Enhance Business Performance with NetSuite's Benchmark 360 SuiteApp

In the fast-paced world of business today, understanding key performance indicators (KPIs) is crucial for sustaining a robust financial standing. When clients mention metrics like Days Sales Outstanding (DSO) or Days Payable Outstanding (DPO), many businesses scramble to generate reports or saved searches. Thankfully, NetSuite provides an innovative and reliable solution: the Benchmark 360 SuiteApp.

The Benchmark 360 SuiteApp empowers you to benchmark your company’s key metrics against other businesses in the same industry and region, enhancing your performance. This SuiteApp offers a comprehensive dashboard where you can access vital industry benchmark data, including Top 25%, Median, and Bottom 25% for five preselected KPIs.

These benchmark KPIs encompass Days Cash on Hand, Days Sales Outstanding, Days Payable Outstanding, Employee Turnover Rate, and Revenue per FTE. NetSuite sources these industry benchmarks from the American Productivity and Quality Center (APQC).

With the Benchmark 360 SuiteApp, you can:

• Review industry benchmarks for five KPIs included in the dashboard
• Define performance metrics and set adjustable target values for each metric
• Compare performance metrics against other companies in the same industry and region
• Map different subsidiaries to the corresponding industry and region to view benchmark data
• View quarterly benchmark data by region for a selected subsidiary 
• Explore NetSuite products and features relevant to your industry and region to enhance your KPIs 
• Utilise NetSuite content and articles as guides to implement best business practices

Installing the Benchmark 360 SuiteApp

To get started with Benchmark 360, follow these installation steps:

1. Navigate to SuiteApps in NetSuite.
2. Enter Benchmark 360 in the search field.
3. Click on the SuiteApp tile, then select Install.
4. Confirm the installation by clicking OK.

Prerequisite: Ensure you have a NetSuite OneWorld account.

Setting Benchmark 360 preferences:

Use the Benchmark 360 preferences page to set the conditions for displaying the benchmark data in the dashboard. The scope of data shown on the dashboard depends on the combination of industry, region, and workbooks you select.

Users with an Administrator role can set the preferences for Benchmark 360 dashboard.

Once installed, you can customise the dashboard to display relevant benchmark data. Follow these steps:

1. Navigate to Lists > Benchmark 360 > Benchmark 360 and click Preferences.
2. Under Account Preferences, set values for:
   • Industry: Select your business type.
   • Region: Choose your operational area.
   • Company Size: (Optional) Indicate your company’s size.
3. In the Classification section, verify the KPIs:

   • Key Performance Indicator - The list of KPIs under this column are preselected and are not editable:

     • Days Cash on Hand

     • Days Sales Outstanding

     • Days Payable Outstanding

     • Employee Turnover Rate

     • Revenue per FTE

   • KPI Workbook- This column shows all the preselected workbook for each KPI except for Employee Turnover Rate which does not require a workbook.

     If you do not select a workbook or have selected an incorrect workbook, no data can be shown in the dashboard.

     You can change the workbook by selecting from the dropdown list or create a custom workbook. To view the guidelines for creating a custom workbook, see Guidelines for Creating a Custom Workbook for Benchmark 360.

   • Target-Enter numerical values for the KPI target. The values you enter only applies to the parent subsidiary. If left blank, the system will use the median benchmark from APQC.

4. Click Save.

5. On the Subsidiary subtab, add values for the following columns for each subsidiary:

   • Region

   • Industry

   • KPI Workbook

   • Target

   This field does not require a thousands separator but requires a period (.) as a decimal separator.

   The system shows all the active subsidiaries available in your account except for parent subsidiary.

6. Click Save.

Understanding Key Metrics

Benchmark KPIs let you gain insights into how well your company is performing against competitors in the same industry. The dashboard provides data for the Top 25%, Median, and Bottom 25% of each KPIs.

The benchmark KPIs include Days Cash on Hand, Days Sales Outstanding, Days Payable Outstanding, Employee Turnover Rate, and Revenue per FTE.

On a quarterly basis, the benchmark data refreshes for these dashboard KPIs to provide the latest benchmark information for your industry and region.

Days Cash on Hand (DCOH): This metric estimates how many days your company can cover its operating expenses. A higher DCOH indicates lower financial risk.

• Formula:
  DCOH = (Bank Balance + Other Current Assets) / (Operating Expense / Number of Days)

Days Sales Outstanding (DSO): Reflects the average number of days it takes for customers to pay their invoices. A lower DSO indicates better cash flow.

• Formula:
  DSO = Average days open of fully paid invoices for the month

Days Sales Outstanding (SDO) = (36 + 30 + 18)/3 = 28

Days Payable Outstanding (DPO): This metric evaluates how many days, on average, your company takes to pay your creditors. A higher DPO can be an indicator that your company can delay payments to use the funds for short-term investments to increase cash flow. Otherwise, it can show if the use of resource funds may be inefficient.

• Formula: Days Payable Outstanding (DPO) = Average Days Open of Fully Paid Bills for the Month.  Similar to the Days Sales Outstanding calculation, if Company B has two vendor bills settled for the month of May:
  

Days Payable Outstanding (DPO) = (26+16)/2 = 42/2 = 21

Limitations of Benchmark 360

While the Benchmark 360 SuiteApp offers many benefits, it does have some limitations:

• Fixed KPIs: The KPIs included in the dashboard are fixed and cannot be customized.
• Currency Conversion: Currency conversion is unavailable for currencies without an exchange rate in NetSuite, resulting in a USD display for unsupported currencies.

Conclusion:

The NetSuite Benchmark 360 SuiteApp is an innovative and reliable tool that empowers businesses to benchmark and enhance their key performance metrics. By utilizing this SuiteApp, you gain a trustworthy understanding of your performance in comparison to industry standards, thereby boosting your operational effectiveness. In today’s dynamic business environment, NetSuite’s Benchmark 360 SuiteApp provides a comprehensive and supportive solution for tracking key performance indicators (KPIs) such as Days Sales Outstanding (DSO) and Days Payable Outstanding (DPO), offering invaluable insights to elevate your business to new heights.

Ready to transform your business insights? Discover the Benchmark 360 SuiteApp today or reach out to us for more information.