5 Common Financial Mistakes Companies Make in NetSuite (And How to Fix Them)

NetSuite is one of the most powerful cloud-based ERP platforms available today, offering finance teams real-time visibility, automation, and insights into their organization’s performance. However, like any robust system, NetSuite can only deliver results if it’s implemented and used correctly. Many companies unintentionally sabotage their financial performance by making avoidable mistakes within NetSuite — resulting in inaccurate data, compliance risks, and poor decision-making.

In this blog, we’ll explore the five most common financial mistakes companies make in NetSuite and share actionable tips to fix them so you can maximize your ROI and improve financial performance in Netsuite.

1. Poor Chart of Accounts (COA) Design

Your Chart of Accounts (COA) is the backbone of your entire financial reporting structure. Yet, many companies either overcomplicate it with too many accounts or oversimplify it, creating confusion and inaccurate reporting.

The Problem

• Too many accounts lead to reporting complexity and errors.

• Generic or misclassified accounts make it difficult to analyze profitability by department, region, or product line.

• Mergers or new business units become challenging to integrate.

The Fix

• Standardize Your COA: Use a hierarchical structure that allows easy roll-ups for reporting (e.g., by region, department, or business unit).

• Follow NetSuite Best Practices: Use account types strategically — separate expense accounts by function (marketing, operations, admin) for better insights.

• Use Segments & Classes: Instead of creating hundreds of GL accounts, leverage NetSuite’s dimensions like classes, departments, and locations for granular tracking.

Pro Tip: Review your COA annually to ensure it still reflects your current business operations and future growth plans.

2. Manual Journal Entries and Reconciliations

Many finance teams still rely heavily on manual journal entries and spreadsheet reconciliations, even after moving to NetSuite. This increases the risk of human error and delays financial close.

The Problem

• Manual entries can bypass approval workflows, creating compliance issues.

• High volume of journal entries slows down the month-end close.

• Reconciliations take days, delaying reporting and decision-making.

The Fix

• Automate Recurring Entries: Use NetSuite’s recurring journal entry feature to automate depreciation, accruals, and reclassifications.

• Leverage Bank Feeds & Auto-Reconciliation: Connect NetSuite to your bank for daily transactions and automate reconciliations.

• Implement Approval Workflows: Ensure journal entries go through proper review before posting to the GL.

Pro Tip: Use NetSuite’s “Account Reconciliation” functionality to track and manage account balances in real time rather than waiting until month-end.

3. Inconsistent Revenue Recognition Practices

Revenue recognition is one of the most critical areas in financial management, especially for subscription-based or multi-element businesses. Inconsistent or incorrect revenue recognition can lead to compliance violations and inaccurate performance reporting.

The Problem

• Misalignment with ASC 606 / IFRS 15 standards.

• Manual spreadsheets to track deferred revenue lead to errors.

• Lack of audit trails for revenue adjustments.

The Fix

• Use NetSuite Advanced Revenue Management (ARM): Automate revenue allocation, recognition, and forecasting in compliance with ASC 606.

• Configure Rules by Contract Type: Set up templates for subscription, project-based, or product sales to standardize treatment.

• Audit Regularly: Run exception reports monthly to catch anomalies before close.

Pro Tip: If you are scaling rapidly, invest in ARM early — retrofitting revenue rules later can be time-consuming and expensive.

4. Ignoring Real-Time Dashboards and KPIs

NetSuite provides powerful dashboards, saved searches, and KPIs, but many companies still rely on offline spreadsheets or static reports to track financial performance.

The Problem

• Leaders make decisions based on outdated or incomplete data.

• Finance teams spend too much time building ad-hoc reports.

• Missed opportunities to respond to performance issues quickly.

The Fix

• Set Up Role-Based Dashboards: Customize dashboards for CFOs, controllers, and department heads with the KPIs that matter most to them (e.g., cash flow, DSO, margin by product).

• Leverage Saved Searches: Automate recurring reports like overdue invoices, expense variance, or budget vs. actuals.

• Use Real-Time Alerts: Set thresholds to notify managers when metrics exceed or fall below targets.

Pro Tip: Make dashboards interactive by including drill-down capability so users can go from summary to transaction level in seconds.

5. Not Leveraging Automation for Financial Close

A slow or inefficient financial close process drains productivity and delays insights. Some companies using NetSuite still take weeks to close their books, defeating the purpose of real-time ERP.

The Problem

• Disconnected workflows between finance, operations, and procurement.

• Manual accruals, allocations, and eliminations extend the close timeline.

• Limited visibility into close status until the last minute.

The Fix

• Adopt a Continuous Close Approach: Reconcile accounts and book accruals throughout the month instead of waiting until period-end.

• Automate Allocations: Use NetSuite’s allocation schedules to distribute shared costs (e.g., rent, utilities) automatically.

• Track Close Progress: Use NetSuite’s Period Close Checklist to monitor which tasks are complete and which are pending.

Pro Tip: Companies that streamline their close can free up finance teams to focus on strategy and forecasting rather than manual cleanup.

Final Thoughts

NetSuite is a game-changer for financial performance — but only when used to its full potential. By avoiding these five common mistakes — poor COA design, manual journal entries, inconsistent revenue recognition, underused dashboards, and slow closes — you can gain faster insights, stronger compliance, and higher profitability.

Whether you’re just getting started with NetSuite or looking to optimize your current setup, focus on standardization, automation, and real-time reporting. The result will be a leaner finance team, faster decision-making, and a clear view of your company’s financial health.

FAQs

1. How can I simplify my Chart of Accounts in NetSuite?

Use a hierarchical COA structure and leverage dimensions like classes, locations, and departments instead of creating too many GL accounts.

2. Does NetSuite support automated bank reconciliation?

Yes. NetSuite can connect to your bank accounts, import transactions daily, and automatically match them to ledger entries.

3. What is Advanced Revenue Management (ARM) in NetSuite?

ARM is a module that automates revenue recognition and ensures compliance with ASC 606/IFRS 15 standards, reducing manual work and audit risks.

4. How do dashboards improve financial performance?

Dashboards provide real-time visibility into KPIs, allowing teams to take action immediately when metrics deviate from targets.

5. How can I speed up my month-end close process?

Implement continuous reconciliations, automate allocations, and track progress using NetSuite’s period close checklist.