NetSuite Control in fast growth

Success Success Success!! It’s great and everyone wants it. But, what if you grow from $10 million to $250 in just 2 years, and you are projecting growth again this year?

That was exactly the issue a client faced. They went from selling out of their car, to the phenomenal growth mentioned above. They made the best decision, they brought in a world class Accounting and Finance team. Their first move, get spending under control. Our team did a quick analysis and developed a strategic plan to get a handle on how money was spent. We acted quickly to enhance the process of invoicing review and approval. We found that too much time was being spent on small invoices. Department heads also weren’t following procedure, so larger, more strategic AP issues were missed. We decided to implement a five month change process. Major improvement updates came to the company from accounting every six weeks.

• July 10 - Instituted the Vendor Ownership process
• Department heads had primary responsibility for their group of vendors
• The department head could still maintain and control their suppliers without accounting "getting in the way"
• They were also responsible for approving any bills from their vendors
• FP&A ownership of vendors
• We then performed an Analysis of Vendors. We asked the following questions:
• Do they follow "our processes?"
• Are they credit worthy?
• Are their terms reasonable?
• August 28 - Enhanced the Purchase Order Approval process
• Added commodity specific approval routings
• Added multi-level approval, depending on commodity and dollar level
• Added transparency to the PO approval process
• Anyone can now review the PO to see what approvals are still needed and by whom
• October 15 - Developed a Second Order Bill Approval process
• Here, our first immediate step was to change the bill approval process. Now, with other processes in place, we were able to add some features to the standard NetSuite Process such as:
• Commodity Specific Approvals
• If these approvals were under a certain dollar amount, the bill does not need to be approved by a department head. A notification of payment was now enough.
• If the bill was service related, then the department head would review, and approve, the bill.
• We also tied bill entry back into the vendor process and asked these questions:
• How quickly does the department head approve the bill?
• Does the AP department get the bill in time to pay it without penalties?
• December 1 - Finally, we were able to develop a process to delegate authority.
• If someone was out of the office, and unable to approve a bill, there was another person available.
• In some cases the Executive Assistants were able to approve certain bills for payment.

After just six months on the new plan, our client was able to see the results.

• The number of vendors was reduced by 35%
• The end of the month AP accrual was reduced from 125 rows down to just 45.
• This client went from hand writing 20-35 checks per week to vendors who had frozen services due to nonpayment, to 100% of all vendors being add to a scheduled check run.

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