Best Practices for AI Flux Explanations

Last updated: October 22, 2024

To make the most out of Numeric AI and auto-generate useful flux analysis explanations, evaluate the different dimensions included in the AI analysis:

  • GL Accounts: Consider whether separate GL accounts can help provide additional specificity to your data. For example, are there different marketing channels that could each represent a GL account?

  • Name: Are any revenue or expenses missing the customer or vendor name? Ensuring this inclusion will allow for analyses to be prepared at a name-specific level.

  • Departments: Do you consistently use departments within the GL? Are departments granular enough to provide specificity on the area of the business impacted by the change?

  • Location: Do different locations in your business drive operational decisions? If so, ensure that expenses are accurately coded to each location.

  • Class: One of the more flexible options in NetSuite, the class dimension can be used to capture various company dimensions. Consistency across class as well as descriptive names to a class can lead to better flux explanations.

For each of the above dimensions, Numeric monitors can be a helpful resource to ensure consistency of use by alerting you when the above are missing or whether the match between dimensions (e.g., GL and Department) does not align with expectation. Refer to📄 Creating Reports & Monitors.

In addition to the defined dimensions above, memo fields from transaction lines within NetSuite are also included in the generative AI flux explanations. Below are some examples of helpful memos that will lead to more meaningful flux explanations.

For certain transactions, the memo field may be automatically populated by NetSuite (e.g., prepaid amortization). Your NetSuite Admin may be able to provide additional scripting to ensure these memos are populated with meaningful explanations. Refer to this link for an example of this type of scripting.

Helpful Memo Descriptions

1. Include Relevant Dates and Parties

  • Helpful NetSuite Transaction Line Memo: "Travel expense incurred on March 5, 2024, for ABC client meeting in New York."

  • Less Helpful NetSuite Transaction Line Memo: "Travel expense for client meeting."

Reporting Tip: For certain expense accounts, consider building a Numeric report that will update automatically with new NetSuite data. This will let you review memos before close to ensure they have enough details - particularly if there is upstream involvement from other business owners who may not be aware of the memo needs (e.g., expense reimbursements automatically posted to NetSuite). You can also build a monitor to let you know if the memo is blank!

2. Identify Parties Involved

  • Helpful NetSuite Transaction Line Memo: "Revenue from sale to Acme Corp. on April 15, 2024, for custom software development."

  • Less Helpful NetSuite Transaction Line Memo: "Sale revenue."

Dimension Tip: Ensuring customer names are populated on revenue transactions is a great way to ensure AI can compare month-over-month (or quarter-over-quarter) activity across customers. If you don't bring customer-level detail into Numeric, consider whether GL names and Classes could help provide additional meaning to the period-over-period changes.

3. Explain the Purpose of the Transaction

  • Helpful NetSuite Transaction Line Memo: "Marketing expense for Google Ads campaign targeting new product launch, April 2024."

  • Less Helpful NetSuite Transaction Line Memo: "Marketing costs."

Dimension Tip: If your marketing GL accounts or departments are specific enough, the purpose can be captured within those. However, it never hurts to pull additional information from the invoice into the memo field wherever possible!

4. Incorporate Unique Identifier Codes

  • Helpful NetSuite Transaction Line Memo: "Amortization of Software Development Costs, Project Code: SD2024, March 2024."

  • Less Helpful NetSuite Transaction Line Memo: "Amortization costs."

Formatting Tip: Set up any automated amortization templates to include project or asset-specific codes in memos, ensuring each transaction can be easily traced back to its origin.

5. Link Transactions to Specific Periods or Events in the memo content

  • Helpful NetSuite Transaction Line Memo: "Prepaid Rent Expense Allocation for April 2024, per Lease Agreement #4567."

  • Less Helpful NetSuite Transaction Line Memo: "Rent expense."

Dimension Tip: Other dimensions such as the GL (if your GL account is descriptive by lease) or Location (if your location dimension can be specific to a lease location) may also assist in augmenting this explanation and therefore require a less specific memo.

6. Utilize Hierarchical or Nested Categorization for Complex Transactions

  • Helpful NetSuite Transaction Line Memo: "Interest Expense - Long-term Debt: Bond Series A, Coupon Payment, March 2024."

  • Less Helpful NetSuite Transaction Line Memo: "Interest payment."

Formatting Tip: For transactions with multiple layers, such as those involving complex financial instruments, employ a nested categorization format. Oftentimes, the structure (i.e., accounts debited and credited, departments, location, etc.) of these entries can be consistent across periods. Therefore, consider layering in the necessary details to the memo field of a journal and copying that journal each month to prevent rework. Don't forget to include the Numeric ID in the memo field which can automatically link back to your checklist! Refer to📄 Automatically tracking journal entires.

Example Custom Instructions

Custom flux instructions are available when creating flux templates. These can advise the AI writer to follow a certain format or language style when drafting the explanation. Teams can create multiple templates that apply to different types of accounts. For example, Revenue, Payroll, and OpEx might each need a different format of explanation or might need to consider different dimensions.

Tip: Incorporating numbered custom instructions separated by periods will often produce explanations more in line with expectations.

Brief Explanation

Goal: Provide a succinct response without formal headers and a maximum number of bullet points (e.g., 2 bullet points).

Example Instruction: No Header. Max 25 Words. Max 2 Bullets.

Bullets Only Explanation

Goal: Provide a response using only bullets with a limit on the number of bullets and words.

Example Instruction: No Header. Only Bullets Max 4 Bullets. Max 50 Words.

Paragraph Only Explanation

Goal: Provide a brief paragraph format with a limit on the number of words used.

Custom Instructions: No Bullets. Max 50 Words.

Lengthy Explanation

Goal: Summary header with a minimum number of words and bullets required.

Custom Instructions: 1) First Line Summary of Biggest Change by Department. 2) Minimum 5 Bullets. 3) Minimum 200 words.