How NetSuite Project Costing Solution Increases Project Profitability for the IT Industry

NetSuite Project Costing

When businesses are project based, it becomes imperative to calculate accurate labor costs based on time. These costs are then reported in the general ledger. NetSuite just made this a whole lot easy with their Project Costing solution. The Project Costing solution provides visibility into project costs enabling accountability and delivering much needed accuracy. The solution spans the entire planning cycle from estimating to budgeting and forecasting. It supports through all stages of project execution up until posting to General Ledger.
When an employee enters time worked on a project into NetSuite, the cost of that time is calculated based on the employee’s labor cost. NetSuite also allows grouping of entries by project, employee – this also brings down the number of journal entries, making it much easier to audit.

The costing solution includes the following components:

  • Project Costing: This module calculates the labor costs based on time entered, and accounts for those costs in the general ledger.
  • Project Budgeting: With this module you can set cost and billing budgets at project/task levels. These budgets can be set up monthly and task level budgets roll up into project level. Various reports and dashboards expose how your actuals compare to budgets so you can keep track and stay on-budget.
  • Project Profitability Report: The new Project Profitability Report enables project managers to assess what has been billed and recognized as revenue, associated actual costs and profitability. The report displays revenue, cost, and project-wise margins which helps managers identify projects with revenue leaks and the projects that are profitable.

Businesses greatly benefit from such visibility as they can react immediately to sudden situations such as scope creep, milestone changes and project overruns. Budget vs. Actual also helps a great deal in managing current projects and estimating for future projects.

The important benefit of this solution is that it definitely increases project profitability. Project managers are able to closely track project costs and ensure that projects stay within budgets. In case of budget extensions or overruns, the managers are also able to react quickly. Real-time analysis of budget vs. actual, improves performance and therefore profitability.
With NetSuite’s next upgrade, users can expect a functionality that will allow resource cost transfers between subsidiaries of the same business. This capability will optimize resource utilization by allowing resources to be assigned from one subsidiary to another, and account for cross-charging of costs between the subsidiaries. At the end of the accounting period, transfer of costs will happen from the resource lending subsidiary to the subsidiary receiving the resource.

Netsuite makes it possible for you to keep your business profitable & get real-time visibility into the profit /loss, budget /cost of every project.

Inspirria Cloudtech is a leading NetSuite partner offering end-to-end implementation services and support to cater to the dynamic growth requirements of organizations. With more than 14 years of experience in cloud technologies and over 500 clients around the world, we have helped businesses maximize efficiency and visibility for rapid and agile growth.
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