Learn How To Intelligently Manage NetSuite Change Orders

This article is relevant if you are working with NetSuite sales orders and you need control over change orders.

Background

A long-time client who serves building architects and interior designers for custom lighting fixtures sought to save significant time and gain more control over their sales change order processes. In their business, it is customary for one or more sales orders to encompass the concept of a project. A project may take over a year to complete and it is common for our client’s customer to need to control a budget for the total amount to be spent. Note, readers may be interested in my project-related articles, Learn How To Measure NetSuite Project Margin and Project Task Coordination for NetSuite Driven Sales Organizations.

The client came to us seeking a solution to gain efficiencies and to formalize change order processes. Before we developed a solution for them, the client would develop an Excel spreadsheet of all the items and line elements in the sales order that needs to be modified. They would then determine the detailed changes desired by their customer. The differences between the original sales order to the desired change represented a possible impact on the budget.

The budget may be impacted positively or negatively.  It would take work to organize the information so the client’s customer could isolate the requested modifications and ultimately determine if they wanted to commit to the change.

Streamlining NetSuite Change Order Processes

To solve this problem, I designed and worked with our team to develop a concept of a Change Order structure that mimicked a Sales Order.  You might ask, “why not use an Estimate record”?  The reason is that the change order may result in a net negative amount.  You can’t express a net negative situation with built-in NetSuite non-financial-based sales transactions.  Hence,  we went with a Change Order concept built with custom records to minimize any impact on existing commitments. Thus, with this concept, we were able to achieve the following:

1. Copy Sales Order to Change Order: a sales order is copied to the Change Order structure so that all the header and line information elements can be manipulated.
2. Isolate Changes: Line information can be changed by modifying quantities, prices, and estimated costs.  Additional lines can be added. Quantities can be removed.  Header information, such as destination shipping address, can also be changed.
3. Financial Impact: all changes are summarized to show the financial impact allowing individuals to quickly assess the meaning of requested changes.  This makes it clear and easy to commit to the change.
4. Packaging Changes: all the changes can then drive the generation of a high-quality PDF (click image to see sample) so that it can be presented to the customer. This helps all parties commit and confirm what has changed to understand the impact on the budget.
5. Approval Status: One or more change orders can be generated. Once the customer is satisfied, it can be marked approved.
6. Constitute New Change Order: for additions, a new sales order is generated from the change order record.  Similar to the “created from” built-in reference, linkages are provided to indicate the source of the new order.  This helps tie together the original order to the official new change sales order.
7. Quantity Reductions: where there are quantity reductions, we modify the original sales order (assuming the item has not been fulfilled) so that we do not deliver on previous commitments.

Click on related images to get a feel for the application.

NetSuite Change Order Video Demonstration (6:32)

To help illustrate the power of managing change orders under this method, I interviewed our senior consultant, Mathieu L., who produced the leadership to develop the application with our technical analyst, Carl Z.

Click here to see the video (6:32).

Solve your NetSuite Change Order Challenges

The application demonstrates the power of the NetSuite platform. Like all the work we do for clients, this software pattern can be a template to solve another NetSuite Change Order challenge.   As a NetSuite Systems Integrator, our model is to provide all of our algorithms without license charge to NetSuite customers.

If you found this article meaningful, feel free to receive notifications of new posts as I publish them. If you are ready to take control over your NetSuite change order situation, and this pattern is applicable to you, let’s have a conversation.

Marty Zigman

Holding all three official certifications, Marty is regarded as the top NetSuite expert and leads a team of senior professionals at Prolecto Resources, Inc. He is a former Deloitte & Touche CPA and has held CTO roles. For over 30 years, Marty has produced leadership in ERP, CRM and eCommerce business systems. Contact Marty to set up a conversation.

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