Essential NetSuite Features Every Architecture, Engineering, and Construction (AEC) Firm Needs
Introduction
Over the years, we have supported several Architecture, Engineering, and Construction (AEC) firms in implementing NetSuite as their primary business operations software. Most of these clients are small to medium-sized organizations with annual revenues exceeding $10 million—a threshold often signaling readiness to move beyond QuickBooks or Fishbowl. While it involves a higher investment, the NetSuite features for AEC firms empower companies to scale efficiently, offering the flexibility and advanced capabilities needed for sustained growth.
This article will discuss three features that benefit AEC organizations (building contractors, installers, wholesale distributors, etc.). These features, coupled with AlphaBOLD’s AEC and NetSuite expertise, allow organizations to abandon Excel and manual processes for good.
Let us review the following:
- Custom Segments and MasterFormat Codes
- Linking PO’s and Vendor Bills to Projects
- Quote to Project Task Solution
1. Custom Segments and MasterFormat Codes
MasterFormat is a standardized system of codes and titles used in AEC projects to ensure efficient collaboration between architects, builders, and project managers. These coding standards connect design, building products, preconstruction activity, estimates, contracts, and construction. They apply to all phases of a construction project but are frequently used for procurement or project costing.
Below are some of the benefits of construction code tracking features within NetSuite for AEC firms:
- They help with activity-based costing and resource management (typical to construction and AEC projects). This lets managers see where the money is being spent and how the expenses affect the organization’s overall productivity.
- They allow project managers and executives to identify profitable activities easily. This visibility ‘paves the way’ for investments in productive areas by providing the data for capital allocation commitments.
- They identify excessive costs that may allow companies to outsource some activities to more efficient and less costly specialists. This, in turn will positively affect the company’s bottom line.
Typically, the construction codes are used during the estimation process and are included in the original specifications/blueprints. They are extremely useful on timesheets as organizations can then quickly identify labor costs by project activity. Finally, code tagging is beneficial on procurement transaction (Purchase Orders and Purchase Invoices) lines as project managers can then track total material cost per project activity.
In NetSuite, we propose importing MasterFormat codes in the format of a custom segment. To learn more about ‘custom segments’.
Further read ‘Managing You Financial Segments in NetSuite’ for more insights.
MasterFormat uses the following divisions. You may not need to track all of them as they may not all be relevant to your industry or business.
| Code | Construction Cost Code Description |
|---|---|
|
00 |
Procurement and contracting requirements |
|
01 |
General requirements |
|
02 |
Existing conditions |
|
03 |
Concrete |
|
04 |
Masonry |
|
05 |
Metals |
|
06 |
Woods, plastics, and composites |
|
07 |
Thermal and moisture protection |
|
08 |
Openings |
|
09 |
Finishes |
|
10 |
Specialties |
|
11 |
Equipment |
|
12 |
Furnishings |
|
13 |
Special construction |
|
14 |
Conveying equipment |
|
21 |
Fire suppression |
|
22 |
Plumbing |
|
23 |
HVAC |
|
25 |
Integrated automation |
|
26 |
Electrical |
|
27 |
Communications |
|
28 |
Electronic safety and security |
|
31 |
Earthwork |
|
32 |
Exterior improvements |
|
33 |
Utilities |
|
34 |
Transportation |
|
35 |
Waterways and marine construction |
|
40 |
Process interconnections |
|
41 |
Material processing and equipment handling |
|
42 |
Process heating, cooling, and drying equipment |
|
43 |
Process gas and liquid handling, purification, and storing equipment |
|
44 |
Pollution control equipment |
|
45 |
Industry-specific manufacturing equipment |
|
46 |
Water and wastewater management |
|
48 |
Electrical power generation |
Now that the cost codes are in your system, the next question is how do you tie them to your transactions and your financials? NetSuite features for AEC firms offer several methods to achieve this:
1. Setting the ‘construction code’ segment values on your SKU’s/Service Items
By storing codes on service (or inventory) items, organizations will have the ability to automatically default them (tag them) on either procurement or sales transaction lines.
- When the service line is added to the PO or the Vendor Bill transaction, the construction code will be sourced from the service item, as shown below:
- Note: We recommend configuring the segment (cost code) to post to the general ledger (GL). When the posting transaction is saved, the cost code sourced from the related service/inventory item will be tagged on GL posting line(s).
- From here, every ‘construction code’ will post to GL, which will allow the users to ‘slice and dice’ financial data on NetSuite’s (canned) financial reports (below screenshot shows the net income for a construction survey job which was billed to the client).
2. Tying the construction code segment to time entries
For the accounting departments, manual classification and re-classification of time entries submitted via email or Excel is an absolute nightmare. This time-consuming process creates serious month-end closing delays.
With a simple five-minute configuration on the service item record and the segment, NetSuite features for AEC firms can automate these codes, requiring no user intervention in the timesheet interface. See our example below:
Take Control of Your Project Costs and Resources
Discover how you can leverage NetSuite’s advanced project tracking and costing features tailored for AEC industries. Speak with an AlphaBOLD expert to get a curated demo.
Request a Demo2. Linking PO’s and Vendor Bills to Projects
Before we continue, let us briefly touch on why it is important to link POs and Vendor Bills to projects.
Projects in NetSuite have pre-built Profit and Loss (P&L) reporting; however, to properly take advantage of it, you must ensure that both revenue and expenses are properly tied to the project and its tasks.
Through its ‘charge-billing’ feature, NetSuite features for AEC firms effectively link revenue transactions to the related project. However, project expense and cost tracking aren’t as straightforward. To address this, NetSuite introduced the free ‘Purchase to Project’ SuiteApp.
Below are the quick instructions on how to install the SuiteApp and test its functionality:
- Go to the ‘SuiteApps’ tab in your NetSuite.
- In the ‘Search’ box type in ‘Purchase to Project’ and press [Enter] on your keyboard.
3. Next, click on ‘Purchase to Project’ box (illustrated above) and click on [Install] button shown below.
4. The system will show the following message
5. When the process is completed, you will see the following
6. We are almost done. Now that SuiteApp is installed, go to your project (List > Relationships > Projects).
7. Open your project in view mode, and click on your new ‘Procurement’ tab.
8. Next, click on [Create Purchase Order] button
9. Important, as you are populating your Purchase Order, pay close attention to your PO lines (Customer column field in particular). This field should be auto-populating as you are adding item lines to your purchase order.
10. When you are ready, [save] the PO. Because of the line linking explained in step 9, you will now see your PO on the project. Moreover, the associated Vendor Bill will be reflected on your project’s P&L
Let us know if you have questions or if you need help with the installation.
Note:The costs will be tied to the project, but they will not be broken down by specific cost centers / project tasks. The granular allocation and tagging will be accomplished by the first feature (Custom Segments and MasterFormat Codes) we covered above.
3. Quote to Project Task Solution
Most of our prospects frequently complain that they do not manage estimates efficiently, and that they typically create them in Excel or Word Documents. With robust NetSuite features for AEC firms, the CRM functionality enables them to create quotes and estimates and email clients directly from their ERP. Once approved, companies can generate Contracts (Sales Orders) and link them to projects.
Unfortunately, there is no straightforward way to transform a quote into project (lines) tasks. Not only do users need to enter the quote, but then they need to re-enter (copy) the elements from the quote to the project lines. This is clearly time-consuming and unnecessary.
To help our clients, we created a custom solution which speeds up the quote-to-project transformation. Let us review this process together.
1. The customer will normally enter an estimate (quote) that closely matches the future project and its tasks. They will then create a project from the quote (as illustrated below).
2. On the line-level, we added couple of custom fields (‘Billing Class’ and ‘Resource’). These are meant for ‘resource assignment’ on the project schedule (task) lines. This activity is time consuming, and we felt that it would be smart to automate it.
- Note, when we set up the items, we create parent services which for us represent milestones. These can group various tasks and generate parent tasks on the project schedule. See our example, below:
3. When the project and the lines are added to the quote and the quote is approved, the user will check ‘Final Quote Approval’ checkbox. This will show [Create Project Tasks] button.
4. Before the user clicks on the button, the project schedule is empty.
5. When the user clicks on [Create Project Tasks] button, a dialogue box will inform the user that the project task creation is in progress.
6. Within seconds, the solution will generate a project task schedule and related assignments.
Experience Project Efficiency with NetSuite
Don’t just read about the benefits—experience them firsthand! Schedule a live demo to explore NetSuite features for AEC firms and see how they can enhance project tracking and cost management.
Request a DemoConclusion
In summary, we reviewed three of the many NetSuite features for AEC firms that make NetSuite ERP an ideal fit for the industry. It’s essential to leverage NetSuite’s processes and native functionality to minimize lengthy implementations and avoid rework. Furthermore, we recommend partnering with a firm experienced in the AEC sector (such as AlphaBOLD) that can methodically tailor a NetSuite solution to fit your organization’s needs. While this may seem trivial to some, it’s a crucial step toward a successful ERP implementation.
Bonus read: ‘Why ERP Implementations Fail?’
If you have any questions about the features we shared with you, please reach out to our team. We will be happy to assist you!
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