Proposal summary

This proposal covers the scope of Netsuite Accounting Optimization and includes the estimated time for setting up the Chart of accounts grouping, Items, Classification. 

Requirement

1. Reduce inventory, sales and COGS accounts in Chart of Accounts.
2. Setup Classes or Departments to track sales revenue and profitability by product categories, by vendors and by sales channels
3. Setup tracking of sales and marketing expenses related to each selling channel, specifically. 

a. For Amazon marketplace, we want to track Amazon collected fees and inbound shipping for this channel

b. For website 1, we want to track google ad spent to acquire visitors to this website and related shipping costs

c. For website 2, also track Google ad spent and related shipping cost

4. Configure inventory items and sales transactions to minimize daily operation manual entries. For our daily online orders of different items coming from the above 3 sales channels, we want to configure the Netsuite system to automatically recognize these SO transactions and items sold from different sales channels for the purpose of reporting and analytics.
5. Avoid impacts of above changes to legacy transactions and prior years financial reports

Our Solution

1. Reduce inventory, sales and COGS accounts in Chart of Accounts.

• We will be reopening the accounting period from 2005. 
• Grouping of old Chart of accounts to single inventory, sales and COGS account.
• Identify the chart of accounts that need to be inactive and make them inactive.
• Updating the asset, COGS account and income account of 9000+ items.

2. Setup Classes or Departments to track sales revenue and profitability by product categories, by vendors and by sales channels

• Item list will be downloaded from the system and add fields for Department and class. Neteon will provide the updated sheet and we will update the time with class and department.
• Custom segments with GL Impact can be used for classification for reporting.
• Body level and line level classification will be enabled. 
• All classification created for the reporting will be made mandatory.
• We will develop a user event script when creating a sales order and this script will automatically populate the classification. 

3. Setup tracking for sales channel related direct expenses

• Marketing expenses will be recording manually in Netsuite 
• To identify the sales channel related expense, we will be enabling the custom segment in journals and setting up custom segments.
• Update the transactions in the current financial year with the classification created.

4. Configure inventory items and sales transactions to minimize daily operation manual entries.

• To  configure the Netsuite system to automatically recognize the SO transactions and items sold from different sales channels, we can use the class or custom segments while the SO is created from the sales channel.
• Identify the segmentation for each Sales order created from the Sales channel.
• Setup the item records for using the classification in the line level of the transaction.
• We will develop a user event script when creating a sales order and this script will automatically populate the classification from item record to the line level of the transaction.

5. Avoid impacts of above changes to legacy transactions and prior years financial reports

• After reopening the period, we will be updating the GL codes in the item record and this will affect the transactions GL impacts. 

Assumptions

• The configurations and setup will be firstly done in the RP environment.
• The estimated time might fluctuate based on the data.
• Backup of the reports will be generated by the Neteon team. 
• Period closing will be done by the Neteon after re-opening the accounting period.