The NetSuite integrated business management solution has so many features and capabilities, that it can be easy to overlook the benefits of the ERP’s basic functionality. If you are a current NetSuite user, this series of articles is designed to highlight some native features of the ERP solution. If your organization’s technology system does not offer these capabilities, we encourage you to contact the GYF ERP Solutions Team to learn more about NetSuite.
The release of ASC 606 significantly changed the requirements for revenue recognition and reporting by companies across all industries. Many legacy ERP systems are unable to maintain accurate records to enable companies to accurately report revenue and stay compliant with regulations. NetSuite’s Advanced Revenue Management module offers features to automate recognition, reclassification, and reporting, while maintaining ASC 606 compliance for both public and private companies.
Configuration
NetSuite allows for the setup of pre-defined revenue recognition rules that dictate the methodology used to recognize revenue for items. Rules can be set up for different time periods of recognition (i.e., if you have some products that recognize over 3 months and others that are 12 months), different triggers for recognizing revenue, varying amounts to be recognized initially, and different offset periods before recognition should begin.
Recognition
Depending on the revenue recognition rules set up on items and tied to transactions, revenue can be automatically posted to deferred revenue when transactions are created. As performance obligations are fulfilled, revenue can be automatically recognized via scheduled journal entries. Alternatively, revenue recognition can be triggered manually as part of the month end control process to allow for more time for review and verification of transactions.
Reporting
Robust reporting of deferred revenue, recognized revenue, and reclassified revenue are provided as native NetSuite reports. Deferred and recognized revenue by customer and item, as well as deferred revenue waterfall schedules pull all information in the system to provide a complete understanding of revenue recognition in NetSuite.
NetSuite’s OneWorld solution streamlines financial management and reduces IT costs, allowing you to manage a multitude of entities with a unified platform, and perform critical month-end processes with ease. Each NetSuite component is modular, enabling it to be deployed and integrated with existing investments as required to easily scale and future-proof your business with an agile platform that evolves as your needs change. Contact a GYF ERP Consultant at 412-338-9311 to maximize the return on your technology investment.
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