How to Track and Segment Data Using Classifications in NetSuite
Classifications are powerful tools that can be used to identify and categorise records in your NetSuite Account. There are 3 different types of classification that come as standard with NetSuite, each helping you to segment reporting and allocate costs as needed. Departments and Classes are used to track records such as financials, transactions and employees:
Departments: Used to designate transactions and employees as part of an internal team or cost centre. It is possible to create a department for each team of employees dedicated to a specific area, or department, of your business. E.g. if you have created a Sales Department, this would enable you to track all income and expenses associated with the Sales Department over any period of time.
Classes: Often used in conjunction with departments, classes provide wider segments within your business. For example, this can be incredibly useful for a Sales Department which would like to track the type of customer they are interacting with. This would be tracked on a Sales Order and show which customers are new or which customers are returning customer etc.
When used together, the Departments and Classes Classifications allow for increased detail on all transaction, financial and employee records. As a result, this leads to greater insight into customer demand & trends, company income and expenses, and resource allocation.
Locations: Like with departments and classes, Locations allow you to filter and track data. To do this, you must create a record for each location you would like to track. Then, you can then associate employees and transactions to a location. This feature has several advantages, such as allowing you to restrict an employee’s access to only view data from their location, or allowing you to track and manage costs and orders through a particular location.
Used in Reporting
From a reporting standpoint, using departments classes and locations to segment your data will help you to remove a lot of the complexity around your income and expenses, giving you a level of granularity in your reporting which will enable you to make more calculated and informed decisions surrounding your business.
Another classification functionality within NetSuite is the Custom Segment Feature, allowing you to create additional custom fields similar to class and department. These custom segments can be assigned multiple possible values, and these segments can be added to specific record types to suit your bespoke needs.
Restricting Access By Classifications
Another handy feature associated with using Classifications is the ability to restrict access to different departments, classes or locations. This restriction will not only help improve the security of your information by only providing employees with the information they need to carry out their day to day duties, but it will also improve their experience using the system, by reducing the irrelevant information associated to their role giving them a more refined experience.
Segmentation of Data at a Transactional Level
By Tagging your transactions with your classifications, you can greatly simplify your chart of accounts, allowing you to extract more meaningful information from your General Ledger. For Example, if your business has multiple locations, tagging expenses such as rent by location will allow you to filter your reports or searches to determine how much you are paying on each individual location, rather than only being able to view your business’ total monthly rent expense. If set up correctly, these tags can be defaulted by the user, vendor or item associated to the transaction, meaning achieving this extra level of detail will come with no greater effort for the users creating the transactions.
To Conclude, even if you currently only use one of these classifications, it would be advised to at least be aware that these features exist. As your business continues to grow, it may become increasingly difficult to track the various revenue streams within your organisation. However, the ability to filter, include and exclude data based on these 3 classifications alone can be a powerful tool for your organisation. Increasing the clarity and availability of relevant information for decision making, allowing you to see the specific costs and revenue streams associated with an individual area of your organisation, promoting a greater understanding of your organisations finances.
As always, if you have any questions or need any help, please feel free to contact us here, or leave a comment in the discussion section below and a member of our NetSuite team will be in touch ASAP to assist.