Accounting serves as a structured method for collecting and organizing information to facilitate informed group decisions. It plays a vital role in monitoring the overarching targets or goals of the organization. The concept of “accounting” can also be dissected into various reporting frameworks within the organizations. This framework delivers pertinent information to crucial business sectors of the firm. The discipline of Accounting can be broadly categorized into three primary sections: Management Accounting, Financial Accounting, and Cost Accounting. These distinct types of accounting are essential for ensuring clear insights into business performance. The Enterprise Resource Planning (ERP) system integrates functions and formulas to guarantee accurate and reliable outcomes. Oracle NetSuite has addressed this need and encompasses all three types of account extraction in NetSuite as detailed below:
Financial Accounting in NetSuite:
- Includes built-in Balance Sheets, Income Statements, and Cash Flow reports. These documents provide an accounting trail of the financial accounts in their hierarchy.
- Features a Double Entry System that captures accurate debits and credits, ensuring proper accounting impacts to the allocated subsidiaries in Journal Entries.
- Adheres to Auto-Balancing in Journal Entries, meaning NetSuite does not save any Journals that lack equal debits and credits.
- Maintains a Chart of Accounts with a Parent-Child Relationship and employs number sequencing to organize accounts under a single Header.
Management Accounting in Oracle NetSuite:
- NetSuite incorporates Statistical Accounts that do not influence the company’s Financial Reporting. These accounts enable management to monitor the non-financial elements of the organization, such as Employee Head Count.
- NetSuite provides a catalog of custom Saved Searches to extract information organization-wide. This allows for restricting results to specific individuals to maintain security and confidentiality.
- The platform features customizable dashboards with KPIs, trend graphs, and portlets, allowing for the effective communication of significant organizational data all at once without extensive reporting. For example, Weekly Sales analysis scenarios.
These dashboards can additionally be published for employees with specific roles and can be secured accordingly.
Cost Accounting:
- NetSuite includes a Budgeting function that offers insights into expenditures. These projected expenses can be segmented into monthly periods for a more transparent view of the monthly budget limits.
- NetSuite also provides a variety of out-of-the-box Cost Accounting reports, categorized using classification elements such as division, class, and departments. These reports also present Budgeted versus Actual variances.
- Furthermore, NetSuite facilitates Bundles for enhanced Cost Analysis, contributing to the organization’s SOX reporting.
NetSuite adeptly addresses all three levels of accounting with remarkable precision.
