NetSuite Advanced Intercompany Journal: Tutorial & Examples

One feature offered by NetSuite exclusively for OneWorld accounts is called the advanced intercompany journal. It gives users the ability to record debits and credits that can then be posted to ledger accounts for transactions that take place between an originating subsidiary and multiple recipient subsidiaries. Users can change the transaction currency to any currency set up in the system whenever they use advanced intercompany journal entries. 

The table below summarizes the key concepts covered in this article.

The main purpose of creating an intercompany journal is to adjust the value of a set of accounts without entering transactions such as invoices or bills. The advanced version of intercompany journal entries allows the user to define multiple receiving subsidiaries, change the base currency to any currency available in the system, and use auto-balance functionality. 

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The table below summarizes the essential differences between simple and advanced intercompany journals.

Users can specify the originating subsidiary and multiple receiving subsidiaries when using an advanced intercompany journal entry and can also change the transaction currency to any system-configured currency. Advanced intercompany journal entries behave like simple intercompany journal entries in all other respects.

Advanced intercompany journal entries require at least edit-level access to the Make Journal Entry permission. They also comply with subsidiary and account constraints.

To make an advanced intercompany journal entry, go to Transactions > Financial > Make Advanced Intercompany Journal Entries. 

Fill in the information needed in the required fields; in the example below, these are subsidiary name, date, currency, GL account code, amount, and department.

Click the Auto Balance button. Note that users must enable the Automated Intercompany Management feature to use this functionality.

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Click Save to generate a Journal number. 

It is necessary to click on the Approved button to post the journal if the Require Approvals on Journal Entries accounting preference is enabled. 

Advanced Intercompany journal entries may be either book-generic or book-specific. 

Book-Generic Advanced Intercompany Journal Entries 

A book-generic advanced intercompany journal entry affects all accounting books. Except for the Accounting Books subtab, all fields displayed in the advanced intercompany journal entry are for the primary book. The Accounting Books subtab contains the subsidiary accounting records for all other subsidiaries. All subsidiaries affected by the advanced intercompany journal entry must share the same secondary accounting books to generate the full general ledger impact. If a secondary book is linked to only one or a subset of subsidiaries, only a portion of the entry posts for that book is displayed. There is no impact on a secondary book if it is not associated with any subsidiary.

The Currency field represents the posting's transaction currency. It appears in all the books. Users can choose any currency available in the system for advanced intercompany journal entries. Users are not limited to the currencies of the subsidiaries they have chosen. If the secondary books' base currencies differ from the transaction currency for other subsidiaries, foreign currency journal entries are created in the secondary books for each subsidiary.

To create a book-generic advanced intercompany journal entry, go to Transactions > Financial > Make Advanced Intercompany Journal Entries.

Book-Specific Advanced Intercompany Journal Entries

The advanced intercompany journal entry posts to only one book in book-specific advanced intercompany journal entries. In the primary form, book-specific advanced intercompany journal entries include an Accounting Book list.

The transaction currency must be any of the currencies used by the subsidiaries involved. As a result, the posting in one subsidiary is either a base or non-base currency journal entry. It could be a foreign currency journal entry in the others.

The Line subtab of the intercompany journal entry record shows the exchange rate between the primary book's subsidiary lines and the selected currency. When Foreign Currency Management is enabled, the secondary books' base currencies and exchange rates may differ. The secondary book exchange rate defaults to the system exchange rate between the transaction and base currencies.

To create a book-specific advanced intercompany journal entry, go to Transactions > Financial > Make Book Specific Advanced Intercompany Journal Entries.

An advanced intercompany journal entry in NetSuite OneWorld documents the impact of transactions from the originating subsidiary to multiple receiving subsidiaries.

Multiple intercompany journal entries can be imported from another system into NetSuite. Each import job may contain information for any combination of classes, departments, locations, and subsidiaries.

To import transactions, go to Setup > Import/Export > Import CSV Records. 

Select Transactions as the Import type, then choose Advanced Intercompany Journal Entry as the Record type. 

Advanced Intercompany Journal Entry CSV File Requirements

• Each imported advanced intercompany journal entry must contain a minimum of four lines: one debit and one credit for both the originating and receiving subsidiary. When using the simple import assistant, only this requirement is applicable.
• The CSV files must contain both header and line-level information.
• Users can import data into a single CSV file or multiple files, such as header data in one file and line-level data in another. Each transaction is identified by its Entry No., External ID, or (for updates only) Internal ID value. This value must be present in every row of the CSV files.
• If both header-level and line-level data are included in a single file, each row of the CSV file represents a transaction line, and repetitive header-level field values must be included in each row.
• Each line must contain a value that is not null. Zero is acceptable.

Advanced Intercompany Journal Entry Import Example

The following example creates a record for an advanced intercompany journal entry.

The following are some important limitations of advanced intercompany journals:

• To make an advanced intercompany journal, users should have at least four line items to submit.
• The limit for advanced journal entries submitted via CSV import is 10,000 lines per transaction.
• Regular intercompany journal entry scripts and workflows do not work with advanced intercompany journal entries. For advanced intercompany journal entries, users must create separate scripts and workflows.
• Users are not permitted to use a default intercompany journal entry auto-balance account if the account contains a currency or subsidiary restriction that renders the line invalid. If the default auto-balance account currency is restricted to Japanese yen, for instance, users cannot use it with a journal whose currency is set to Canadian dollars.
• Book-specific advanced intercompany journal entries do not support the Auto-Balance feature.

Here are some tips for efficiently processing advanced intercompany journal entries:

• When transactions are identical, go to the Actions tab, select Make Copy to copy the previous transaction, and then make the necessary changes. 
• When line details are identical, click Copy Previous and then make any necessary changes.
• As much as possible, include all relevant information related to the transaction, even if it is not required. This will help in identifying the transaction in the future.
• Attach all the files and notes related to the transaction on the Communication subtab. 

Here are some tips for efficiently processing advanced intercompany journal entries:

• When transactions are identical, go to the Actions tab, select Make Copy to copy the previous transaction, and then make the necessary changes. 
• When line details are identical, click Copy Previous and then make any necessary changes.
• As much as possible, include all relevant information related to the transaction, even if it is not required. This will help in identifying the transaction in the future.
• Attach all the files and notes related to the transaction on the Communication subtab. 

The complexity of modern business relationships has increased significantly, especially in this era of mergers and acquisitions. Properly accounting for all transactions that occur among organizations can be challenging and time-consuming if the team is responsible for more than one subsidiary. With NetSuite's advanced intercompany journal, businesses with more than one subsidiary have everything they need to handle transactions between subsidiaries promptly while maintaining accuracy.