In our new video, 8020 Consulting’s Julian de Luna and David Lewis discuss NetSuite features and capabilities that are often underutilized and underleveraged. Watch to learn common issues, misconceptions and forward-looking opportunities of one of the most commonly implemented financial systems around.
We’ve posted the full discussion below along with the full audio, but if you’re in a rush, you can also skip through the playlist for shorter segments featuring key questions.
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We’ve also included the transcript (with time stamps) below for convenience. Happy viewing, listening, and/or reading!
Introductions (00:00 – 03:13)
David Lewis: Hello everybody. Thank you for joining this soon-to-be riveting discussion—and I actually mean that—about NetSuite. My name is David Lewis. This is my colleague Julian de Luna. We’re both with 8020 Consulting, as you may know.
The reason we selected this topic is that NetSuite, out of all the financial applications that we are familiar with—which is essentially all of them—NetSuite is the most widely used accounting and ERP package among our clients, particularly among emerging growth and technology companies and even mature software, hardware companies, et cetera. And there are reasons that it is widely used. What’s interesting is that it also seems to be the most massively underutilized or underleveraged piece of software that we have seen. We frequently hear from our clients that there are very basic things that they haven’t been able to execute on the software.
We also find there to be a modest amount of awareness at best about all the things that this software can actually do. Our hypothesis here is that a greater understanding of NetSuite’s capabilities will do several things. Number one, allow you to enjoy more benefits of automation and make the lives of your team better and easier and more interesting; it will make your company more scalable and effective; and you will probably also save money on software. And here’s why: because there are capabilities that NetSuite has in particular areas that people are not as familiar with, and because of that lack of familiarity, people go out and buy other pieces of software to bolt onto or integrate with NetSuite.
So, I have with me, Julian de Luna. The reason we have Julian here is that out of our hundred people, he is one of the top one to three NetSuite gurus we have. In his five plus years with the company, he’s worked on four different engagements. All of them were various phases of NetSuite. One was a start-to-finish implementation at a complex multichannel consumer products company. Another one was an already live, but in need of remediation, NetSuite environment in a multi-hundred-million-dollar equipment rental business. The next was really about expanding and broadening the applications and use of NetSuite within a high-growth, $20-million and recently purchased electric vehicle charging infrastructure company. And he’s currently on a project at a $130-million high-growth app company. And so, I introduce to you Julian de Luna.
Common Problems with NetSuite (03:14 – 04:53)
David: I have some questions for you, Julian, and I’m going to let you do most of the talking today. The first is: What are some of those common problems you’ve seen NetSuite users experience?
Julian de Luna: I think actually the most common problem that NetSuite users have is basic training and reporting and navigation. So, for example, a stock income statement rarely has enough information for you to do any thorough analysis. So, users often don’t know which fields to pull, how to find those fields, et cetera.
And even once they actually find those fields and know how to customize a report, they often don’t publish a version to their team. So multiple people within that team continue to modify the existing stock P&L over and over and over again. So, there are ways to save it and publish it and gain those kinds of efficiencies in that reporting.
David: Sounds like something that I would be very interested in doing if I had that problem. What else are you thinking about in terms of answers to that question?
Julian: Even in terms of basic navigation, for example, users like to look at invoices by vendor. So, the common way of doing it is to go through the vendor record and look at the invoices or transactions associated with that vendor. Instead there are ways around it, like creating a saved search, a saved search by invoice with a filter for vendors. So, you can pull the same report, but use it for multiple vendors. There’s lots of little tips and tricks in NetSuite customization like that to help that day-to-day.
David: In the companies that you’ve seen, are they often not doing that?
Julian: They’re often not doing that.
Gaining Efficiency with NetSuite (04:54 – 08:10)
David: Okay. All right. That’s great. For some of the more experienced users, are there any other ways in which the system can be used to improve efficiencies in day-to-day accounting operations?
Julian: Yeah. There’s tons of stuff.
A few examples off the top of my head. You can set up notifications for internal users for things like purchase order creations. And those people might not necessarily be part of the approval process, but they need to be informed of those, that those transactions were created. So, you can set up, you can set up notifications to those internal users.
You can set up approval workflows to make sure that people within the departments are seeing invoices, for example.
You can set up email notifications for things like remittance advice.
And a lot of these things that help the day-to-day don’t actually need to be—you don’t need to actually have any development or coding experience to do these things. You just need some training and, you know, a little bit of ability to configure the system.
David: That’s great. Good. Okay. And then, NetSuite users, the impression I have is that there’s a lot they can do on their own that they may not know about. And, they also may not know what some of the capabilities are of NetSuite beyond some of the basic blocking and tackling and accounting. So, can you talk a little bit about some of the more complex processes that you’ve been able to implement and execute through NetSuite?
Julian: Yeah, I think some of the more complex processes actually require NetSuite engagement and maybe a solutions architect in house. And some of the things that I might be describing, like automating financial processes with NetSuite including subscription billing, for example, or schedule billing, which is decoupled from Rev Rec. And Rev Rec is actually another process that can be a little bit complex on the get go. And this includes handling multiple Rev Rec principles from anywhere from inventory to software. NetSuite also can handle projects, and ultimately project profitability, time-tracking, even demand planning and supply chain management.
David: Wow. Where have you—can you give me an example of some of the warehouse management application of NetSuite and/or what you integrated it with to get that operational?
Julian: Yeah, there was a client who was using a homegrown inventory management system that was connected to warehouse facilities. But it was decoupled from their finance, from their accounting system, right? Their accounting system at the time was QuickBooks, and they were switching to NetSuite. NetSuite has the functionality of managing inventory in different warehouses in different countries. And then it immediately interacts with the financial statements. So, eliminating that homegrown system and then having that direct integration with all the warehouses and picking and packing and fulfillment and all of those processes were within the system.
David: That’s great. Very good for those of our clients who are e-commerce for example, or just really anybody who’s manufacturing or distributing a product.
Technical Support, ASC 606 and Advanced NetSuite Features (08:11 – 14:29)
David: Can you talk about the—one of the things that people like about cloud-based software is that hypothetically it requires, I guess, a less technical expertise on the part of the company’s IT or programming staff, so that they have time to work on product and other customer-facing, revenue-generating activities. As we all know, if somebody in a company’s IT or programming area has a choice between working on accounting and reporting projects and product, or new product development, they usually choose the latter. And so that’s a concern or issue I’ve heard from many CFOs.
So, for some of these more complex processes, do these require either internal or external IT people or programmers to come in and do this stuff?
Julian: Yes and no, but at the same time, I think accounting teams really can handle or at least maintain most of the NetSuite solutions. I think that’s some of the strength of NetSuite. You don’t actually need to be, you know, a hardcore developer to handle some of these things, especially to maintain it, but it does get a little complicated. So, knowing the general architecture of the system is helpful, and this includes records, record types, list segments, and how those—how that data is organized and those records are organized.
And I think to piggyback on that a little bit, the dependencies across those records and record types. Rev Rec journals, for example, you can press a button, right? And then it will create the Rev Rec journals. But then also what’s happening in the backend are plans and arrangements and elements are all getting created—there’s backend processes. So, having an understanding of how these are created and how that data is organized is helpful. But again, you don’t necessarily need development or IT background to do this.
David: Okay. Yeah. I want to ask about that because a lot of our clients have gone through what I would call Phase One of ASC 606 compliance, which is to say that they are technically compliant, but the solution that they’ve implemented is often not a purpose-built software. So, the first wave of implementations in many cases were done by public accounting firms because technical compliance was required. However, those solutions are not scalable. As bundles, pricing, configuration of the service offering, acquisitions take place, those revenue recognition models are going to become unstable or not useful at all. And so, the next wave that we see in 606 will be implementing more scalable software solutions. There are some out there that are purpose built, but my understanding of my conversation with you is NetSuite has pretty robust capabilities in this as well. I’ve heard different things about that. What are your thoughts?
Julian: I think so. I think definitely as we navigate through the migration to ASC 606, I think it would be helpful to have—for most companies to have a solutions architect that can engage with NetSuite. A lot of these things are navigating new territories within the way that the system handles it.
But after speaking with a number of people within NetSuite, I do know that there are solutions built. For example, software and all the different configurations as it pertains to ASC 606. Every company is different obviously, but I do know that there are solutions that are available in NetSuite.
David: OK, I think the answer is probably before you go purchase and work to integrate a revenue recognition software solution, first find out if your existing ERP has those capabilities.
Julian: Absolutely. Certainly.
David: All right. So where do companies go to get this type of information, the information to inform these more leveraged uses of the system, especially the current team doesn’t have that knowledge base already?
Julian: I think ultimately a dedicated resource to help implement the solution and get this information is key. Somebody who’s not necessarily bogged down with the day-to-day of closing books who could really focus on scoping, configuration testing and developing training materials. That knowledge transfer is key, right? So, ultimately that dedicated resource who can provide training materials, communicate solutions, offer ways to debug and really empower the accounting team to be self-sufficient after that dedicated resource leaves.
David: If only I knew somebody like that. Oh wait, Julian—
Julian: I don’t know.
David: Well, one thing I do want to say is that—in fact, I had a conversation today about a company that’s doing a NetSuite implementation. There are really difficult implementations, but there are no easy implementations, especially if you try to do all of the functional project management work yourself. What we see a lot of is that a company brings in a technical integrator with NetSuite—it’s actually the NetSuite implementation team, you know?
But NetSuite is a software company. So, they alone are not going to be able to run the entire implementation. And so the functional subject matter expert piece, absent somebody from the outside, is going to fall on the existing accounting and finance team, for whom there are day-to-day job duties that are probably already 50 to 60 hours a week of things that are always more urgent than the implementation. So, the implementation will get inadequate attention. And what we see is that therefore 70% of the way through, perhaps the users are doing some preliminary user acceptance testing. And all of a sudden, there’s a realization that the construction project, which was this implementation, needs to be started again.
Concluding Remarks (14:30 – End)
David: So, having somebody—some companies are able to actually free up more of their own team to work on these things full time, we don’t see that that often—but having somebody who can really be the emissary or quasi-clone of the Controller, who can work on these projects, who can help hold the software company and the technical integrator accountable, and also who can be there to train the users and particularly the post-go-live hypercare work that I know you’ve done, Julian. I think that’s critical because after the system goes live, and also through at least the first month-end close, a lot of issues are going to come up. If people are not trained well, and if they’re uncomfortable using the system, then there will be errors in the first month.
And so even if there were not implementation problems, there are going to be transaction processing problems that can arise from inadequate training that will then show up in the reporting for the first and second and other months. So, this post-go-live hypercare role is vital, as is the development and also guide to the location and use of training materials.
So, I think we’re going to wrap up, but what I would say is this: Implementations can be great experiences, but they’re challenging experiences and they can also be horrible experiences resulting in things like implementation fatigue and the termination of the implementation. Going most of the way through an implementation and having to do a fairly complete rebuild or in the worst-case scenario going live. And we’ve seen companies almost get shut down when there is severe dysfunction with the software and users’ knowledge of it. So, the good news is these types of adverse outcomes can actually be avoided. And whether the person comes in from our company or from some other organization, we strongly encourage people to do a careful review of how they’re resourced going into the implementation and post-go-live if they would like to have a survivable and actually prosperity-inducing experience.
So, with that, we will close. Julian, thank you so much for sharing your thoughts, time, energy, and brain with us today.
And thanks to all of you who tuned in. Have a great day.
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About the Featured Consultant
Julian has diverse finance and accounting experience in various industries including financial services, entertainment, consumer electronics, and consumer products with companies including Capital Brands, Video Equipment Rentals, Belkin International, Deluxe Entertainment, and Pacific Life. His expertise includes FP&A, budgeting and forecasting, financial modeling, financial process improvement, financial system implementation, treasury operations, and cash flow forecasting. Julian holds a Bachelor of Science in Business Administration from the University of California, Riverside and a Master of Business Administration from the University of Southern California.