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NetSuite’s Built-In Compliance Tools: A Guide for CFOs and Controllers

Introduction

For CFOs, Controllers and other finance leaders, regulatory compliance is a top priority that must be balanced with driving strategic growth initiatives. Keeping up with an ever-changing landscape of financial reporting requirements and compliance rules can be an overwhelming and time-consuming task. Thankfully, leading cloud ERP solutions like NetSuite provide a comprehensive set of built-in compliance tools that make it easier than ever for finance teams to manage risk, maintain proper controls, and ensure continuous compliance.

In this guide, we’ll take an in-depth look at how NetSuite’s powerful suite of compliance features can help CFOs and Controllers streamline and automate key compliance processes. From automated audit trails and advanced user permissions to sophisticated financial reporting and real-time compliance dashboards, NetSuite offers everything finance leaders need to build a proactive, technology-driven approach to compliance management. By leveraging NetSuite’s robust set of compliance capabilities, your organization can reduce risk, improve operational efficiency, and free up valuable time and resources to focus on more strategic priorities.

The Growing Compliance Challenge for CFOs and Controllers 

Today’s CFOs and Controllers face immense pressure to not only deliver accurate and timely financial reports but also to ensure full regulatory compliance across an increasingly complex web of laws, rules and standards. For public companies, the Sarbanes-Oxley Act (SOX) imposes strict requirements around internal controls, financial disclosures, and corporate governance. Private companies may need to comply with industry-specific rules such as HIPAA in healthcare or PCI DSS in retail.

At the same time, tax authorities around the world are stepping up enforcement, with many requiring detailed electronic filings and real-time reporting. The EU’s Making Tax Digital initiative and similar e-invoicing mandates in Latin America are just a couple examples of the growing digitization of global tax compliance.

Add to this an ever-present risk of fraud and cyber threats, and it’s easy to see why compliance has become such a critical and yet challenging responsibility for finance leaders. A 2020 EY survey found that 63% of CFOs view compliance as the most significant risk to their company’s growth plans. The potential costs of non-compliance – hefty fines, legal issues, reputational damage – are simply too great to ignore.

Many organizations still rely on manual compliance processes, using a patchwork of spreadsheets, documents and disconnected point solutions to manage audits, maintain internal controls, and generate necessary reports. This old-school approach is not only highly inefficient but also prone to errors and oversights that increase compliance risk. Progressive CFOs and Controllers recognize that technology must play a central role in modernizing compliance management for the digital age.  

Financial Leaders Turn to NetSuite for Compliance

As a unified cloud platform that combines ERP, CRM, e-commerce and professional services automation (PSA), NetSuite provides a uniquely powerful foundation for streamlining financial and compliance processes. By consolidating all business data and workflows in a single source of truth, NetSuite makes it much easier for finance teams to maintain consistent controls, monitor compliance in real-time, and produce accurate reports at the push of a button.

Over 31,000 organizations worldwide trust NetSuite to run their mission-critical business processes while meeting the highest standards of security, reliability and compliance. NetSuite has invested heavily in building a comprehensive compliance framework within the platform, so that customers can take advantage of a wide range of automated tools and preconfigured controls.

NetSuite’s Governance, Risk, and Compliance (GRC) tools enable CFOs and Controllers to:

– Establish robust internal controls around key processes like purchasing, expense approvals, and financial reporting

– Proactively monitor for suspicious activities and potential compliance exceptions in real-time

– Streamline and automate audit processes with self-service auditor access to reports and documentation

– Comply with global tax regulations through out-of-the-box support for GAAP reporting, e-invoicing, and tax calculations

– Manage full lease accounting lifecycle in compliance with ASC 842 and IFRS 16 standards

– Document and assess the effectiveness of compliance programs with built-in checklists and control matrices

Let’s dive deeper into each of these key compliance capabilities and how they benefit finance leaders.

Automated Access Controls and User Permissions

Properly managing user access is a fundamental principle of financial compliance, especially for regulations like SOX and the EU’s GDPR data privacy law. CFOs must ensure that employees only have access to the specific data and processes required for their roles, while also maintaining detailed logs of all user activities for audit purposes.

NetSuite offers an extremely granular and flexible role-based access control (RBAC) system for managing user permissions. Administrators can define an unlimited number of job roles with specific data-level permissions for each functional area, like accounts payable, fixed assets, or revenue recognition. 

For example, a Junior Staff Accountant role could be restricted to only posting and viewing journal entries, while a Controller has full access to the general ledger and financial reporting. Highly sensitive data fields like credit card numbers can be hidden from all non-admin users. NetSuite even allows field-level editing permissions to be defined, so a Manager could have read-only access to employee salaries.

All changes to roles and permissions are fully tracked in NetSuite’s Access Audit Log. The ability to attach access policies directly to roles helps improve visibility and compliance with least-privilege principles. Advanced access controls like IP address restrictions, two-factor authentication, and automatic logout further reduce the risk of unauthorized entry.

With NetSuite’s RBAC capabilities, CFOs can:

– Implement strong segregation of duties to prevent fraud and conflicts of interest

– Ensure employees only see the data they need to perform their jobs

– Easily produce user access audit reports and monitor for suspicious permission changes  

– Automate periodic user access reviews and streamline access certifications for auditors

Real-Time Monitoring and Compliance Dashboards  

Another major benefit of NetSuite’s unified architecture is the ability to proactively monitor compliance metrics and internal controls across the entire organization in real-time. Rather than relying on manual detective controls and backward-looking audit reports, finance leaders need live visibility into transactions as they flow through accounting processes.

NetSuite provides this real-time transparency through sophisticated saved searches, KPIs, and preconfigured compliance dashboards. Controllers can easily configure custom searches to continuously analyze large volumes of accounting data and surface exceptions like unapproved journal entries, duplicate payments, or invoices over approval limits.    

These saved searches can be added directly to NetSuite’s role-based dashboards so that metrics are front and center for each user based on their responsibilities. An AP Manager dashboard could display KPIs for outstanding payables by vendor, invoices on hold, and POs pending approval. Senior leadership dashboards consolidate broader compliance metrics like SOX deficiencies, audit issues, and tax filing status across entities.

To provide even richer insights, compliance searches can be layered with NetSuite’s SuiteAnalytics visualization engine. Interactive charts, graphs, and pivot tables make it easy to assess compliance trends, identify outliers, and drill down to transaction details. Conditional formatting and color scales highlight risk indicators for immediate attention.

By embedding compliance monitoring directly within NetSuite’s single data platform, CFOs benefit from:

– Real-time analysis of massive transactional data sets to detect hidden anomalies

– Proactive insights into control effectiveness and compliance gaps

– Significant reduction in time spent producing backward-looking detective control reports

– Improved accountability by delivering targeted compliance KPIs to process owners

Streamlined Audit Trails and Documentation

Maintaining detailed audit trails is a critical requirement for many financial regulations, both to provide transparency into accounting processes and also to protect against fraud. Companies need detailed logs of every transaction posted to the general ledger, along with supplementary evidence to justify the accounting treatment. 

With NetSuite, every user action is automatically captured in the system notes and searchable audit logs, down to the field level. This includes transaction entries, report exports, setup configuration changes, and even record deletions. The audit trail is easily filterable by user, date range, event type, and impacted records.

During audit fieldwork, the Auditor role in NetSuite allows third-party audit firms to securely access process documentation, test transaction samples, and generate extracts of the audit logs. Auditors can sign off on control tests directly in the platform, with all responses rolling up to a central Issues dashboard for tracking purposes. 

NetSuite administrators can even automate much of the PBC (Prepared by Client) activities using saved searches and system notes. Attaching evidence like invoice images, approvals, or contracts directly to transactions provides a clear audit trail. Detailed documentation and diagrams of accounting processes and procedures can be stored centrally in NetSuite for easy access and updating.

By leveraging NetSuite’s automated audit trail and documentation features, CFOs can:

– Significantly reduce time spent pulling transaction samples and evidence for auditors

– Proactively detect and investigate potential fraud with filterable audit logs

– Improve transparency into accounting judgments and estimates with linked documentation 

– Manage PBC lists directly in the platform and automate evidence collection

Tax Compliance and E-Invoicing

With over 19,000 tax jurisdictions worldwide and a web of disparate e-invoicing laws, sales tax compliance has become a massive administrative burden for finance teams. Each country and state seems to have its own unique set of rates, rules, filing formats, and reporting portals, making it nearly impossible to keep up with manually.

Thankfully, NetSuite’s SuiteTax and Advanced Compliance modules provide out-of-the-box functionality to automate even the most complex global tax requirements. The intelligent tax engine ensures the right tax codes are applied to each sale based on a matrix of product mapping and jurisdiction-specific rules. Prebuilt connectors allow real-time tax calculations to be outsourced to specialized partners like Avalara.

To meet the e-invoicing and live reporting mandates now in effect for dozens of countries, NetSuite automatically generates the required XML/JSON file formats and transmits invoice data directly to government platforms. Localized document templates ensure that printed invoices, order forms, and dispatch notes include all mandatory fields, tax clauses, and QR codes.    

Tax managers can use the built-in Tax Reporting Center to prepare signature-ready returns across all 50 states and dozens of international jurisdictions. Drill-down links and reconciliations make it easy to tie tax liabilities to detailed transaction records for audit defense. Role-based dashboards display real-time filing statuses, tax rates, and liability trends.

By relying on NetSuite’s tax compliance suite, CFOs can:

– Eliminate spreadsheets and manual effort for tax calculations and reporting

– Gain confidence in the completeness and accuracy of real-time tax filings

– Reduce audit exposure with complete documentation and detail for every transaction

– Offload the work of monitoring complex e-invoicing and live reporting mandates

Built-In Lease Accounting Compliance

The new lease accounting standards (ASC 842 and IFRS 16) have posed a major compliance hurdle for companies of all sizes. Finance teams must implement new accounting procedures and controls to identify all leasing arrangements, calculate asset and liability balances, generate amortization schedules, and report additional quantitative and qualitative disclosures.

NetSuite’s Advanced Revenue Management module provides end-to-end lease accounting automation in full compliance with these new standards. Customers can track the complete lifecycle of each lease agreement including lessor, key terms, payments, and renewal options. The system automatically posts the initial and subsequent journal entries to record the lease asset (ROU) and liability accounts.

As market conditions change, accountants can easily update assumptions like discount rates or FX rates and the system will instantly recalculate the impact on financial statements. NetSuite’s built-in reporting center provides all required disclosures like weighted average terms and future lease liability maturities. Out-of-the-box transition tools simplify the adoption of the new standards and prior period restatements. 

Audit-ready amortization and disclosure schedules are instantly accessible for any lease, and can be bulk exported for further analysis. Pre-configured roles and permissions allow appropriate lease accounting segregation of duties, along with advanced audit logs of every lease modification and user action.

With NetSuite’s lease compliance solution, CFOs can:

– Comply with ASC 842 and IFRS 16 using pre-built and fully automated functionality

– Easily generate auditable lease schedules, journal entries and disclosure reports 

– Improve accuracy of lease accounting through centralized calculations and processes

– Reduce audit risks with proper controls, permissions, and audit logs for all lease activities          

Interactive Compliance Checklists and Assessments

To help organizations take a proactive, structured approach to compliance, NetSuite embeds interactive tools for performing compliance risk assessments, designing control activities, and monitoring program effectiveness. These tools guide finance teams through compliance planning and oversight based on established frameworks and best practices.

Within NetSuite’s GRC module, customers will find a prebuilt library of compliance checklists and control matrices covering key regulations such as SOX, HIPAA, GDPR, and ISO 27001. These templates define the specific risk factors, control objectives, and test criteria for each area of compliance, with separate versions for different industries and company size.

As a starting point, NetSuite offers self-assessment questionnaires to help organizations evaluate their current compliance gaps and risk areas. The results of these assessments automatically feed into a risk scoring matrix to highlight critical issues for remediation. Customers can easily modify these standard templates or create entirely new checklists to support internal policies.

Based on identified risk levels, automated workflows route control tasks and policy attestations to process owners for review and sign-off. The status of each compliance activity is tracked in real-time on graphical dashboards, with built-in alerts to flag potential issues or bottlenecks. Auditors can drill into each checklist item to view linked control documentation and testing artifacts.  

By leveraging NetSuite’s compliance checklists and assessments, CFOs can:

– Jumpstart compliance programs with established best practice templates

– Assign clear responsibility for compliance tasks and automate attestation workflows

– Gain executive visibility into compliance activities and risk trends  

– Embed compliance and controls into everyday business processes  

Conclusion

Amid an ever-changing and increasingly complex regulatory landscape, compliance has become a mission-critical priority for CFOs, Controllers and other finance leaders. Yet the disparate systems and manual processes in place at many organizations are simply not equipped to provide the proactive, real-time, and data-driven compliance oversight required today.

By combining financial data and processes in a unified cloud platform, NetSuite empowers finance teams to reimagine compliance through automation. NetSuite’s comprehensive suite of built-in GRC capabilities – from fine-grained access controls and audit trails to tax calculations and lease accounting – provides CFOs with unparalleled ability to:  

– Implement continuous controls across global operations

– Proactively monitor for fraud and compliance exceptions

– Provide auditors with self-service access to detailed data and documentation 

– Automate key compliance workflows like SOX / GDPR assessments and policy attestations

– Comply with complex requirements like ASC 842 and e-invoicing mandates

Just as importantly, NetSuite’s auditor-friendly architecture and reporting tools allow finance teams to reorient compliance from a reactive, check-the-box exercise into a strategic, always-on discipline. Rather than scrambling to piece together evidence from emails and shared drives, process owners can manage all compliance tasks and documentation directly within their day-to-day ERP and CRM activities.   

With NetSuite, CFOs gain a single source of truth for key business and compliance data, providing unprecedented transparency into accounting judgments, control issues, and risk trends. Access to real-time KPIs and detail allow finance leaders to proactively optimize compliance efforts and focus limited resources on the most significant gaps.

In essence, NetSuite’s cloud platform provides a catalyst for finance transformation, freeing accounting teams from the manual toil of fragmented compliance activities so they can deliver strategic value to the business. By instilling a culture of continuous compliance and control across the organization, finance leaders can position their companies to navigate a dynamic regulatory landscape with confidence and resilience.          

As CFOs and Controllers look to modernize the finance function and keep pace with digital acceleration, NetSuite’s robust compliance capabilities should be a key factor in any software evaluation. Few technology assets will deliver more business value than a unified platform for streamlining financial operations while ensuring the integrity of data and processes. NetSuite’s compliance tools represent an essential foundation for building a more agile, automated, and proactive finance organization.