Embarking on a global expansion journey requires a carefully crafted localization strategy tailored to each organization’s unique needs. While NetSuite offers a host of essential features, achieving full compliance with a variety of country-specific regulatory requirements demands a strategic approach and a solid data foundation. This article delves into the common methods embraced by companies seeking to find a balance between meeting compliance obligations and navigating the practical limitations inherent in a global enterprise resource planning (ERP) solution.
Understanding requirements
Before exploring the details of localization, understanding the specific requirements of operating in a given country is a critical first step. Whether establishing a small research and development outpost or a fully operational entity, grasping the nuances of local regulations is crucial.
Defining the approach
With localized requirements in focus, your organization can opt for one of three strategic approaches to address indirect global tax, compliance and statutory accounting needs.
1. Outsourced: Delegate tax or accounting tasks to a local firm that utilizes its experience and tools. This strategy may involve double entry between NetSuite and a local system or offline operations, with NetSuite receiving monthly summary trial balance uploads. We recommend this approach for those seeking external experience while ensuring seamless integration.
2. Hybrid: Channel primary operations through NetSuite while leveraging local advisors for specific activities where experience or functionality may be lacking in-house. Examples include extracting sales and purchase reports by tax code from NetSuite and collaborating with local firms for indirect tax filing or providing financials to local accountants to apply local adjustments to produce statutory financial reports. This approach provides a balance between in-house control and external support, however, it will require sufficient system configuration to capture the data points required for external reporting.
3. In-house: Make NetSuite the system of record for all indirect tax, compliance and statutory accounting activities. While demanding local experience and robust system capability, this approach benefits from NetSuite's cost-effective bundles containing essential functionalities for localized requirements (e.g., VAT/GST reports, SAF-T and statistical reports, localized payment file formats and statutory financial report templates).
In addition, NetSuite's solution developer network and SuiteApps further enhance its global reach. With SuiteApps licensed through third-party vendors and seamlessly integrated into NetSuite's interface, these applications are certified and vetted, providing extended coverage for additional countries.
Selecting a strategy
Choosing the right strategy for your organization can be challenging, particularly when rapidly growing and expanding into new geographies. With any approach, companies must ensure that the underlying data structure will support downstream requirements, whether managed in-house or outsourced. In a subsequent article, we outline the challenges and benefits of each approach across factors such as cost, scalability, flexibility, control, required experience and speed to implement.
