As much as a skilled team of experts with the right approach can take much of the pain out of an implementation project, multiple complexities arise when
As much as a skilled team of experts with the right approach can take much of the pain out of an implementation project, multiple complexities arise when implementing NetSuite internationally.
It’s vital that businesses understand the statutory accounting and tax requirements present in the country or countries of the implementation as well as NetSuite’s offerings and limitations as related to the statutory requirements.
For this reason, I thought it would be a great idea to address some pretty key points when it comes to localizing NetSuite for international accounting and tax compliance requirements (e.g. direct and indirect taxes, tax accounting, preparation of statutory financial statements and country by country reporting).
I’ll tackle the topic across two blog posts by addressing these four important topics:What do the terms “internationalization” and “localization” mean? And how are they different? How does NetSuite support “internationalization” and “localization”?What needs to be considered in relation to statutory accounting and tax compliance requirements when implementing NetSuite internationally?How does NetSuite support international statutory compliance requirements?Where can I get more information about localizing NetSuite for international businesses?
WHAT DO THE TERMS “INTERNATIONALISATION” AND “LOCALISATION” MEAN? HOW ARE THEY DIFFERENT? HOW DOES NETSUITE SUPPORT “INTERNATIONALISATION” AND “LOCALISATION”?
Firstly, let’s lay out the definition of the terms as defined by the W3C. The World Wide Web Consortium (W3C) is the main international standards organization for the World Wide Web. The W3C also engages in education and outreach, develops software and serves as an open forum for discussion about the Web:
internationalization: “the design and development of a product, application or document content that enables easy localization for target audiences that vary in culture, region, or language”
localization: “refers to the adaptation of a product, application or document content to meet the language, cultural and other requirements of a specific target market (a local_e)_”
Within NetSuite, “internationalization” requirements to consider include language, layout, icons, workflows and country-specific data whereas “localization” requirements to consider include translation, legally required data, cultural workflows and reports.
Many countries have similar statutory accounting and tax requirements and thus localization drivers are often common. These include:
Within NetSuite, example localization solutions could include:
NetSuite’s core capabilities that support and enable flexible “localization” include:
In summary, when undertaking an international NetSuite implementation, keep in mind the flexible options that NetSuite provides to support both “internationalisation” and “localisation” including:
WHAT NEEDS TO BE CONSIDERED IN RELATION TO STATUTORY COMPLIANCE REQUIREMENTS WHEN IMPLEMENTING NETSUITE INTERNATIONALLY?
In simple words, “statutory” means the laws and regulations. Companies today need to comply with what can be a daunting multitude of national and international legislation and regulations. Many companies are rethinking their approach to managing global compliance and reporting by optimizing their technology, processes and resources to ensure compliance and prevention of regulatory issues.
Statutory laws and regulatory obligations may vary according to country and/or industry, but typically include:
At times you may hear consultants utilize “statutory” and “regulatory” reporting and compliance synonymously, but there are differences:
Statutory requirements refer to those requirements that are mandatory by Law while Regulatory requirements are those which are imposed by independent agencies or bodies. Statutory reporting is the mandatory submission of financial and non-financial information to a government agency. Each country and often industry has its own set of laws and regulations (statutes) that mandate compliance requirements. As an example, in many countries, International Financial Reporting Standards (IFRS) have replaced country-specific Generally Accepted Accounting Principles for statutory reporting.
Within a NetSuite implementation, especially an international implementation, the following are the most common statutory compliance requirements that come into play:
Local and/or industry specific legal regulation process and/or reporting requirements
Financial systems and/or software certification
Accounting standards
Currency controls and standards
Tax calculations
Withholding Tax
Tax reporting & Returns filing
Tax Audit Files
Commercial document layout
Electronic payments
Dunning processes/regulations
In conclusion, all of the above should be examined and discussed in detail during requirements gathering to ensure NetSuite can be correctly configured to meet the statutory compliance requirements for both your local and international implementation. To ensure compliance during an implementation, the best practice is to work in concert with a local/in country auditor to make certain all standards and conventions are met.That’s it for part one of this post. We’ll tackle part two next week, but in the meantime, if you have any questions about NetSuite accounting and tax compliance, either internationally or locally, do not hesitate in reaching out to our team and we’ll be able to put you on the right path towards stress free accounting.
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