Wise Accounts Receivable with NetSuite
by Jash Chatterjee
January 27, 2017
Audit Controls on Accounts Receivable: Using your NetSuite Application wisely
NetSuite allows every company to use the system in its own way. This means that unless your implementation consultant was well-versed in accounting best practices the full permissions available can cause the system to be wide open.
Here are some tips for access and permission control via custom roles that can make your NetSuite Implementation succeed with the strict accounting practices required in the UAE and Middle East.
1. A senior role should approve Payment Terms:
This can be achieved by creating access control on the Payment Terms field of the customer. The Payment Terms could be locked down on the Invoice for good measure. If your company has a Controller, she should be the one approving Payment Terms for every new customer. In addition, Payment Terms should be required on invoices.
2. High Value Invoices should be Approved:
Invoices of high value - the threshold will vary from company to company - should be approved and proof read by an Accounts Supervisor. This can be managed by activating a simple Invoice Approval workflow.
3. High Value Credit Memos should be Monitored:
Credit Memos of high value can potentially change your Accounts Receivable number significantly. Your NetSuite Administrator should create a weekly report listing Credit Memos with details of values and customers they are being applied to. It will make sense to separate the permission for creating Credit Memos from the Accounts Receivable person and only allow Credit Memos to be created after verbal approvals from a manager.
4. Cash Payments should be Monitored:
Your NetSuite Administrator should create a weekly report listing Customer Payments in cash with details of values and invoices they are being applied to. It is best to separate Credit Memo and Customer Payment permissions.
5. Monitor Manual Journal Entries:
NetSuite allows you to create manual journal entries posting directly to accounts receivables, bank and cash accounts. This can be monitored by creating a custom approval workflow for such journal entries or simply designing weekly or daily email alerts to managers.
6. Match Sales Orders to Invoices:
NetSuite lets users modify Sales Orders. To make sure invoices and deliveries match, it might be a good idea to lock Sales Orders after they have been billed. Or, a simpler solution is to create a report showing edits to sales orders which have been billed.
To summarise, here are three staffing tips for your accounting team:
1. Segregate Duties of Petty Cash with Delivery Management and Accounts Receivable being distributed so as to create a self-auditing Accounts team.
2. Create a system of Internal Audit using saved searches and reports using the Cash and Bank Register and A/R Aging reports as three-way checks.
3. Allow access minimally making sure roles have access to only the tasks that relevant for them. Create access for each accounting profile rather than one role for the whole team.
The reasons for locking a system are many - locking allows staff to complete their jobs without too many decision points. That actually makes their work lives easier. The more the options are, the lower the data entry speed is going to be.
Locking allows management to not have sleepless nights wondering if critical items are being managed in an error-free way. After all, this is why management invested in an ERP like NetSuite in the first place.
Locking allows clean record keeping in the system allowing for the data to reliable, easily analysed and helps achieve business analysis and reporting goals.
Give us a call if you need your NetSuite Accounting set-up audited. We are happy to do a free health check and suggest improvements.