Proposal Summary
The proposed solution aims to integrate a customized reward system into NetSuite. This program will automatically grant credits to customers based on their membership tier and reward level. The solution will consist of three tiers (PARTNER, AFFILIATE, ASSOCIATE) and five reward levels within each tier (STANDARD, SILVER, GOLD, PLATINUM, DIAMOND).
Deliverables
This proposed solution involves the development and implementation of a reward program within NetSuite, referred to as the “Crystal Points Reward Program.” This program will automatically provide rewards to customers in the form of credits based on their membership tier and reward level. The project encompasses the following key areas:
Reward Configuration:
We will create a custom record within NetSuite specifically dedicated to storing the reward configuration. This record will include detailed definitions of membership tiers (PARTNER, AFFILIATE, ASSOCIATE) and reward levels (STANDARD, SILVER, GOLD, PLATINUM, DIAMOND).
The reward percentages for each tier and level, along with the corresponding sales thresholds, will be defined and maintained in this custom record.
Notably, this custom record empowers Crystal Tones to adjust the reward configuration seamlessly. Whether it’s altering tier definitions, modifying reward percentages, or revising sales thresholds, Crystal Tones can effortlessly manage these settings by editing the custom record.
Reward Calculation:
We will introduce a checkbox within the Invoice record, named “Initiate Reward.” This checkbox should be checked by the user after the entire process, including any returns and refunds, has been completed.
When an invoice is generated in NetSuite and its status is updated to “Billed,” while the “Initiate Reward” checkbox is checked, the system will assess its eligibility for rewards based on the customer’s membership tier and reward level. This will take place on the scheduled process which will run every 6 hours in a day.
The invoice will undergo validation to ensure it meets the criteria for reward calculation.
Eligible invoices will progress to the next step.
If Crystal Tones determines that a particular invoice is eligible for rewards and is also Billed, indicating completion of the process, they can simply check this “Initiate Reward” checkbox and save the Invoice record.
The calculated reward amount will be generated as a credit memo within NetSuite through a scheduled process. This credit memo represents the customer’s earned rewards and is securely stored within the system.
The system is thoughtfully designed to automatically apply the generated credit memo to the invoice or cash sale of the next transaction.
The system will calculate the reward amount for the eligible invoice. Importantly, we will base the reward calculation on the invoice amount after excluding any refunds, ensuring accuracy.
Upon the next transaction, the system will apply the generated credit memo to the invoice or cash sale, reducing the amount owed by the customer.
Credit Memo Creation:
To facilitate the application of rewards, the system will generate a credit memo. This process will be scheduled to occur after the checkbox “Initiate Reward” is checked, ensuring that rewards are added only when the scheduled process is executed.
To facilitate this, we will create a dummy item labeled “Reward item” which will be utilized in the creation of credit memos. This item will be instrumental in accurately representing and tracking the rewards associated with each customer’s transaction.
Customer Notification:
Upon the creation of a sales order, the system will display an alert to the customer in NetSuite’s UI, informing them that their order is eligible for the Crystal Points Program, based on the invoices generated and rewards created.
Moreover, a notification will appear during the modification of invoices, confirming eligibility for the reward upon satisfying the specified criteria. Users are advised to check the checkbox “initiate reward” for the application of the reward. This notification will only appear during the editing and saving of the records. No notification will be displayed to the user unless the invoice is being edited and saved.
Handling Invoices:
Upon invoice creation, the system will automatically generate a payment record for the invoice if there are any Reward credit memos available for the customer, calculated based on the eligible amount from the Reward.
Handling Cash Sales:
In cases where a cash sale is initiated, the system will generate a payment type item associated with an accounts receivable (AR) account.
This payment item will be automatically added to the cash sale transaction, allowing the system to apply the applicable credit memo reward.
Within the transaction, after all items are recorded, the payment type item will be added, and the corresponding credit amount will be entered with a negative sign to indicate a reduction in the total balance
By applying the cash sale in the reward credit memo, the credit will seamlessly apply to the specific cash sale amount.
Furthermore, in the context of cash sale creation, we will ensure that the cash sale is in the “Deposited” status and is eligible for rewards (including the check box). Credit memos will be generated based on the eligible amount.
Reward Expiry:
The Crystal Points Program will operate on an annual cycle, aligning with the calendar year from January 1st to December 31st.
Credit memos generated as part of the program will be configured to automatically expire at the end of each calendar year. This approach ensures a fresh start for customers in the new year.
Reward Expiry notification:
We will implement a robust notification system within NetSuite to remind both sales agents and customers about their available rewards.
Notifications will be sent out 30 days and 60 days after the issuance of rewards, encouraging customers to utilize their credits.
Additionally, a special notification will be scheduled for December 1st to remind customers about any remaining credits before the year-end.
Regarding the content of the email, we will create three different email templates in NetSuite. With the three different email templates set up, users can use them for notifications scheduled at 30 days, 60 days, and year-end intervals.
A 30-day notification template.
B 60-day notification template.
C Year-end notification template.
These templates can be modified to adjust the contents based on the user’s perspective.
Customer Eligibility Requirements:
To maintain active participation in the Crystal Points Program, customers must meet a minimum spending threshold based on the initial amounts defined in the custom record as per the corresponding Tier with the Invoice Amount.
Whenever invoices are generated, we will apply the corresponding credits according to the customer’s tier level and the transaction amount.
Year-End Voiding of Credit Memos:
As the year ends, we will implement a scheduled process to void any unapplied credit memos.
On the last day of December, we will review all credit memos and edit them to set the reward item amount to zero. This action effectively voids the credit memo.
For partially applied credit memos, we will edit the item amount to match the remaining unapplied amount, ensuring accurate accounting and preventing any discrepancies.
Tier and Reward Structure:
PARTNER Tier:
STANDARD: 12% reward on sales between $15,001.00 and $100,000.00.
SILVER: 12.50% reward on sales between $100,001.00 and $300,000.00.
GOLD: 13.50% reward on sales between $300,001.00 and $600,000.00.
PLATINUM: 14.50% reward on sales between $600,001.00 and $1,500,000.00.
DIAMOND: 16.50% reward on sales of $1,500,001.00 and more.
AFFILIATE Tier:
STANDARD: 6% reward on sales between $15,001.00 and $100,000.00.
SILVER: 6.3% reward on sales between $100,001.00 and $300,000.00.
GOLD: 6.8% reward on sales between $300,001.00 and $600,000.00.
PLATINUM: 7.3% reward on sales between $600,001.00 and $1,500,000.00.
DIAMOND: 8.3% reward on sales of $1,500,001.00 and more.
ASSOCIATE Tier:
STANDARD: 3% reward on sales between $15,001.00 and $100,000.00.
SILVER: 3.1% reward on sales between $100,001.00 and $300,000.00.
GOLD: 3.4% reward on sales between $300,001.00 and $600,000.00.
PLATINUM: 3.6% reward on sales between $600,001.00 and $1,500,000.00.
DIAMOND: 4.1% reward on sales of $1,500,001.00 and more.
Reporting:
We will develop a report that provides insight into year-to-date financial activities, displaying the customer’s current Tier and their accumulated rewards.
Customer Centre role enhancement:
Within the Customer Center role dashboard, we are introducing a specialized report to empower customers with convenient access to monitor their allocated credits within the reward system. This dedicated report will be exclusively published for users with the Customer Center role.
Customers with this role will gain visibility into essential account information, including orders, quotes, and other pertinent details. Specifically, they will have insight into credit memos generated through the reward program, as well as details of invoices and cash sales linked to these rewards.
Assumptions
- For each Invoices and cash sales, we will be creating individual credit memos.
- These credit memos created will be exclusively for the reward program.
- As we are waiting until the Invoices/Cash sales are Billed/Deposited and Initiate Reward flagging, we will not consider return instances.
- We are not considering the scope of sub-customer relationships in this phase. The credits will be applied individually.
- The entire customization will be from NetSuite’s side, without considering functionalities related to web services.
- The credit memo will be created for the invoiced amount only.
- This solution is implemented as a new reward program.
- Finalized reward structure and rules.
- Journal entries will be created form the credit memo details.
- Accounting Period will be open for voiding the credit memos by updating the amount.
- The notification to apply the reward will only appear during the editing and saving of the sales order. No notification will be displayed to the user unless the order is being edited and saved.
Risks
- Real-Time Credit Memo Generation: There is a risk that credit memos may not be generated in real-time. Since credit memos are created as part of a scheduled process.
- Accounting Period Closure: To void credit memos, it is essential to have the accounting period open. Standard NetSuite behaviour restricts the editing of credit memos in closed accounting periods. If any credit memos remain open after the notification to apply for the credits from January and the accounting period is closed, they cannot be voided.
- Handling Cash Sale Scenarios: Closed accounting periods can also pose challenges in applying credit memos to cash sale scenarios. If the accounting period is closed and cash sales need to be processed with applied credits, it may require special handling or adjustments.
- Sub Customer relationship: The parent and sub-customer relationships is not considered in this phase. The credits will be applied individually.
- Platform Support: The proposed solution is particularly designed to handle the Order through NetSuite UI. The eCommerce application can only be finalized based on the platform and the NetSuite sync with that platform.
- The processing of credit memos and voiding at the year-end will only be feasible if the transactions are within the open accounting period. Failure to adhere to these accounting period restrictions could impede critical financial operations and year-end financial processes.
Questions
- Could you please provide us with the specific AR (Accounts Receivable) account that should be assigned when creating the payment item record for cash sale scenarios?