based orms and associated errors, it rees your sta to ocus onactivities that help grow the business while trimming the bottom line.

A urther bene it o automation is that new purchase orders are automatically generated oncere-order points have been reached or a certain good or raw material. Instead o having to pullsta o projects to look up previously-completed purchase orders and order quantities, andgenerate another purchase order, purchase orders can be automatically triggered by your inancialmanagement system.

Wed predicted 2009 wouldbe a down year, but ended upwith signi icant year-over-yeargrowth. We now have more than20 million monthly readers, andgood part o that success comesrom our improved operations

e iciency.

Gawker Media


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Once purchase orders have been generated, vendors that provide goods or services to your companyneed to get paid. Your inance sta will need to con irm with the receivables department whetherthe services or goods were delivered as promised and only then authorize accounts payable to releasepayment to the vendor. All these activities consume valuable cycles that your inance sta couldspend on other critical inancial processes and operations. Integrating receivables with accountspayable ensures that payment can be promptly delivered to vendors.

6. HR Process ManagementYour employees are your companys most valuable assetwithout them, you simply cant achieveyour growth objectives. However, there are a lot o in rastructure costs associated with eachemployee, and it is important to minimize them.

Basic HR management such as onboarding, payroll and expense management can morph into aspreadsheet nightmare when the HR department passes in ormation over to your inance sta .Calculating parameters such as salary, withholdings, deductions, and sick and vacation day accrualscan consume several hours each week, with manual, error-prone processes executed primarilythrough spreadsheets and jumping around various siloed applications.

For your inance sta to accurately ascertain what employees cost the organization, this in ormationneeds to be integrated with the accounting system. Moreover, a payroll system should calculateearnings, deductions, company contributions and taxes automatically. This payroll system alsoshould automate all tax management and tax iling, provide direct deposit options to employees andacilitate paperless payroll. In this manner, all payroll processes are streamlined, manual and duplicateprocesses eliminated, and money is saved as a result.

A closely-related aspect o payroll is incentive compensation or your sales personnel. Finance stao ten spends hours every month calculating and paying commissions, and your sales operationspersonnel have to spend countless hours resolving sales disputes on commission payment amounts.To avoid these scenarios, you need an incentive compensation system that allows sales operations tocon igure sophisticated sales commission rules based on quotas, sales, quantity and pro itability. Thisincentive compensation system should integrate with your payroll systems to streamline paymentprocessing, and integrate with your accounting systems so that your inance sta can oversee sales

incentive programs.Another way to trim employee in rastructure expenses is to enable employee sel -service within yourHR management system and integrate it with your accounting system so that all data changes areautomatically captured. A system where employees can enter and track timesheets, expense reports,purchase orders, manage vacation time and W-4s, and view pay-stub details ensures that theseprocesses get completed in a timely manner. Noti ications and requests or approvals can be routedautomatically to the appropriate managers, and all approvals can instantly be reported to inance andpayroll. Having this sel -service unctionality in your inance systems allows your sta to analyze theimpact o employee activity on the bottom line, not just move data rom spreadsheet to spreadsheet.

7. Business IntelligenceGetting an accurate view o your companys operations can o ten be a challenge. Data is requentlyragmented and scattered across several systems, and spreadsheets are o ten out o date, error-proneand hard to maintain. Traditional add-on analytics tools are expensive to implement, and o ten lackthe key business intelligence components and easy access required to make them pervasive.

What are the key business intelligence components that you need or both a holistic and detailed viewo business operations? For a broad overview o the per ormance o your various divisions, you needrole-based dashboards that deliver personalized insights tailored to each inance users need be it thecontroller, inancial planning and analysis managers, analysts or the CFO. These dashboards need to extractdata rom a single, centralized data repository so that the data is real-time and multiple versions o thetruth are eliminated.

You cant grow i you spendall your time in the auditorsdepartment. As a venture-backedcompany, the transparency andaccurate revenue recognitionNetSuite provides are critical.

Eloqua


11/14


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To analyze the per ormance o your company correctly, you need quantitative metrics and KPIs toevaluate the success or ailure o various activities within your company departments. These KPIsenable you to measure per ormance against benchmarks and goals speci ic to lines o business,and show key variances and period-on-period trends. Once anomalies have been identi ied,you should be able to drill down rom this summary level to greater detail, all the way to theunderlying transaction.

Beyond historical comparisons, the ideal solution will give your inance sta ers a real-time viewinto KPIs and per ormance metrics that span the ull 360 degrees o your operationsacross sales,marketing, service and ul ilmentto enable analysis o inancial impacts and cross-departmentaldynamics. Real-time data, accessible on demand over the web, delivers actionable insights thatimprove your ability to rapidly address issues as they arise and capitalize on opportunities.

8. Multi-Company and Global Business ManagementAt some point in time, your company may grow across multiple geographies, with multiplesubsidiaries and international locations. At that stage, you will have to deal with reporting currency,calculating taxation and meeting di erent legal and compliance requirements or each division. Youllalso need to consolidate inancial and business in ormation and gain visibility at the regional andglobal level.

Handling local taxes poses a challenge or many companies. Your inancial management systemshould readily handle local taxes across subsidiaries through an integrated tax engine that allowsor multiple tax schedules or everything rom GST to VAT, to consumption tax or general sales tax.The system should also handle country-speci ic accounting standards and deliver multi-currencymanagement in all inancial areas including accounts receivable, accounts payable, payroll, billing,invoicing, order management, orecasting, quota management and commissions.

With global currency exchange rates changing on a daily basis, your inancial management systemneeds to be able to automatically update exchange rates. It needs to enable your inance departmentto maintain the current local currency conversion rate as well as the historical rates used at the timean order was placed or a commission was paid.

While multi- aceted currency conversion capabilities are an important part o running a globalbusiness, consolidation o inancials and real-time roll-up is critical to achieving a more rapid inancialclose, as well as to gaining timely visibility into operations. Your inancial management systemneeds to deliver multi-currency consolidation across accounts receivable, accounts payable, payroll,inventory, billing, invoicing and order ul ilment rom local in-country operations to the regionalo ice to global headquarters.

For instance, SuccessFactors was able to consolidate inancials or 19 subsidiaries across 19 countriesusing NetSuite OneWorld. By deploying NetSuite OneWorld or multinational operations, SuccessFactors saved $250,000 annually in IT salaries and 33% o the equivalent costs o on-premise serversand so tware.

The need or intercompany eliminations is important i you have multiple subsidiaries. Manycompanies do not have a clear intercompany elimination policy and ind themselves strugglingwith currency, accounting and tax implications. You need to properly revalue oreign currency

intercompany assets and liabilities and set currency conversion rates be ore per orming theintercompany eliminations. To do this, your inancial management system needs to have local entityand inter-entity reporting, automated management o revenue recognition, tight internal controls,easy-to- ollow audit trails and multi-national compliance capabilities.

NetSuite gives us a completeview o our business in real time, andwe can now look at items such asP&L in much greater detail than everbe ore. It saves the leadership teamhuge amounts o time, time that wecan better use to ocus on growingour client base by 150% over the lastthree years.

Cynergi

The dashboard is my avoritething about NetSuite. Im always onthe road but never ar rom all ourkey business indicators.

Intermountain So t Water

Theres no doubt that NetSuitehas continued to help us increasesales. Over the fve-year period,NetSuite has helped us grow revenueby 250 to 300 percent. A lot othat is down to the transparencythat NetSuite provides. We can seeexactly whats happening and whatneeds to be done.

i-nexus


12/14


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9. Adaptability to Specifc Business ModelsYour inancial processes need to be robust, auditable and as automated as possible to maximizee iciency and provide detailed visibility into your company operations. In re-engineering yourprocesses to meet these goals, you need to be sure that your inancial management system is lexible.

When your company tries to enter new industry verticals or expand to new sales channels or markets,your inancial management systems need to be agile enough to adapt to these new business models.

Your inancial management system should be able to address the needs o your unique industryand business model. In industries such as manu acturing, or example, you will want to integrateyour inancials with your suppliers manu acturing processes to reduce lag between your customersdemands and your ability to plan your manu acturing resources. When dealing with wholesaleand distribution companies, one way to improve your cash lows is to shorten your days salesoutstanding (DSO) with automated billing and collections management.

In the so tware sector, because o the intangible nature o the assets involved, you may need detailedamortization schedules to depreciate these assets appropriately. These examples are only a samplingo the several use cases you may encounter with speci ic industries.

In addition to industry-speci ic capabilities, the system should have built-in con igurability, ease o

customization and lexible work low management to align with your unique business processes.The work low engine must be able to rapidly edit the actions and rules that impact a particularinancial process and be able to speci y conditions or work low transitions to help with back-o iceautomation. In act, work low handling can be a major part o process improvementin the caseo CB Engineering, a specialized equipment provider with complex technology, the time to compilea 100-line custom-order proposal dropped rom three hours to thirty minutes with NetSuite. Theinancial management system should also contain graphical customization components so thatyour sta can more easily and rapidly create customizations and custom objects by simply selectingvarious logic elements.

10. Project Accounting and Contracts ManagementFor companies with pro essional services organizations and services businesses, project-basedaccounting and billing is one o the most important and complex areas or inance sta to tackle.Your sta needs to be in constant contact with the appropriate business units in your company toensure that project deliverables have indeed been completed and that payment can be recognized,collected and released to the contractor. Coordination with accounts payable or payment processingalso needs to be per ormed with detailed line items o the various deliverables the contractor hasprovided at each stage. The situation gets more complicated when multiple contractors are involvedand can take up even more o your inance sta s valuable time.

When the project-to-bill process is integrated with the inance and accounting systems, stakeholdershave complete real-time visibility into the relevant aspects o the project and no longer must spendtime retrieving this in ormation rom other groups. Best-in-class inancial management systems canautomatically calculate the appropriate proportions o payments to be made at each stage o theproject to all parties involved. This reduces the amount o time your inance sta needs to work oncomplex payment calculations so that they can ocus on activities such as analyzing project costs to

determine areas where money can be saved or uture projects. For instance, Magnetic, a websitedesign irm, uses NetSuite OpenAir to review how similar projects per ormed in the past and uses thebilling scenarios as a baseline when quoting new work. As a result, unpro itable projects are avoidedor ixed be ore a statement o work (SOW) is signed.

We wanted a customizable,integrated and user- riendly solutionthat delivered all relevant businessprocesses within one package.NetSuite saves us time and allowsus to ocus on running the business,and that has helped us increaseour turnoverour revenuesby 95%.

2Pure

We operate on threecontinents, Europe, Asia andNorth America, and our businessis undergoing enormous growth.It would be impossible to predictuture systems and in rastructurerequirements or our business. WithNetSuite OneWorld, we donthave to.

BLUW

We now have a world-classSaaS ERP system in NetSuiteOneWorld and, with our multiplesubsidiaries in North and Latin

America, Europe and Asia-Pacifc,the so tware is so easy to use thatwe can get new users up to speedvery quicklywhich is key to oursuccess ul overseas expansion

SuccessFactors


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Robust project-based billing capabilities serve as a threshold or complex contracts management.Many companies su er revenue leakage and customer churn because they rely on cumbersome,ine icient and sluggish manual processes to manage contracts. The many spreadsheets andorganizational hando s involved introduce costly errors and project delays, and rob companies othe opportunity to capitalize on the ull potential o their contract-based business. In many cases,companies leave money on the table because they cannot respond quickly enough to expiringcustomer relationships.

One o the many issues around contracts management is managing the multiple transactionsthat typically occur with a customer over the course o a year. Some o these may be one-timetransactions, while others are annual contract renewals or new users, product and module licenses,or support and maintenance entitlements. A good inancial management system simpli ies thisprocess or both you and your customer by allowing the co-termination o multiple transactionsinto a single contract with a single renewal. At the same time, multi-contract support providesor additional lexibility when it may not be appropriate to co-terminate all items under a singlecontract. This streamlined approach helps ensure maximum revenue during the renewal process.Thisstreamlined approach helps ensure maximum revenue during the renewal process.

Upli t and discounting are critical aspects o the contract management process. As you renew a

customer, you may increase pricing based on a pre-de ined price book, a standard across-the-board increase, or you might increase pricing or only some o your customers. Similarly, you mayextend discounts to select customers. Its important that you have the lexibility to implement andcustomize upli ts and discounts across any range o customers. However, managing this processwith spreadsheets introduces the risk o error, lost revenue and customer dissatis action. Its essentialthat your inancial management system supply eatures that enable upli ts to be managed acrossthe board or on a customer or contract basis, while supporting granular discounting down to theindividual transaction level..

With NetSuite, our contractsand processes are linked, making itmuch easier to see what we keepand what we remit. We can createa bill o o a contract, and whenwe collect payment, the systemautomatically knows what weneed to pass on to the athlete, andgenerates a payable.

Wasserman Media Group

We have yet to run into a billingscenario that NetSuite OpenAir hasnot been able to handle.

Magnetic


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White Paper


ConclusionA inancial management system is key to running your operations pro itably. You need to have realtimeinsights into numerous inancial metrics such as pro itability ratios, inventory margins, liabilities, ixedassets and taxes. An integrated inancial management system that brings together your order-to-cash

and procure-to-pay processes provides you with great business visibility while allowing your stato per orm their jobs much quicker. An adaptable inancial management system with rich businessplanning, comprehensive system integration and solid reporting capabilities that operates in the cloudwill position you or the next stage o growth.

Core Financial Management

General Ledger, Accounts Receivable &Accounts Payable

Expense Management

Tax Management

Compliance Management

Asset Acquisition, Depreciation, Disposal &Revaluation

Depreciation Management

Asset Process Accounting Automation

Cash Flow Management

Revenue Recognition

Support or Key Revenue Recognition Rules

Revenue Recognition Management onMulti-Element Sales

Custom Revenue Recognition Templates

Financial Planning & Reporting

Budgeting & Forecasting

Modeling & Administration

Inventory Management

Inventory Cost Management

Product Margin Management

Inventory Control Capabilities

Monitor Inventory Turnover

Demand & Supply Planning

Purchasing & Vendor Management

Purchasing Audit Trails

Automatic PO Generation

Quote, Order & Billing Management

Electronic Routing or Drop Shipping

Automatic Quote-to-Order Trans ormation

Automatic Order-to-Invoice Trans ormation

Integrated Pricing & Discounting withQuote Management

Integrated Order Management & RMA

FMS ChecklistAutomation o Di erent Payment Terms

Support For One-Time, Partial, Pro-Rated,or Recurring Billing

Monitor DSO & Aging

Shipping & Ful illment

Integration With Shipping Carriers

Sel -Service Viewing o Shipping StatusMonitor Inventory Backorder

Allow Selection o Shipping Priority

Logistics Tracking

Support Multi-Step Ful illment

Human Resource Management

Payroll Management

Integration With Accounting

Automated Tax iling

Employee Travel & Expense

Employee Sick & Vacation Reporting

Incentive Compensation

Business Intelligence

Real-Time Dashboards

Key Per ormance Indicators

Sel -Service Reporting

Multi-Subsidiary Management

Support or Multiple Currencies & Tax Rates

Local Entity & Inter-Entity Reporting

Real-Time Exchange Rates

Project Accounting & ContractsManagement

Resource Management

Contract Renewal Management

Proportional Payments

Project Costing

Custom Upli ts & Discounting

Multiple Transactions Management

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