Continuous Accounting is the Key to Faster Close, Smarter Reporting

For many in the finance department, the phrase “financial period close” brings with it visions of long days filled with time-consuming, cumbersome and stressful processes. Yet, despite the time devoted to it, this record-to-report process of accounts reconciliation, journal entries and financial reporting is essential for providing accurate information on business performance and ensuring compliance.

It doesn’t have to be so painful, however. Indeed, every CFO dreams of a faster close. Recent research shows why. In APQC’s General Accounting Open Standards Benchmarking survey, the bottom 25 percent of the 2,300 respondents said they need 10 or more calendar days to complete the monthly period close – the days between running the trial balance to completing the consolidated financial statements. In contrast, the top 25 percent of performers complete the monthly close in 4.8 days or less.

A faster period close process has two significant benefits. It gives executives in the business timelier access to the very latest data available, enabling them to make quicker and better-informed decisions. For the CFO and finance team, less time spent on closing the books means more time providing the analysis and insight that the business needs to make key decisions. They can provide input into scaling operations up or down in response to cash flow demands or changing market conditions, or how to reallocate resources in order to jump on an emerging opportunity.

At the same time, however, there is no room to sacrifice accuracy for speed. There are ways to have both. Smart finance teams are now employing ‘continuous accounting.’ Continuous accounting distributes the finance team’s workload evenly over an accounting period. If tasks normally associated with period close – such as reconciliations – are embedded in day-to-day activities throughout the month or quarter, there’s no last-minute demand for extra work as period end approaches, speeding up the process of closing the books.

The impact of continuous accounting can be felt beyond just faster close periods and relief for the finance team. Done right, continuous accounting can also improve real-time reporting and keep the finance function in step with the wider business, more closely attuned to the rise and fall of the organisation. The link between opportunities and challenges and their financial impacts are more immediately visible to all, enabling better-informed decisions.

However, there is a significant barrier to continuous accounting for many organisations: a hairball of incompatible finance and IT systems and unconnected spreadsheets.

To truly embrace continuous accounting, organisations need a modern cloud-based finance and ERP system that delivers data integrity and consistency, standard processes and automation. A unified ERP system with all departments working of the same source of data with access to the same general ledger, provides a common chart of accounts and a single version of data on inventory, payroll, sales orders and customers.

With a common data source, organisations can automate many of the previously manual tasks, such as journal entries, account reconciliations, variance analysis and intercompany transactions. With the cloud those can be executed automatically.

What’s more, with the entire finance team united through the cloud no matter where they are, it’s easier to more efficiently delegate financial close responsibilities. For example, if a typical financial close takes five days and requires 25 processes, the CFO can assign out five tasks per day to the global finance team. On day two, with all those tasks in the system, the CFO can see a report on what tasks from the prior day are not yet complete and address it. Gone are the days when managers and staff are giving CFO the answers they think he or she wants to hear. Moreover, the CFO knows who’s on target and where and how. In a cloud-based system, the CFO never has to ask the question and they always get a straight answer.

The CFO also has the ability to run KPIs on the close process identifying which individuals or locations are not completing their tasks on time and reallocating resources appropriately.

In these ways, continuous accounting means less stress for the finance team, while also providing the greater efficiency, higher accuracy and the cleaner financial statements that boards expect today.

A faster – and smarter – period close can deliver considerable value to the organisation, giving more relevant management information earlier and freeing up a lot of valuable time for the finance team and CFO to contribute more strategically to the business.

For more on strategy and finance, download the paper A Finance Director’s Guide to Planning, Budgeting and Forecasting for High-Growth Companies

Is Your Distribution Business Differentiating Itself in the Age of Amazon?

Amazon Business has put a huge stake in the ground across many B2B distribution sectors. It’s time for B2B distributors to sharpen their pencils and differentiate themselves, or risk being left behind. 

Ever since Amazon launched its Prime service in 2005, members have been shelling out an annual fee (currently $119) in exchange for free two-day shipping within the continuous U.S., among other benefits. Since then, Amazon has accumulated more than 100 million paid Prime members.

Now, the online retailer’s business buyers will get the same benefits—and then some.

In October, Amazon Business launched new Business Prime benefits for companies in the U.S., Germany and Japan. Business Prime membership costs $179 per year for up to three users; $499 per year for up to 10 users; $1,299 per year for up to 100 users; and $10,099 per year for over 100 users.

Along with perks like spend data visualization tools and help identifying potential cost-savings opportunities, members now get same-day delivery or free one-day shipping on qualifying orders of $35 or more.

It’s Time to Act 

As Amazon rapidly accelerates its delivery of functionality and benefits for business buyers, distributors across most industry sectors are being forced to think about what this means for them.

Right now, within the industrial segment alone, Amazon Business is selling fasteners, hydraulics, pneumatics, plumbing, industrial electrical, material handling products, metalworking and power transmission products (among others).

Adding Business Prime to the mix could make things a bit more challenging for companies trying to face off with the etail giant on the B2B front.

“From our vantage point, these latest additions to the Business Prime program demonstrate just how fast this $10 billion distributor can learn and grow,” Thomas Gale writes in Amazon Business Prime News: One Million Same-Day SKUs and New Benefits.

“The company is leveraging its unsurpassed cash management practices to enable much more flexible payment terms,” Gale continues. “Amazon Business is leveraging its enormous DC [Distribution Center] network to create a same-day assortment that surpasses any rival, thereby offsetting part of the advantage branch-based distributors have used as a differentiator.”

This may be so, but what Amazon Business lacks is the product and application expertise that the typical independent distributor has spent years (or even decades) building out.

With most of its business managed through its website, for example, neither Amazon Business nor its customer service reps are equipped to answer questions like: “Which specialized abrasive wheel is best for this particular application that I’m working on?” or “What type of wire can be run inside this conduit that I’m ordering?” This is where distributors have a chance to differentiate themselves in a way Amazon cannot.

If nothing else, Amazon’s latest move only reinforces the fact that distributors need to get their collective ecommerce acts together. Those firms still using first-generation websites—or, those that use their sites as nothing more than a calling card—for example, will quickly be left behind if they don’t establish (or improve) their online presence. By combining commerce and enterprise resource planning (ERP) on a single platform, for example, distributors can streamline their front- and back-end sales operations while creating an effective, cohesive online presence.

Stepping up Value-Added Offerings

Distributors can also start sharpening their “valued-added” pencils by promoting the service, support and add-ons that make their customers’ lives easier. Customers typically need these services on a daily basis—services like vendor managed inventory (VMI), kitting and assembly, warehousing and storage (for contractors that have limited space on the jobsite, for example), and even light manufacturing.

Long-term relationships, a local presence and a well-stocked warehouse that customers know is close by can also help distributors avoid getting into a price war with Amazon Business, or any other online seller, for that matter.

By leveraging what they know best, and by continuing to differentiate themselves on as many levels as possible, B2B distributors can maintain and even grow market share in today’s ecommerce-centric business world.

The Bottom Line

Every successful distributor knows that simply selling a commodity product at a lower price is a failing strategy, yet that’s exactly what many of them are choosing to do in the Amazon Business era.

It’s time to buck the trend by giving your customers something that they can’t get on Amazon. Solve their most pressing pain points, help them do their jobs better, provide a superior level of product expertise, offer outstanding customer service, and always go the extra mile—even if it means making 5 a.m. deliveries to the jobsite on next-day orders.

Learn more about Amazon’s Impact.

It’s Always Budgeting and Planning Season

Businesses seeking to create and maintain growth need to be firmly committed to budgeting and planning. And while planning and budgeting has traditionally been an annual or quarterly endeavor, to really be successful, it is probably best to always be in a budgeting and planning mode.

Many companies undertake budgeting at the beginning of the year, as if the turn of the calendar is a magical time to reassess plans and budgets. After all, if managing your business is a year-round endeavor, shouldn’t managing your budget be too?

Yet, we know how difficult planning and budgeting can be, and we have seen many budgets or plans fail.

Organizations that are effective at continually integrating financial and operational data, embedding analytics in every process, and using advanced analytical techniques to predict future trends outrank their peers by 70 percent on measures of profit and revenue, according to Ventana Research.

A key aspect of any planning process is that it focuses a company on the right opportunities and helps identify and avoid any barriers to reaching those objectives. Without planning, you risk being swept up in the wrong opportunities, and this lack of focus can have a significant impact.

“People think focus means saying yes to the thing you’ve got to focus on. But that’s not what it means at all. It means saying no to the hundred other good ideas that there are. You have to pick carefully. I’m actually as proud of the things we haven’t done as the things I have done. Innovation is saying ‘no’ to 1,000 things.”
—– Steve Jobs

Implementing a superior budgeting, planning and forecasting tool with the right type of process can reduce, even eliminate, uncertainty and improve efficiency while simultaneously ensuring this focus. Doing so requires employing the right planning, budgeting and forecasting application not only for early forecasting and estimates, but for measuring performance and identifying trends and deviations along the way. It provides you with a basis to be a proactive organization, nimble and quick, able to double down or make strategic changes to key opportunities when warranted.

Financial planning, budgeting and forecasting is a very complicated endeavor for any company. Clarity, flexibility and compatibility between your accounting system and planning tool is critical. NetSuite is tightly integrated with Oracle NetSuite Planning and Budgeting Cloud Service (PBCS) thanks to Oracle’s acquisition of NetSuite and the close coordination between development teams.

NetSuite launched PBCS in 2017. The application is the next generation of Hyperion Essbase (which Oracle acquired in 2007). Its integration with NetSuite ERP forms an end-to-end performance management system that includes planning, budgeting, consolidation, operational analytics and compliance reporting.

Download this ebook to understand how planning and budgeting can impact all stages of growth and learn how Lancaster Bingo is using PBCS to automate processes.

See the data sheet for more specific details on Oracle NetSuite PBCS.

Social Impact, Accelerated: How NetSuite Brings the Village to Nonprofits

Posted by Morgan Carey, Nonprofit Industry Marketing Lead

Nonprofit organizations come in all shapes and sizes, from international research societies to local community outreach programs. Just like for-profit businesses, each nonprofit has a unique mission and operating structure to support its growth.

Take Los Angeles-based nonprofit Michelson Found Animals Foundation, an organization founded in 2005 to donate tracking technology to animal shelters as a response to the pets lost in Hurricane Katrina. Later, it dawned on the founder, philanthropist Dr. Gary Michelson, that instead of simply writing checks he should fund innovative programs and technology. The foundation set out to operate in hybrid mode, as part philanthropy, part social enterprise.

Now, 10 years later, Found Animals has distributed $3.6 million in grants, facilitated the adoption of 20,000 pets and registered millions of animals in its database based on microchips that rival the top for-profit suppliers.

Contrast this competitive nonprofit and its balance of business-minded mission work with Brightpoint Health. This healthcare organization serves people in New York City’s five boroughs. Its innovation: it identifies the most underserved clients and brings the care to them. What started as a facility for those struggling with AIDS has transformed into a provider of medical and dental care, behavioral health and substance abuse treatment for more than 40,000 New Yorkers yearly.

Found Animals and Brightpoint Health both have a vision to make the world a better place, but have taken much different paths to achieve their goals, just like thousands of other nonprofit organizations. The operational complexity behind getting these missions off the ground is significant. It’s no secret that resources are typically strapped for nonprofits, that business processes aren’t always well defined, especially in the beginning, that these endeavors are sometimes staffed by volunteers and are labors of love and passion first and become full-fledged businesses along the way.

And like any business, it takes an ecosystem of customers and partners and a host of enabling infrastructure to succeed. In the case of NetSuite’s Social Impact program, that has meant having the opportunity to take the power behind what NetSuite built for the commercial sector and applying it in ways that could enable organizations like Found Animals and Brightpoint Health . . . and Kiva and Alex’s Lemonade Stand and hundreds more.

By working with these organizations, NetSuite has identified opportunities to continue bringing more to this nonprofit ecosystem, accelerating the missions of these endeavors by accelerating the mission and reach of its own Social Impact initiative with several new changes, called “Social Impact, Accelerated.”

The goal of Social Impact, Accelerated: to bolster nonprofit customer success and reach an even broader audience of deserving causes.

SuiteDonation – Accelerated Value

Stealing a page from Michelson Found Animals’ playbook, NetSuite surmised that it’s not simply enough to donate technology, which is one of the first points of entry into the Social Impact program and has helped fuel more than 1,300 nonprofits. Although the donation is a critical foundation, resource constraints often prevent companies like Found Animals from getting started using NetSuite as quickly as they would like.

Now, in addition to the software donation, every Social Impact customer will receive an activation of the solution at no cost. Leading practices from NetSuite’s extensive history of nonprofit implementations are baked right into the activation, so nonprofits can see immediate success just by getting up and running.

Suite Pro Bono – Accelerated Options

The NetSuite pro bono programs were originally built solely to help Social Impact customers use the software more effectively, pairing NetSuite employees with the organizations for quarterly virtual programs and in-person events. These projects foster networking, collaboration and various forms of innovation.

For example, Brightpoint Health participated in NetSuite’s 2017 Hackathon 4Good, which took place at SuiteWorld. The company took advantage of a full room of NetSuite experts to help streamline its back-office operations, including processing patient transactions and managing the organization’s funding.

This kind of success feeds on itself. It gets the thousands of NetSuite employees itching to be more involved. But because the majority of them are not NetSuite system experts, their skills can come in different ways, including help kick-starting a new fundraising campaign, executive coaching or marketing insights and assistance. That’s the basis for NetSuite’s new skills-based pro bono offering.

In other words, Suite Pro Bono now means bringing more NetSuite employees face-to-face (or Webex-to-Webex) with more nonprofit causes for more reasons than ever before.

Suite Capacity – Accelerated Connections

NetSuite’s role in the success of nonprofits is to be an enabler. That doesn’t just stop at technology enablement. To ensure nonprofits can build capacity for lifelong success, the Social Impact program has provided dedicated account management for customers, along with online learning opportunities focused on building confidence and skills.

But education goes far beyond facilitated courses. For example, Brightpoint Health created a medical center on wheels to cater to communities with no access to health care. For specific insights about Brightpoint Health’s journey, like how it got from idea to execution, or what technology was critical to its success, direct interaction is the most powerful tool.

In other words, nonprofits benefit most by connecting with and learning from other like-minded organizations. NetSuite is building a new Online Community and Knowledge Center to allow social enterprises to openly meet and share best practices and expand their ecosystem.

That sharing and learning creates sparks and leads to even more growth. In the case of nonprofits, it’s the kind of growth that changes lives and makes the world a better place.

Learn more about how NetSuite is investing in nonprofits:


Are you a nonprofit looking for a better ERP solution? Work with someone who cares as much about the integrity of your unique mission as you do.

Contact us today to set up your free demo.

Accomplish More with the New 18.2 Fall Release

Posted by Anand Misra, Sr. Manager, Product Marketing

We are excited to announce the NetSuite 18.2 Fall Release. In addition to introducing many new features, the release also provides product improvements. By delivering regular updates and keeping our products fresh, NetSuite helps our customers accomplish more by being nimble and keeping pace with the rapid changes in technology, compliance and regulations.

A lot goes into a release. Packaging global customer expectations, feedback and requirements while keeping abreast of the latest in technology, compliance and competitive landscape is a challenge to say the least. But, NetSuite has mastered the art and science of packaging all the goodness into its semi-annual releases. To improve time to market, NetSuite’s experienced global teams help guide the release through a long, complex and well-defined process that includes roadmap reviews, prioritization process and development effort specifically designed to derive value based on customer feedback and best practices.

Watch Sneak Peek to catch a preview of what’s new across several different areas. There is something for everyone. Highlights of the 18.2 release include:

Global Financials – Optimize the Finance Office and Empower Modern Global Finance

Gain more control over period close accounting, reporting and compliance with Period End Journal Entries. Convert payments to posted transactions clearing AP and get accurate cash balance for status and forecasting with In-Transit Payments. We have added new native localizations fulfilling reporting, tax and regulatory requirements for China, India and Japan.

Supply Chain and Order Management – Gain Competitive Advantage Through Operational Excellence

Reduce cost and gain better control of product changes with the Engineering Change Order. Boost retail sales, increase margins and reduce inventory costs with the new Merchandise Hierarchy. Improve manufacturing quality with mobile image capture and by defining and capturing inspection criteria and triggering appropriate corrective actions. Centralize and streamline cross subsidiary order fulfilment with WMS enhancements.

Professional Services Automation – Improve Efficiency, Increase Productivity and Revenue while Supporting Global Project Delivery

Gain more control over projects and more accurate project accounting with Planned Work. Optimize resource allocation by gaining better visibility of resource availability with HCM time-off and Resource Allocation integration. Ensure correct expense account balances by reconciling corporate credit card expenses and matching them with employee expense reports. Improve the overall expense report submission experience by allowing users to save it for later.

Commerce – Delight Customers, Empower Merchants and Simplify Business User Experience

Never miss a sale when the Point of Sale system is offline with enhanced Fallback solution. Achieve a consistent brand image and elevate subscriber engagement with easy to use email templates including availability of Subscription Email in multiple languages to help you customize content to international subscribers. Maximize profit by ensuring customers are always charged the right price at the right time with new Effective Date Pricing.

Human Capital Management – More Control and Increased Productivity

New enhancements to time-off functionality ensures that employees avoid losing valuable time off with alerts and HR admins can increase productivity by automatically adding time-off to time entries and weekly timesheets on approval. Improve process flow and administration with Payroll and NetSuite Financials integration. Secure sensitive HR data and processes with a Core Administrations Permissions configuration (beta).

Platform – Customize, Extend and Enhance with a Faster, More Efficient and Robust Development Environment

Increase productivity with SuiteFlow support for new Sublist actions – Send Email and Return User Error. Simplify scripting with the new Unified Script ID for custom segments. Get quick and easy access to the new SuiteAnalytics workbook with the new SuiteScript 2.0 Query API in beta as well as several other SuiteScript 2.0 enhancements including new APIs. There are many more features that will help users, administrators and developers to create and manage reliable, scalable and seamless extensions to NetSuite providing competitive advantage.

New SuiteAnalytics Workbook – A New Way to Gain Insights from Your Data

We are excited to announce the new SuiteAnalytics Workbook beta. This new solution enables business users to quickly and easily create complex searches and reports using drag and drop editing. Users benefit from rich visualizations, formatting, charting and layouts, delivering more accurate real-time insights.

NetSuite is a true cloud, multitenant, SaaS ERP solution, which ensures that all our customers benefit from not only the latest and greatest features but also by enabling less disruptive and seamless upgrades.

Enjoy the exciting new release!


Are you already a NetSuite User? Come to our Michigan NetSuite User Group Event on November 7th from 10 AM – 1:30 PM, and learn about the new 18.2 feature and so much more!

Click Here To Register!

TOP FIVE REASONS WHY LEARNING CLOUD SUPPORT IS GOOD FOR YOUR BUSINESS

NetSuite’s subscription-based service ensures continuous learning

A few days of intense training may be enough to get up and running when you go live with a new solution, but over time you may identify gaps in user knowledge. As your business grows, you may see new opportunities that the solution can support but you don’t yet have the in-house expertise to execute.

That’s why ongoing access to training and experts is key to your business success. In today’s fast-paced market, time is a precious commodity.  People need to be continuously learning to keep operations at optimal levels and to innovate.

Learning Cloud Support (LCS) is subscription based ongoing training that enables you to easily and cost-effectively engage in continuous learning. With a wide range of courses that include guided walkthroughs, illustrated real-life scenarios, reference materials, email access to instructors and hands-on exercises—LCS is your key to having the most empowered employees using updated information to drive your success with your NetSuite solution.

The following are the top five reasons why ongoing access to training through NetSuite’s Learning Cloud Support is good for business.


Click Here To Receive The Top Five Reasons…

Navigating the New Lease Accounting Regulations: ASC 842 and IFRS 16

Posted by Tom Kelly, Senior Director of Product Marketing

Now that public companies have adopted ASC 606 for revenue accounting and private companies are on track to do the same by the end of this year, a new accounting change is on the way that will address the way companies account for leases.

These new lease accounting regulations will require strong accounting acumen. The new standards will require organizations that lease assets, or “lessees” to recognize the assets and liabilities of those leases on their balance sheets. The new guidance requires lessees and lessors to recognize assets and liabilities for leases with terms of more than 12 months.

The new regulations still require lease classification as a finance or operating lease, but the new standards will now also require that both types of leases be recognized on the balance sheet.

The new standards are aimed at helping investors and other financial statement users better understand the amount, timing, and uncertainty of cash flows arising from leases. Some confusion still exists around the topic. In 2005, the SEC conducted a survey that estimated the off-balance sheet obligation associated with operating leases for public companies was $1.25 trillion.

To that end, the new standards are designed to improve lease accounting in the following ways.

  1. Providing a more faithful representation of the rights and obligations arising from leases.
  2. Fewer opportunities for organizations to structure leasing transactions to achieve a particular accounting outcome on balance sheet.
  3. Improve the understanding and comparability of lessees’ financial commitments.
  4. Aligns lessor accounting and sale and leaseback transactions guidance more closely to ASC 606.
  5. Provides additional information about lessors’ leasing activities and lessors’ exposure to credit and asset risk as a result of leasing.

In preparing for ASC 842 and IFRS 16, there are lessons to be taken from the implementation of ASC 606. The process of adopting ASC 606 required businesses to gather all customer sales contracts and determine how to account for each component in the contract based on the standards. The process for lease accounting will be similar in approach to ensure that leases are compliant with the new lease accounting regulations.

The new lease accounting standards will be most challenging for dual reporting companies – those who are required to publish their financial information under both international standards – IFRS 16 and US GAAP – ASC 842. Dual reporting companies will need to maintain different processes, controls and accounting systems for each framework to comply with the different lessee reporting requirements.

Once companies have determined how leases should be accounted for, NetSuite can help keep tabs on each lease by uploading them to the NetSuite digital file cabinet. After determining net present value (NPV) and effective interest, you can amortize leases through simple customization by creating a vendor bill for the total capital lease liability and a payment schedule. The payment schedule will prompt a payment to be made based on the scheduled date. The payment schedule will then provide an automated process for the lease payments. Then you can import adjusting journal entries with NetSuite’s import assistant. The journal entries will automatically post monthly adjustments, without the need to manually create multiple journal entries each month.

On a more granular level, let’s see how you would handle this if lease payments of $1,500 are made at the beginning of the period for 10 periods. Our lease calculation for this scenario in Excel is as follows:

Now we create a Vendor Bill in NetSuite for $15,000 (the total capital lease liability), with an accompanying Payment Schedule. Once created the Payment Schedule will prompt for a payment to be made based on the scheduled payment date. The Payment schedule will provide an automated process for payments.

Now you can import an adjusting journal entry with NetSuite’s import assistant. The journal entry will automatically post monthly adjustments, and now there is no need to manually create lease journal entries each month thus expediting the monthly close process.

If the business has requirements to report information under both ASC 842 and IFRS 16, they can separately account for their leases using NetSuite’s multi-book accounting functionality.

In future releases, NetSuite will provide added functionality that will make compliance with the new lease regulations even easier. Functionality for things such as NPV and effective interest calculation requirements will be added.

Effective January 1, 2019 for public companies and January 1, 2020 for privately held companies, the IASB’s and the FASB’s new lease standards will require that almost all leases be reported on lessees’ balance sheets as assets and liabilities. At a high level some of the key aspects of IFRS 16 and ASC 842 include but are not limited to:

CATEGORY
IFRS 16
ASC 842
EFFECTIVE DATE January 1st 2019 December 16th 2018 – Public Companies
December 16th 2019 – Private Companies
APPROACH & COMPARATIVES Full or Modified Retrospective Modified restrospective is required for all leases existing at, or entered into on or after, the beginning of the earliest comparative period.
BALANCE SHEET IMPACT Lessees have the option to exclude ‘low-value’ leases (≤ $5,000 in value), even if they are material in aggregate) No Exemption for ‘low-value’ leases.
LEASE CLASSIFICATION Single Classification Dual Classification – Finance and Operating Leases

Public companies should start the process soon (if they have not already done so) to make sure they will be compliant with the new regulations and disclosure requirements. Private companies have until the end of 2019 to make sure they’re ready for the new requirements – but it never hurts to start sooner.

Learn more about the importance of software in managing lease accounting in this analyst report.

Empowering Manufacturers To Reach Beyond The Limitations Of QuickBooks

“NetSuite’s unified cloud-based business management suite has made a huge difference in our business and has us well-positioned for our next stage of growth.” – Bart Theilen, CFO and COO, Blue Microphones

See Why Manufacturing Companies Switch From QuickBooks To Cloud Financials

Massive changes are sweeping the manufacturing business landscape and are dramatically impacting manufacturers. To adapt in this dynamic environment, organizations must be able to quickly respond to changes in market conditions and customer requirements. Though they recognize this need to innovate, manufacturers have a remarkably difficult time finding business application solutions that can meet their needs in an affordable manner.

Very often, manufacturing companies have been forced to rely upon a hairball of dangerously unreliable spreadsheets that support aging accounting systems. Many are constrained by solutions that were built for a different time, where the accounting system of record was all that mattered and where systems had limited computing capability. The relatively low cost of maintaining those systems masks the cost of inefficiencies in routing tasks like the monthly close or, more importantly, the dissemination of reliable information upon which business decisions can be confidently made in a fast-paced environment.


Click Here To Download the Full PDF | Learn the Quantifiable Benefits…

5 Ways a Merchandise Hierarchy Helps Retailers Increase Efficiency

A merchandise hierarchy is something your customers will never see, but it is a critical tool for running an efficient, successful retail business.

A merchandise hierarchy is exactly what it sounds like – it organizes retail products into a pyramid-like structure. That could start with the company name at the top, then large departments, then silhouettes and finally individual products. Within each level are “nodes,” i.e. the classifications like NORSO, Women’s Wear and Bottoms in the example below. No two businesses are the same, so they can organize their products in different ways and add as many levels as they want.

The primary purpose of a merchandise hierarchy is to support detailed reporting that drives smarter business decisions. Instead of just looking at the number of a single SKU sold and the revenue from that one product, management can see a detailed breakdown of every sub-level from a department like Men’s Tops down to individual items (men’s black/white checkered flannel, for example).

NetSuite allows customers to build merchandise hierarchy reports by any custom field. That means reports can be tailored to exact needs based on what is most valuable for the business, whether that’s breaking down the product catalog by material, color or other attributes.

Ideally, retailers have a user-friendly way to manage this hierarchy – like the hierarchy manager in NetSuite – to add to and adjust as necessary. It’s important to note that the merchandise hierarchy does not affect how the product catalog shows up on the ecommerce website – it’s strictly a back-end reporting tool.

There are countless reports retailers can pull once your merchandise hierarchy is set up properly. Here are five uses that have the potential to make an immediate business impact:

Sales By Item

Every retailer needs an easy way to see how different merchandise categories and specific items are performing. A Sales By Item report is extremely valuable for that reason – it provides a breakdown of every step in the pyramid. For example, it will reveal how much revenue all Women’s Products, Women’s Bottoms, Skirts and individual styles of skirts generated. It also shows how many of each item a company sold.

A Sales By Item report is a simple way to identify the categories and items responsible for the most revenue. That drives better decisions by merchandisers about which products to drop, leave be and invest in more. If Women’s Footwear outperformed expectations the last two quarters, a retailer should consider adding some new styles of shoes. This kind of informed decision-making will help companies stay ahead of the competition.

Purchase By Item

The Purchase By Item report is something that can help buyers on a regular basis. The report displays the quantity of a certain item purchased and the cost for those orders. Just like with the Sales By Item report, it will show the total spend on a department, such as Tops, and a class, like Jackets.

Then, retailers can put the purchase and sales reports side-by-side to see where customer demand does not justify the expenses. If Men’s Jackets account for 20 percent of the total men’s apparel purchasing budget and only five percent of sales, it’s time to re-evaluate. On the other hand, a retailer may need to put in larger orders for a certain skirt that spiked in popularity heading into spring. But that is not so clear without these reports easily accessible.

Current Inventory

While the preceding reports offer strategic guidance, the Current Inventory report will signal more immediate problems. It shows how many products are on-hand and currently ordered at each level in the hierarchy. This is something inventory planners must keep a close eye on daily, because things can change in short order. If a retailer runs a big sale or gets a mention in a major media outlet, inventory could deplete quickly. It’s also easy to see if a particular style or color is selling faster than the rest.

In many cases, the Current Inventory report warns of a potential issue before it turns into an actual problem. Additionally, the report prevents retailers from building up an unnecessary amount of inventory to keep those costs down.

Compare Current and Historical Data

NetSuite also supports merchandise hierarchy “versioning.” This allows retailers to capture snapshots of merchandise hierarchies at different times. Product categories and item locations could change seasonally or annually, and retailers may want reports from that period for future reference. For example, sweaters and jackets may be classified in the “core” category during the fall and winter but in “offseason” during the spring and summer. Those two setups would require two different hierarchies, and versioning preserves both reporting structures for future reference.

Historical data can be valuable down the line. Do the summer or winter offseason products generate more revenue? What are the biggest out-of-season sellers during those two periods? Retailers can answer these questions with access to past versions of the merchandise hierarchy.

Saved Searches

Saved searches are one of the most popular features in NetSuite and the merchandise hierarchy can make them even more useful. When setting up a saved search, retailers can select hierarchy nodes as a filter. These saved searches are a great way to set up a sale for a particular group of products. If a certain category will soon be out-of-season or is underperforming, it’s easy to apply a discount to all the items within that category through saved searches.

The merchandise hierarchy functionality within NetSuite is a beneficial tool that helps retailers increase profit margins, reduce inventory costs and drive sales because you sell the right products at the right time and avoid excess inventory.

For retailers without a merchandise hierarchy, it might be time to explore a new solution like NetSuite to run your business. These are the features that empower you to run a smarter business and stay a step ahead of the competition.

If you are a NetSuite user and would like to learn more about the merchandise hierarchy, you can watch a detailed training webinar. To find it, log into NetSuite, click the Support tab > Go To SuiteAnswers > Training Videos (bottom right-hand corner) > 2018.2 New Feature Training > SuiteCommerce: Merchandise Hierarchy (on last page).

How Does Oracle Cloud Infrastructure Impact NetSuite?

Posted by Brian Chess, Global VP of Infrastructure, Security, and Compliance

It’s been about two years since Oracle acquired NetSuite, and there has been a lot of positive momentum, change, and progress over the last 24 months. And while NetSuite was working on various research and development (R&D) projects well in advance of the acquisition, we’ve since added a host of new initiatives to our proverbial “to do” list.

For starters, we’ve always prided ourselves in the high levels of service that we provide to our customers. As a global enterprise, we know that it’s “always business hours” somewhere on the map, so we operate with a 24/7 mindset. This makes NetSuite unique in that it provides fast, efficient, and seamless upgrades around the clock.

We also invested in Oracle Cloud Infrastructure, the only cloud that can replace the on-premises data center, allowing companies of any size to run even the most mission-critical applications. Oracle Cloud Infrastructure blends all of the advantages of the public cloud with the control and predictability of on-premises infrastructure to deliver high-performance, high availability and cost-effective infrastructure services.

Connecting NetSuite with Oracle Cloud Infrastructure

Designed to take on the most demanding workloads, Oracle Cloud Infrastructure combines compute, networking, storage, database, connectivity, and governance to create a complete, reliable technology ecosystem—all in the cloud.

Now, many of our customers want to know whether Oracle Cloud Infrastructure will impact the processes that NetSuite has had in place for the last 20+ years. The answer is “no.” In fact, Oracle Cloud Infrastructure will only improve our existing processes and speed when it comes to software maintenance and upgrades.

The reasoning is simple: Having a modern, elastic infrastructure will further reinforce and enable our execution.

Better Performance and Reliability

So, how does Oracle Cloud Infrastructure facilitate better performance and reliability? Well, because it’s Oracle, it’s enterprise grade—secure, scalable, reliable, and built for high-performance.

The key differentiators between Oracle Cloud Infrastructure and other providers

To some, Oracle Cloud Infrastructure bears a lot of similarity to other infrastructure providers

While there are certainly similarities between the two—fundamentally, the idea of a cloud-based infrastructure is the same, for example—the biggest difference is that these other vendors expect customers to build applications from scratch on their platform.

Knowing that a lot of customers are using existing software applications, Oracle Cloud Infrastructure takes a different approach. NetSuite, for example, would never rebuild its application from scratch in order to move it to new infrastructure. Oracle Cloud Infrastructure knows this, and allows us to port right into its environment in order to get NetSuite customers up and running quickly on the new platform.

Key Differentiators

Here are two more advantages of Oracle Cloud Infrastructure:

  • It allows NetSuite to deploy additional capacity faster than ever. In the past, we were limited by the size of the NetSuite customer base and operational budget. Today, we can share resources with Oracle (and, because the infrastructure scales as Oracle scales, all of Oracle’s customers).
  • It allows us to deploy upgrades and evolve NetSuite’s service suite. We relied on our own standalone data centers; we had to recycle those computers because we couldn’t allow any of them to go to waste. By moving over to a programmatic way to allocate infrastructure, we can—from the application’s point of view—dispose of a computer and create a brand new one. That gives us much more flexibility with the way we deploy change. It also means that we can be much more systematic about moving forward, versus obsessing over what we’re leaving behind.

Now, contrast this last point with the way NetSuite built its classic data centers. At the time, we were not only pioneering in cloud computing, but we were also pretty good at building classic data centers. It was a big job; we would rack up more than 50,000 frequent flyer miles and take more than six months to get the job done.

By the time we were done, more than 100 people would’ve touched the process across more than 600 individual steps. The network cables alone cost us more than $80,000 (we would have a minimum footprint of 400 servers). We thought it was worth it, but it was a really big effort.

Fast-forward to today and these efforts have all been replaced by a single command. This helps to create unbelievable economies of scale that we pass right along to our customers.

I’ve been working with NetSuite for an awfully long time and during that time I’ve learned that no matter what, there’s always something new around the corner. By focusing on continuous service improvement—and understanding that every event is a learning experience—we discover something new every day, and we get better because of it.

Continuous Learning and Discovery

At NetSuite, we’re always learning and discovering in order to give our customers the best experience and leverage the absolute best results for their own enterprises. We’re proud to serve as a strategic partner for companies across many different industries, and we look forward to even more of that in the future.