NetSuite multi-book accounting functionality allows users to keep multiple sets of financial records based on a single set of real-time financial transactions. This functionality supports several accounting and reporting standards, allowing businesses to comply with various managerial and regulatory requirements.
NetSuite multi-book accounting provides many advantages to businesses by doing all the following:
- Helping provide a variety of financial reports, each tailored to fit a specific function
- Helping generate comprehensive, transaction-based reports for each accounting book
- Permitting automated posting to multiple accounting books based on predefined accounting rules
- Allowing the creation of manual journal and intercompany journal entries to modify financial results on a per-book basis for businesses
- Allowing businesses to close and reopen accounting periods to process or modify one accounting book without affecting the other books
- Helping maintain data accuracy across different accounting books
- Enabling customization, like the implementation of SuiteApps to produce book-specific financial results
- Helping run a consolidated financial statement on a per-book basis
NetSuite multi-book addresses challenges associated with the chart of accounts, foreign currency management, revenue and expense management, and accounting book period close management.
Summary of Key Concepts
The table below shows the features offered by the NetSuite multi-book accounting system.
Multi-Book Accounting and Choosing Secondary Accounting Books
Full Multi-Book Accounting enables up to five active accounting books, including the primary. A business can add up to four secondary accounting books that utilize a different chart of accounts, currency, accounting rules, or a combination of these.
Consider the following questions to determine the number of secondary accounting books the business requires:
- Aside from the company's or each subsidiary's base currency, what other currencies does the business wish to utilize to monitor accounting records?
- Does the business plan to have a different chart of accounts for each accounting book? If so, what accounts must be added, and how do they link to the accounts in the principal accounting book's chart of accounts?
- Does the business need to use different accounting standards for revenue recognition, expense amortization, and depreciation of fixed assets in various account books?
Book-Specific vs. Book-Generic Records
There are two categories used to group NetSuite records in multi-book accounting: book-specific and book-generic.
Book-specific records are those that are created for only one book. This includes the following transactions:
- Intercompany journal entries and book-specific journal entries
- Journal entries for revenue commitment and reclassification
- Revenue and expense allocation
- Schedules for revenue recognition and expense amortization
- Depreciation schedules for fixed assets and journal entries
Book-generic records are those created and shared by all accounting books, including:
- All transaction types except those that are book-specific
- Entity records
- General ledger
- CRM records
Using Rules
Using Rules
Multi-Book Accounting Features
This section will help you better understand the features that NetSuite multi-book accounting has to offer.
Chart of Accounts Mapping
This feature allows businesses to configure supplementary accounting books to post to accounts other than those used by the primary book. Unless explicitly mapped, subsidiary accounting books use the same account values for transactions as the primary book.
The guidelines for choosing which accounts to use for different accounting books are provided by the mapping of the chart of accounts. To determine which mapping rule to apply, the system first identifies the account from which the transaction originated. If the account is derived from the item record, the system applies mapping rules for item accounts. If the user specifies the account on the transaction record itself, global account mapping is utilized.
- Item Account Mapping is when an item determines the account to which the transaction will be posted. The image below illustrates how to book transactions using an item record and the accounts affected by the transaction.
The image below illustrates the accounts affected when posting transactions with item code B10166-00.
- Global Account Mapping is when the user manually selects an account from the chart of accounts to post a transaction. The image below shows the selection of an account to post a transaction.
Chart of accounts mapping supports imports of comma-separated value (CSV) files, which saves time and prevents errors. This data can be used to add or update many records simultaneously, eliminating the need for manual data entry.
Foreign Currency Management
This feature in multi-book accounting provides the ability to manage foreign currency transactions and generate a financial report for several accounting books using different base currencies assigned to the same subsidiary. When utilizing the Foreign Currency Management feature, the base currency for each subsidiary in a book must be set up before activating a secondary accounting book.
Note that the Multiple Currencies feature is required to use Foreign Currency Management. With the use of this feature, exchange rates are automatically calculated, which may realize or unrealize foreign currency gains or losses.
Revenue and Expense Management
Various countries and industries often require different rules when handling revenue recognition and expense amortization. The criteria under which revenue and expenses should be recognized and how they should be accounted for are specified by generally accepted accounting principles (GAAP). However, every function pertaining to the recognition of revenue and the amortization of expenses becomes book-specific when Revenue and Expense Management is activated.
Extended Accounting Period Close Process
If Full Multi-Book Accounting has been set up, users can close and reopen accounting periods for each accounting book separately without affecting the other accounting books. When the Extended Accounting Period Close Process feature is enabled, each accounting book, even newly activated secondary accounting books, will have its own period close checklist. The Extended Accounting Period Close Process respects the closing and locking status of each period in each accounting book, even if a user changes an existing transaction.
Roles and Data Access for Multi-Book Accounting
Full Multi-Book Accounting adds a new layer of role-based data control to the NetSuite data access rules that are already in place. Only users with Administrator access or the CFO role can add accounting books when Full Multi-Book Accounting is enabled.
All NetSuite users have access to the primary book based on the permissions they already have. Access to secondary books of accounts must be set up in a certain way.
To grant secondary book permission, go to Setup > Users/Roles > User Management > Manage Roles > New.
Click on "Customize” for the role that needs to add secondary book access.
General Rules for Accounting Books and Subsidiaries
Subsidiaries and accounting records have a complicated relationship. The general guidelines for accounting books and subsidiaries are as follows:
- Each subsidiary has a primary book that is open and contains the subsidiary's base currency. It is impossible to make the primary book inactive.
- All child subsidiaries of this parent node are likewise selected when users choose a parent-subsidiary for an accounting book. As a visible reminder of this restriction, the box marked "Include Children" is always checked and disabled.
- If the Foreign Currency Management function is enabled for Multi-Book Accounting, users must establish the accounting book's base currency for each related subsidiary.
- A subsidiary cannot be deleted from an active accounting book.
- Subsidiaries must be dormant before they can be added to active accounting books. When users enable Full Multi-Book Accounting functionality, all new subsidiaries are saved with the “Subsidiary is Inactive” box ticked. Subsidiaries that have transactions cannot be added even when inactive.
Conclusion
NetSuite multi-book accounting is ideal for businesses that utilize different currencies, have multiple reporting standards, or need visibility into each of their subsidiaries. This feature also helps decrease the need for error-prone manual changes in the accounting and reporting processes by eliminating manual data entry. With the ability to map the relationships between subsidiary books and primary books, NetSuite Multi-Book enables accurate financial reporting and analysis across the entire business.
