Internal Controls that Require Basic Configuration

The following controls require some basic setup in the NetSuite UI.

• Accounts Receivable

  Open receivables identified by user-defined conditions, such as large invoices or exceeding the credit limit, are automatically identified and routed for review.

• Financial Close

  • The amount of expense to be amortized per month is automatically spread based on the amortization schedule prepared by A/P.

  • NetSuite uses the specified allocation percentages to allocate expenses to different departments automatically.

  • Without an approved role, you can't open or close sub-ledgers (A/P, A/R, and Payroll) or the general ledger.

  • NetSuite automatically creates elimination journal entries for intercompany drop-ship workflow transactions.

  • NetSuite automatically reconciles intercompany accounts.

• Commissions

  • NetSuite automatically calculates eligible commission amounts monthly based on the plan type linked to the participant (employee or partner).

  • After a commission is approved, NetSuite posts it to A/P and the general ledger, and auto-populates it for the payroll run.

  • NetSuite calculates and processes commissions according to standard compensation agreements.

• Fixed Assets

  • You can't edit the Fixed Asset Module without an approved role.

  • NetSuite Fixed Asset Module calculates monthly depreciation based on the asset's cost, method, and useful life.

• Human Resources and Payroll

  • You can't edit the Payroll folder, which contains the Payroll Worksheet, without an approved role.

  • NetSuite auto-populates employee hours and expenses after appropriate approvals are obtained in the system.

  • After a payroll is committed, NetSuite automatically calculates and posts related taxes, benefits, bonuses, and commissions to the general ledger.

• IT General Controls

  • NetSuite checks for duplicate contact and customer records and sends notifications if such records are found.

  • You can limit employee access by IP address.

• Order to Cash

  • NetSuite automatically creates a general ledger journal entry for approved credit memos.

  • NetSuite automatically generates a journal entry for approved batch payment postings.

  • After all payments from a bank batch are applied, NetSuite performs a deposit activity and generates the related journal entry.

  • When payment from the bank for a single activity is applied, NetSuite performs a deposit activity and generates a related journal entry to accounts receivable.

  • NetSuite automatically adds approved unbilled T&M hours for invoicing.

  • NetSuite only allows fulfillment and shipment of inventory if the following conditions are met:

    • Sales order is in Pending Fulfillment or Partially Fulfilled status and isn't on hold for any reason.

    • Part numbers of items being fulfilled match part numbers on the Sales order and the quantity being fulfilled doesn't exceed the quantity on the sales order.

    • For serialized inventory items such as switches, each fulfilled serial number matches a serial number that exists in finished goods inventory.

  • NetSuite automatically calculates and applies shipping amounts to transactions based on rules.

  • You can't approve a vendor without a 1099 or W2.

• Procure to Pay

  • NetSuite automatically routes a PO for approval based on the approval policy set. Only properly approved POs can be processed for invoicing.

  • Spending thresholds on POs are built into a workflow as required by governance.

  • Spending thresholds on non-PO spending are built into a workflow as required by governance.

  • Only pre-approved vendors can be used in purchase orders.

  • Vendor information updates are automatically sent to designated approvers for review.

  • Non-inventory purchase requests are automatically sent to the relevant reviewer/approver for approval.

  • Inventory purchase requests are automatically sent to the relevant reviewer/approver for approval.

  • NetSuite automatically performs a three-way match for POs that have lines mapped to item receivable general ledger accounts. The control is configured at the item-level. If any item quantity or price doesn't match, an error message is displayed, the invoice isn't posted and placed in Pending Approval status in NetSuite.

  • Expense reports are automatically sent to the employee’s manager and, after approval by the manager, to A/P for review and approval. After approval by the employee manager and A/P, the expense report is marked for payment.

  • Purchase requests and expense reports are sent for approval based on set limits.

• Revenue

  • The relative fair value allocation at the time of an invoice is applied. The allocations are based on the relative fair values for all line items in the invoice based on the BESP data contained in NetSuite.

  • On invoicing, NetSuite creates a service amortization schedule for all of the service line items on invoice.

  • NetSuite defers revenue and the related COGS per terms and conditions set out in the customer primary file. These terms include rights of return, acceptance, shipping terms, and others.

  • NetSuite automatically recognizes and defers revenue based on the Revenue Recognition Policy. (Note: The Revenue Recognition Policy must be set up in NetSuite for each item.)

  • NetSuite recognizes revenue on a monthly straight-line basis, prorated daily basis for the first and last month, for subscription and support revenue based on the provisioned date, contract start and end dates, and revenue recognition schedule.

• Sales Force Automation

  • You must have a specific role to access the Compliance 360 SuiteApp.

  • Compliance 360 provides you with a complete, 360-degree view of the customer, including their transaction history.

General Notices