Carrying the world on your shoulders can be a heavy burden, but that burden gets lighter when you’ve got the right tools in place. Ask any CFO of a global company with legal entities in multiple countries, and they can tell you how working with multiple currencies, international accounting standards, and in many cases multiple charts of accounts can complicate things. Even if you’re a U.S.-based company with no overseas operations, it’s worth planning for the time when your company’s growth expands past domestic boundaries.
Let’s take a quick look at how some of those global business challenges play out, and how NetSuite can help shrink those challenges to a manageable size.
A World of Hurt: Pain Points and Challenges for Global CFOs
Global consolidations can be especially difficult. The process of compiling all your data and then bringing it together into a unified report can be particularly tough if you don’t have a robust ERP system where you can house all of your international entities in one place.
Managing multiple currencies can be one of the biggest headaches for companies with subsidiaries around the world. Even if your company is just starting to grow, it’s likely that you already have customers or vendors outside the US who are paying in other currencies or would like to.
If you don’t have a system that can automatically handle the conversions for you, you’ll end up having to track everything manually in spreadsheets, which is not only a headache and a time-drain, but can also lead to errors, missed revenue, and reporting problems.
Another area where global operations can spin out of control is the chart of accounts. A small domestic company may only have a single chart of accounts to manage, but multiple entities often require separate charts of accounts. And once you’ve got more than three or four of those, it can quickly become time-consuming and stressful to reconcile all the data, make sure you’re tagging everything appropriately, and then create an accurate consolidated report across your business.
Complying with international reporting standards is another potential hurdle. U.S. companies need to comply with GAAP standards, whereas IFRS standards come into play internationally. Depending on which entity you’re reporting to, you may need more than one set of records, which can create a lot of extra manual work that may be difficult to do accurately and efficiently.
A World of Solutions: How NetSuite Helps You Master the Map
Fortunately, there’s a solution that addresses all the challenges outlined above and puts the answers at your fingertips: the cloud-based NetSuite ERP platform.
With NetSuite, you can standardize your chart of accounts, and the platform can perform your currency conversions in the background, smoothly and efficiently. In fact, NetSuite truly excels at helping finance teams manage multiple currencies.
You can store all your international entities in NetSuite as well, which makes the financial close much easier. This allows Controllers to take financials that are in different currencies and revenue positions, and then consolidate that data into a unified financial statement that’s easy to parse and easy to share with their team.
There are a couple of tools that NetSuite offers that particularly address the needs of companies that conduct international business: OneWorld, Subsidiary Navigator, and Multi-Book.
NetSuite OneWorld is a global business management platform that’s specifically designed to address the complex multi-national and multi-company needs of global organizations. It’s built to support both global standards and country-specific audit and tax regulations.
OneWorld can be used in more than 110 countries and supports 27 languages. It allows you to adjust for currency, taxation, and legal compliance differences at the local level, all while providing real-time global business consolidation.
NetSuite OneWorld is up to speed on accounting regulations and accreditations around the globe, including countries in North America, Latin America, Europe, Middle East, Asia/Pacific, and Africa.
Two of the best features that NetSuite OneWorld delivers for global businesses are the Subsidiary Navigator and its Multi-Book accounting engine.
The Subsidiary Navigator provides a clear, visual hierarchy of all company subsidiaries, streamlining the navigation process. No longer do accountants need to sift through countless spreadsheets, tabs, or systems; with just a single click, they can seamlessly switch between subsidiary records on their dashboard.
But it’s more than just a visual aid. The reporting engine generates its data from NetSuite’s accounting platform, ensuring real-time accuracy across all subsidiaries. This not only reduces the margin of error but also promotes efficient consolidation and intercompany reconciliations.
Finance and accounting leaders can also create internal controls for the Subsidiary Navigator to permit or restrict the type of data users can view or edit.
NetSuite is robust in its ability to provide role-based access controls. Depending on a user’s assigned role, you can restrict or grant access to specific subsidiaries. For example, a regional controller might only have access to subsidiaries in their region.
Within the subsidiaries, you can also control what type of data a user can view or modify. Some users might be able to view financial data, while others can only view operational data.
If your organization frequently deals with intercompany transactions, you can set controls to ensure that only authorized personnel can initiate or approve these transactions.
For global accounting teams, the Subsidiary Navigator is more than a convenience—it’s a necessity. By simplifying subsidiary management, it empowers accountants to focus on strategy, analysis, and driving business growth.
Multi-Book is designed to allow accounting departments to report financial results in compliance with multiple accounting standards concurrently. Accountants can manage multiple sets of financial books in parallel and issue financial statements in accordance with whichever accounting standards are required.
Using a rule-driven engine, accounting departments can create business transactions while automatically posting the activity to all books. And Multi-Book excels at foreign currency management and comprehensive reporting and analysis.
Multi-Book lets you optimize the financial close process with concurrent posting to all books as your business transactions occur, rather than waiting until the end of the period to replicate data entry and post adjustments after the fact.
Here’s an overview of some key benefits of Multi-Book:
- It lets you assign fixed assets to multiple books with different currencies and/or depreciation methods.
- It allows you to manage financials across the company with subsidiary-book relationship-mapping capabilities.
- It provides real-time visibility by letting you see accurate flash report financials for any book, anytime.
- It offers ongoing compliance to make the necessary customizations in your accounting processes.
- It improves communication with stakeholders by showing the impact of new accounting rules, tax laws, and other changes with “before” and “after” reports.
NetSuite natively has all the functionality needed to support a global business, but the setup of the legal entities, chart of accounts, and localization requirements is critical for success on the platform. Make sure you are working with a team of consultants familiar with global ERP deployments to save your business a ton of time and stress.
Contact Sikich today to learn why we are the right partner to lead your team through a successful global ERP implementation.