Customer Configuration
Customers are at the heart of your revenue cycle. Proper customer configuration ensures accurate invoicing, correct tax calculation, appropriate credit management, and meaningful sales analytics.
Customer Record Fundamentals
The customer record in NetSuite serves multiple purposes: it's the bill-to entity for invoices, the anchor for sales history, the target for marketing campaigns, and the subject of credit decisions.
Key Customer Fields
- Company Name: The legal entity name—used on invoices and legal documents
- Customer ID: Auto-generated or custom format; consider using legacy system IDs during migration
- Category: High-level customer classification (Enterprise, SMB, Government, etc.)
- Status: Customer lifecycle stage (Lead, Prospect, Customer, Inactive)
- Subsidiary: Which company entity owns this customer relationship (OneWorld only)
- Currency: Primary transaction currency for this customer
- Price Level: Default pricing tier (Base Price, Wholesale, VIP, etc.)
- Payment Terms: Default terms applied to invoices (Net 30, Net 60, etc.)
- Credit Limit: Maximum allowed open balance before holds apply
- Tax Item/Tax Exempt: How tax is calculated on sales to this customer
Customer Hierarchy Design
Many businesses need to track relationships between customers—parent companies and their divisions, franchisors and franchisees, or buying groups and their members.
Customer Hierarchy Approach
Customer Addresses
NetSuite distinguishes between billing addresses (where invoices go) and shipping addresses (where goods are delivered). A customer can have multiple of each.
| Address Type | Purpose | Drives |
|---|---|---|
| Default Billing | Primary invoice address | AR correspondence, dunning letters |
| Default Shipping | Primary delivery location | Tax nexus, shipping cost calculation |
| Additional Shipping | Alternate delivery locations | Drop ship destinations, branch offices |
Credit Management Configuration
NetSuite's credit management features help control customer risk exposure.
Set Credit Limit
Establish the maximum open balance allowed for the customer based on credit analysis or corporate policy.
Configure Hold Rules
Enable credit hold preferences at Setup → Accounting → Accounting Preferences. Choose whether holds apply to sales orders, fulfillments, or both.
Define Override Roles
Specify which roles can override credit holds. Typically limited to credit managers or finance directors.
Set Up Alerts
Configure workflow alerts when customers approach or exceed credit limits. Consider alerts at 80% and 100% of limit.
Pre-Go-Live Customer Configuration
Vendor Configuration
Vendors are your supply chain partners. Proper vendor configuration ensures smooth purchasing, accurate AP aging, proper tax reporting (1099s), and effective spend analysis.
Vendor Record Fundamentals
The vendor record in NetSuite manages your relationships with suppliers, service providers, and contractors. It drives purchasing workflows, payment processing, and regulatory compliance like 1099 reporting.
Key Vendor Fields
- Company Name: Legal name as it appears on invoices and 1099s
- Vendor ID: Unique identifier—consider matching legacy system IDs during migration
- Category: Vendor classification (Raw Materials, Services, Utilities, etc.)
- Subsidiary: Which company entity purchases from this vendor (OneWorld)
- Currency: Transaction currency for purchases
- Payment Terms: Default terms (Net 30, Net 45, 2% 10 Net 30)
- Tax ID: Federal EIN or SSN for 1099 reporting
- 1099 Eligible: Flag for US tax reporting requirements
- Default Expense Account: GL account for non-inventory purchases
Vendor Categories
Categorizing vendors enables meaningful spend analysis and helps route approvals appropriately.
| Category | Description | Examples |
|---|---|---|
| Raw Materials | Components used in manufacturing | Steel suppliers, chemical vendors |
| Finished Goods | Resale inventory suppliers | Product distributors, dropship vendors |
| Services | Professional and consulting services | Law firms, accountants, consultants |
| Utilities | Infrastructure services | Electric, water, internet providers |
| MRO | Maintenance, repair, operations | Office supplies, janitorial, equipment maintenance |
| Contractors | 1099 independent contractors | Freelancers, temp agencies |
1099 Configuration
US companies must issue 1099 forms to vendors who receive over $600 in non-employee compensation during a tax year.
Enable 1099 Features
Go to Setup → Company → Enable Features → Accounting tab. Enable "1099 Tracking" feature.
Configure 1099 Accounts
Mark expense accounts that typically involve 1099-reportable payments (professional services, rent, legal fees).
Set Vendor 1099 Flag
On each eligible vendor, check "1099 Eligible" and enter their Tax ID. Select appropriate 1099 type (NEC, MISC, etc.).
Verify Address Information
1099s are mailed to vendors—ensure mailing addresses are complete and current.
Three-Way Matching Setup
Three-way matching compares PO, receipt, and vendor bill to ensure you only pay for what was ordered and received.
Matching Level
- Require dual approval for any bank account changes
- Verify changes via phone call to a known number (not from the change request)
- Send confirmation to vendor's registered email when banking changes
- Review all banking changes in weekly AP meeting
Pre-Go-Live Vendor Configuration
Employee Configuration
Employees are system users, approval participants, and cost centers. Proper employee configuration enables expense management, time tracking, project costing, and organizational reporting.
Employee Record Overview
The employee record in NetSuite serves dual purposes: it's both an HR record containing personal and organizational information, and a system identity that can be granted login access.
Core Employee Fields
- Name: Legal first and last name
- Employee ID: Unique identifier, often matching HRIS system
- Email: Required for system access—typically corporate email
- Subsidiary: Which entity employs this person (OneWorld)
- Department: Organizational department for reporting
- Location: Physical work location
- Supervisor: Reporting manager—drives approval routing
- Hire Date: Employment start date
- Job Title: Current position title
Employee vs. User Access
A critical distinction in NetSuite: every user is an employee, but not every employee is a user.
| Type | Has Employee Record | Has Login Access | License Impact |
|---|---|---|---|
| Full User | Yes | Yes (Full Access) | Consumes full user license |
| Employee Self-Service | Yes | Yes (Limited) | Free (limited to employee center) |
| No Access Employee | Yes | No | None—reference only |
Organizational Hierarchy
The supervisor field creates organizational hierarchy used for approval routing and organizational reports.
Approval Hierarchy
Employee Lifecycle
- Remove all roles (revokes access)
- Set "Give Access" to No
- Set Release Date/Termination Date
- Update supervisor for their direct reports
- Reassign any open transactions, opportunities, or cases
Pre-Go-Live Employee Configuration
Contact Strategy
Contacts are the people at customer, vendor, and partner organizations. A well-designed contact strategy enables effective communication, proper transaction routing, and comprehensive relationship management.
Understanding Contacts in NetSuite
Contacts are individual people associated with entity records (customers, vendors, partners). Unlike the entity itself, which represents the company or organization, contacts represent the humans you interact with.
Contact vs. Entity
- Entity (Customer/Vendor): The company you do business with—bills, pays, and has a balance
- Contact: A person at that company—receives emails, makes decisions, attends meetings
Contact Roles
Contact roles define the function a contact plays at their company. Roles enable targeted communication and workflow automation.
| Role | Typical Use | Transaction Association |
|---|---|---|
| Primary Contact | Main point of contact for general business | Default on most communications |
| Billing Contact | Receives invoices and billing inquiries | Invoice emails, AR statements |
| Shipping Contact | Coordinates deliveries | Fulfillment notifications, tracking info |
| Purchasing Contact | Places orders, negotiates pricing | Order confirmations, quotes |
| Technical Contact | Handles technical issues and support | Support cases, product updates |
| Executive Sponsor | Senior decision maker | Escalations, strategic communications |
Contact Creation Approach
Pre-Go-Live Contact Configuration
Partner & Competitor Records
Partners and competitors round out NetSuite's relationship management capabilities. Partner records track referral relationships and commissions, while competitor records support competitive intelligence in sales cycles.
Partner Records Overview
Partner records represent organizations or individuals who refer business to you, resell your products, or collaborate with you in delivering solutions.
Common Partner Types
- Referral Partners: Introduce leads and earn referral fees
- Resellers: Purchase and resell your products (may also be vendors)
- Implementation Partners: Deliver services using your platform
- Technology Partners: Integrate complementary solutions
- Affiliates: Promote products through online channels
Partner Commission Tracking
NetSuite can track partner commissions on transactions they influence or refer.
| Commission Model | Description | Configuration |
|---|---|---|
| Flat Percentage | Fixed % of deal value | Set default rate on partner record |
| Tiered | Rate varies by volume or product | Custom commission schedules |
| Revenue Share | Ongoing % of recurring revenue | Workflow calculation on renewals |
| Fixed Fee | Set amount per referral | Custom field calculation |
Competitor Records
Competitor records track companies you compete against in sales situations. They support sales intelligence and win/loss analysis.
Key Competitor Fields
- Name: Competitor company name
- URL: Competitor website for quick reference
- Strengths: What they do well—inform sales strategy
- Weaknesses: Where you can differentiate
- Strategies: How to compete against them
- Win Rate: Calculated from opportunities
Competitor Tracking Depth
Pre-Go-Live Configuration
Item Types Deep Dive
Items are what you sell, buy, and track. NetSuite provides numerous item types, each with specific behaviors. Choosing the right item type is critical—changing later often requires recreating the item.
Item Type Overview
NetSuite's item types determine how an item behaves in transactions, inventory tracking, GL posting, and reporting.
Core Item Types
| Item Type | Tracks Inventory | Typical Use |
|---|---|---|
| Inventory Item | Yes | Physical goods you stock and ship |
| Non-Inventory Item | No | Physical goods you don't track (office supplies, low-value items) |
| Service Item | No | Labor, consulting, professional services |
| Other Charge Item | No | Freight, handling, fees, miscellaneous charges |
| Discount Item | No | Line-level discounts (%, $, or formula) |
| Markup Item | No | Line-level surcharges |
| Payment Item | No | Customer payments applied to invoices |
| Subtotal Item | No | Subtotals within transactions |
Inventory Items
Inventory items are physical products you purchase, stock, and sell. They drive perpetual inventory tracking, costing, and valuation.
Key Configuration Fields
- Costing Method: FIFO, LIFO, Average, or Standard (set at subsidiary level)
- Track Landed Cost: Include freight and duties in item cost
- Lot Numbered: Track items by lot for traceability
- Serialized: Track individual serial numbers
- Location Inventory: Track quantity by location
- Reorder Point: Trigger purchase orders when stock falls below threshold
- Preferred Vendor: Default vendor for purchasing
Costing Method
Special Item Types
| Type | Purpose | Common Use |
|---|---|---|
| Kit/Package | Bundle items for sale as a single unit | Product bundles, starter kits |
| Assembly/BOM | Items manufactured from components | Manufactured products |
| Group Item | Group items for entry convenience | Standard order templates |
| Description Item | Add text to transactions | Special instructions, notes |
| Gift Certificate | Store credit instruments | Retail gift cards |
| Download Item | Digital products | Software, digital content |
Before Creating Items
Assembly & BOM Items
Assembly items represent products manufactured from component parts. The Bill of Materials (BOM) defines the recipe, and assembly builds consume components to produce finished goods.
Understanding Assembly Items
Assembly items are central to manufacturing in NetSuite. When you build an assembly, the system consumes the component items and adds the finished product to inventory—all with proper GL entries.
Assembly vs. Kit
| Feature | Assembly Item | Kit/Package |
|---|---|---|
| Components consumed? | Yes, during assembly build | No, consumed at sale |
| Finished item tracked? | Yes, as separate inventory | No, components tracked |
| Build transaction? | Yes, required | No |
| Typical use | Manufacturing | Product bundles, combos |
Bill of Materials (BOM)
The BOM defines what components make up an assembly and in what quantities. This is the recipe for your manufactured product.
BOM Configuration
- Component Item: The raw material or sub-assembly used
- Quantity: Amount of component per unit of assembly
- Item Source: Stock (from inventory), Work Order, or Phantom
- Component Yield: Expected yield percentage (for loss/scrap)
- BOM Revision: Version control for BOM changes
Work Orders
For more complex manufacturing, Work Orders provide additional control over the build process.
Work Order Features
- Planned vs. Released: Stage builds through planning approval
- Component Issuance: Track when components are issued to production
- Labor Tracking: Record labor time against production
- Routing: Define production steps and operations
- Partial Completions: Complete builds in stages
- Scrap Tracking: Record and account for production scrap
Pre-Go-Live Assembly Configuration
Matrix Items
Matrix items manage products with variations like size, color, or style. They simplify management of variant products while maintaining separate SKUs for inventory tracking and order fulfillment.
Understanding Matrix Items
Matrix items solve the challenge of managing products that come in multiple variations. Instead of creating hundreds of individual items, you create one matrix parent with options that generate child items automatically.
Matrix Structure
- Matrix Parent: The template item defining common attributes
- Matrix Options: The variation dimensions (Size, Color, etc.)
- Matrix Children: Individual SKUs for each combination (Small/Red, Large/Blue, etc.)
Matrix Options Configuration
Matrix options define the variation dimensions. Each option creates a level in the matrix.
Common Matrix Options
| Option | Example Values | Industry Use |
|---|---|---|
| Size | XS, S, M, L, XL, XXL | Apparel, footwear |
| Color | Black, White, Navy, Red | Apparel, consumer goods |
| Width | Narrow, Regular, Wide | Footwear |
| Capacity | 64GB, 128GB, 256GB | Electronics |
| Material | Cotton, Polyester, Silk | Textiles, furniture |
Pricing Approach
Pre-Go-Live Matrix Configuration
Pricing Configuration
Pricing determines profitability. NetSuite offers multiple pricing mechanisms from simple base prices to complex quantity schedules and customer-specific pricing.
Pricing Fundamentals
Every item needs a price, but how that price is determined varies significantly across business models.
Key Pricing Concepts
- Base Price: The default price on the item record
- Price Level: Named pricing tiers (Wholesale, Retail, VIP)
- Quantity Pricing: Price varies by quantity ordered
- Customer-Specific Pricing: Custom prices for individual customers
- Promotional Pricing: Time-limited price changes
Price Levels
Price levels create named pricing tiers that can be assigned to customers. This is the most common approach for B2B pricing.
Common Price Level Structures
| Level Name | Discount from Base | Typical Use |
|---|---|---|
| Base Price | 0% | Walk-in customers, retail |
| Wholesale | 20-30% | Resellers, large buyers |
| Distributor | 30-40% | Distribution partners |
| VIP/Preferred | 10-15% | Long-term loyal customers |
| Employee | 40-50% | Internal employee purchases |
Price Level Approach
Quantity Pricing Schedules
Quantity pricing provides discounts based on order quantity, encouraging larger purchases.
| Minimum Qty | Maximum Qty | Price | Discount |
|---|---|---|---|
| 1 | 9 | $100.00 | 0% |
| 10 | 49 | $95.00 | 5% |
| 50 | 99 | $90.00 | 10% |
| 100 | ∞ | $85.00 | 15% |
Pricing Hierarchy
When multiple pricing rules apply, NetSuite follows a hierarchy to determine which price wins.
Customer-Specific Price
If customer has a specific price for this item, use it.
Group Price
If customer belongs to a pricing group with item price, use it.
Customer Price Level
Apply customer's assigned price level to item's price matrix.
Quantity Schedule
Apply quantity-based pricing if configured.
Base Price
Fall back to item's base price.
Pre-Go-Live Pricing Setup
Industry Item Patterns
Different industries have distinct item requirements. This chapter provides industry-specific guidance on item structures, custom fields, and configuration patterns.
Manufacturing Item Patterns
Typical Item Structure
- Raw Materials: Inventory items with vendor sourcing, landed cost tracking
- Components: Inventory items or non-inventory (consumables like fasteners)
- Sub-Assemblies: Assembly items built from components, sometimes phantoms
- Finished Goods: Assembly items with full BOMs, serialized if required
- MRO Supplies: Non-inventory items expensed when purchased
Key Custom Fields
- Engineering Drawing Number: Link to CAD/engineering documentation
- Revision Level: Track engineering changes
- Lead Time (Days): Manufacturing or procurement lead time
- Quality Hold: Flag for quarantine status
- RoHS Compliant: Regulatory compliance checkbox
- Shelf Life (Days): For perishable materials
Wholesale Distribution Item Patterns
Typical Item Structure
- Stocked Items: Inventory items purchased and warehoused
- Drop Ship Items: Non-inventory for resale, shipped direct from vendor
- Special Order: Non-inventory ordered per customer request
- Kits/Bundles: Kit items combining related products
Retail Item Patterns
Typical Item Structure
- Matrix Items: Products with Size/Color variations
- Simple Items: Non-variant products
- Gift Cards: Gift certificate items
- Services: Delivery, assembly, warranty services
Software/SaaS Item Patterns
Typical Item Structure
- Subscription Items: Recurring revenue products (monthly, annual)
- License Items: Perpetual or term licenses
- Implementation Services: Professional services items
- Support/Maintenance: Ongoing support items
- Usage Items: Consumption-based pricing (API calls, storage)
Professional Services Item Patterns
Typical Item Structure
- Time & Materials Services: Billable by hour/day
- Fixed Fee Services: Project-based deliverables
- Retainer Services: Ongoing availability fees
- Expense Pass-through: Reimbursable expenses
Industry Pattern Summary
| Industry | Primary Item Types | Key Considerations |
|---|---|---|
| Manufacturing | Assembly, Inventory | BOMs, costing, lot/serial |
| Wholesale | Inventory, Non-inventory | Pricing, vendor management |
| Retail | Matrix, Inventory | Variants, promotions |
| Software/SaaS | Service, Non-inventory | Revenue recognition |
| Services | Service | Billing rates, time tracking |
| Nonprofit | Service, Non-inventory | Fund accounting |
| Healthcare | Inventory, Service | Compliance, lot/serial |