NetSuite has the world’s best accounting system as well as the ERP system. NetSuite accounting has the efficiency to cover your all business accounting requirements. NetSuite accounting consists of Financial Accounting, Financial Reporting & Analytics, order & billing management, Budgeting, Inventory management, & Transaction management, etc. Netsuite Accounting app keeps the full track record of money that comes in, goes out, and is retained within the system. NetSuite accounting module takes your business beyond the traditional accounting software. NetSuite accounting solution is being used by thousands of organizations to ease their accounting process & save time with the least risk.

NetSuite Accounting Explained

Below we have explained the basic workflow of Netsuite accounting with screenshot and explaining the process;

Accounts:
Netsuite Accounting has various account types created inbuilt using which we can define the accounts. There are few checkboxes which defines some standard features for accounting.

• Inventory: If this will be another Current Asset account and we want the balance of this account included in the total balance of the Inventory KPI, select the Inventory box.
• Revalue Open Balance for foreign Currency revaluation: Check this box to select this account for open balance currency revaluation.
• Eliminate Intercompany Transactions: Check this box to make this account an intercompany account. Intercompany accounts are used to record transactions between subsidiaries. We can post both intercompany transactions and non-intercompany transactions to most intercompany accounts. Intercompany Accounts Receivable and Intercompany Accounts Payable, however, can be used only for recording amounts that are candidates for eliminations.

Fig 1: New account

To make an account the Group or the summary account we need to check the Summary check box. Furthermore, we can restrict the account using class, location and define the Cash flow rate type and General rate type.

Entering a new Currency 

We can enter the name of the new currency for a specific locale which are present in Netsuite as the lists of country and an ISO code can be set as a short form for the currency. We can also Override the currency format by checking the Override Currency format checkbox, this will help us to define whether the currency symbol will be used before the Amount or after the amount.

Fig 2: Entering a new currency

Setting up a Currency Exchange rate 

We can set up the exchange rate using this page for a currency using the base currency of the system. Besides the exchange rate, we also need to set the date from where the exchange rates are going to get applied. The Currency exchange rate once set cannot be edited/changed. In such a case we need to enter a new Currency exchange rate as of the same date.

Fig 3 : Exchange Rates

Accounting related Masters

Setting up Accounting Lists 

To setup/create new accounting lists, navigate to Setup >> Accounting >> Accounting Lists >> New.

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List	Description
Billing Class	Billing class values are used on employee records to set billable time rates for service items.
Budget Category	This list is available if the Multiple Budgets feature is enabled. Budget category values are used on budget records to categorize types of budgets. In NetSuite Oneworld, budget category values are used indicate whether budgeting is done at the local subsidiary level in local currency or globally using the root subsidiary’s currency. Each budget category is associated with a budget category type of Local or Global.
Charge Type	List for the type of service of the subscription plan items that use a specific charge plan.
Cost Category	This list is available if the Landed Cost or Standard Costing feature is enabled. Cost categories have two purposes: ● Material or Service Cost categories track standard costs for items. ● Landed Cost Category values are used for items on bills and item receipts to categorize the different kinds of expenses incurred when making purchases.
Customer Category	Customer categories are used on customer records to categorize them. A common use is to define the source of each customer.
Customer Message	Customer message values can be selected on transaction records to include standardized messages to customers. For example, a message of “Thank you for your order!” can be selected on an invoice record to be displayed on the invoice sent to the customer.
Distribution Category	This list is available if the Distribution Resource Planning feature is enabled. Distribution categories are used to set up a distribution network for supply planning.
Incoterm	This list is available if the Purchase Contracts feature or Blanket Purchase Orders feature is enabled. This is a standardized three-letter trade term used on transactions related to international commercial procurement practices that communicate the tasks, costs, and risks associated with the transportation and delivery of goods. Incoterms define where the customer takes ownership of the product and are typically used for international orders, such as when an item goes through customs or crosses a border.
Other Name Category	Other name category values are used on Other Name records to categorize them. The list of other name records is a collection of records for people or companies who are not vendors, customers or employees. You can use Other Name records to track other people or companies to whom you write checks or from whom you receive deposits, for example, your company might donate money to a favorite charity, so you can create another name record for the charity. You might also list your owners and partners here if they contribute or withdraw equity.

 

Payment Method	Payment method values are used on transactions such as cash sales and customer payments, to specify how payment was received. Possible payment methods include cash, check, credit card, money order, or PayPal™.
Price Level	This list is available when the Multiple Prices features is enabled. Price level values are used on item records to enable you to set up multiple prices for each item. When you create price level values, they automatically appear on item records with space for you to assign a price to each level. If the Quantity Pricing feature is enabled, you can assign quantity-based prices for each level.
Pricing Group	This list is available when the Multiple Prices feature is enabled. Pricing group values are used on customer and item records to enable the creation of customer-specific pricing for items.
Project Status	This list is available when the Projects feature is enabled. Project status values are used on project records to indicate the progress of projects.
Project Type	This list is available when the Projects feature is enabled. Project type values are used on project records to categorize them in whatever manner is needed. You can create a hierarchy of project types by identifying a subtype for each type value.
Revenue Allocation Group	This list is available when the Advanced Revenue Management feature is enabled. The revenue allocation group value is used in the Group Sum function in fair value formulas.
Term	Term values are used on invoice and customer records to specify when payment is due. You can select terms on a customer record to default on all invoices for that customer. You also can select terms on an invoice to apply to that transaction only.
Transaction Deletion Reason	This list is available when the Use Deletion Reason feature is enabled. You can create unique reasons why a transaction was deleted and choose the languages in which the reason should display. You can also inactivate specific deletion reasons if they no longer suit your needs.
Vendor Category	Vendor categories are used on vendor records to categorize them.
1099-MISC Category	This list’s values are used for 1099 forms that you issue to vendors. You cannot add values to this list.

Accounting related Transactions[/su_table]

There are various transactions which are done by the Accounting/Finance team which includes the following:

Write Checks

These transactions can be used to:

• Reimburse employees for expenses if you do not use Direct Deposit or Accounts Payable.
• Pay vendors if you do not use Accounts Payable.
• Record cash transactions.
• Enter other non-check debits such as debit card transactions.
• Enter all the mandatory and wanted fields we use to enter a check. While writing a check we have two options to print the check:
• If you checked To Be Printed, this box auto fills with To Print. We choose starting numbers when you print those checks.
• If we are immediately printing this check when you save the transaction, NetSuite accounting increases the largest check number by one.

The Balance amount getting displayed when we write a check is the Balance amount for the bank selected.

Fig 4: Write Checks

Make Deposits

Make a deposit in the NetSuite accounting app to record the funds you deposit into your bank account. For a deposit, you can select payments received for existing transactions, add funds not related to transaction payments, and record any cash received back from the bank.

Make deposits are basically used in the Netsuite accounting app for selecting a payment received for existing transactions, adding funds not related to transaction payments, and record any cash received back from the bank.

Following are some required fields to be entered: 

• Account: Select a Bank Account where we need to Deposit the Amount we received.
• Date: Accept today’s date or enter the date of the deposit.
• Posting Period: Select a posting period, if you use the Accounting Periods feature.
• Memo: Optionally, enter a memo.
• Check the To Be Printed box if you want to enter multiple deposits before printing the deposit slips for your records
• In the Classification section, select a department, class, and location for this deposit, if needed.
• P&L Unit: Please Select the Profit and Loss unit. Select Trading if it is not for Manufacturing.

On the Deposit subtab, enter the items for the deposit.

• The Payments subtab lists all payments posted to the Undeposited Funds account. Check the box next to each item to include in this deposit.
• You can filter the items by date, date range, or payment processing profile.
• The Amount column shows the payment amount in the currency of the bank account, which was entered when received for a cash sale, invoice, or other transaction. If you must change the amount, click the link in the Date column to go to the source transaction.
• If the field is empty, you must manually enter the amount. NetSuite accounting app does not populate the field if the payment currency is different from the bank account’s currency, and the bank and subsidiary currencies are also different.
• If the payment currency is different from the bank’s currency, and the bank and subsidiary currencies are the same, NetSuite uses the stored exchange rate to calculate the amount.

• On the Other Deposits subtab, enter items not received as payments recorded to the Undeposited Funds account.
• Enter the name, amount (positive number), account, payment method, and payment number for each item. Optionally enter a classification and memo. Click Add.
  • On the Cash Back subtab, enter the amount of cashback you received from this deposit. Enter the amount of cash you received, account, classification, and memo. Click Add.

Fig 8: Make Deposits

Transfer Funds

Transfer funds, as the name suggests, is used to transfer funds between two bank accounts. If either of the bank accounts has other currencies, then Netsuite accounting app will automatically convert it as per the conversion rate compared to the base currency.

NetSuite accounting enables you to perform two types of bank transfers. You can transfer funds between two bank accounts if they share the same currency, and you can transfer funds between a base currency bank account to any foreign currency bank account.

• Two bank accounts with shared currency – You can transfer funds between two bank accounts if they share the same currency. In this transfer, the exchange rate is always one. The G/L impact of this transfer, however, is denominated by the subsidiary’s base currency. NetSuite performs the base currency translation using the transfer amount, based on the default system rate.
• Base currency bank account to foreign currency bank account – You can transfer funds between a base currency bank account to any foreign currency bank account. In this transfer, the exchange rate is the rate between the subsidiary’s base currency and that of the selected foreign currency. When you select the From and to bank accounts, the NetSuite accounting module displays the default system exchange rate between the two currencies.
• When you enter a value in the From Amount field, NetSuite accounting translates the value and displays it in the To Amount field. NetSuite accounting module does not round the amount.
• NetSuite accounting app has a function of automatically update the exchange rate if:
  • The translated From Amount field value multiplied by the exchange rate does not equal the to Amount field value after rounding.
  • You change the translated value in the From Amount field.

Fig 9 : Transfer funds

Credit Card Transaction 

To manage charges and payments for your company credit card, you should first enter each individual transaction. Transactions are posted immediately. But before we enter the Credit Card Transaction, we can select either of the below-mentioned option:

• Charge to record a purchase
• Credit to record a credit to your account

Reconcile Bank Statement

Reconcile your bank statement against your bank account register to keep your NetSuite account accurate. You can also enter new transactions while reconciling. If you begin but want to finish your reconciliation later, the NetSuite accounting app preserves the reconciliation until you resume later.

Fig 10 : Reconcile Bank Statement

Deposits and Credits

• Click the Deposits and Credits subtab.
• This subtab shows deposits and credits to be reconciled.
• A Yes shows in the Cleared column for all transactions that have been marked as cleared through the bank on the account register.
• If you use NetSuite OneWorld, note that only transactions for the subsidiary associated with the bank account are listed.
• Check the boxes next to the transactions you want to reconcile.
• As you check transactions, the Reconciled This Statement field is updated, and the total of those transactions shows on the Deposits and Credits subtab.
  • To reconcile all deposits and credits, click Mark All.
  • If you mark bank transactions as Cleared on an ongoing basis, when you open a reconciliation you can click Mark All Cleared to Reconcile, which updates all transactions already cleared to be marked for reconciliation. Then, each transaction does not need to be marked individually.

Checks and Payments

• Click the Checks and Payments subtab.
• This subtab shows checks and payments that need to be reconciled. Credit card refund transactions also show on this subtab.
• A Yes shows in the Cleared column for all transactions that have been marked as cleared through the bank on the account register. Transactions must be both cleared and reconciled to close out a period.
• If you use NetSuite OneWorld, note that only transactions for the subsidiary associated with the bank account are listed.
• Check the boxes next to the transactions you want to reconcile.
• As you check transactions, the Reconciled This Statement field is updated, and the total of those transactions shows on the subtab.
  • To reconcile all checks and payments, click Mark All.
  • If you mark bank transactions as Cleared on an ongoing basis, when you open a reconciliation you can click Mark All Cleared to Reconcile, which updates all transactions that are already cleared to be marked for reconciliation. Then, each transaction does not need to be marked individually

New Charges

• • Click the New Charges subtab.
• Fill in the appropriate information for a reconciled charge, and then click Add.
• You can enter a charge with a date after the statement date for the reconciliation, and the charge remains reconciled with this statement.
• If you use NetSuite OneWorld, note the following:
  • Payee (vendor or other entity) must be associated with the same subsidiary as the bank account.
  • Accounts are restricted to non-bank accounts associated with the same subsidiary and currency as the selected bank account.
  • Only classes, departments, and locations associated with the same subsidiary as the bank account are available.
• Repeat this process for each reconciled charge.
• An example of another charge is your bank service charge.
• As you add transactions, the Reconciled This Statement field is updated, and the total of all the other charges is shown on the subtab.

New Deposits

• Click the New Deposits subtab.
• Fill in the appropriate information for the deposit, and then click Add.
• You can enter a deposit with a date after the statement date for the reconciliation, and the deposit remains reconciled with this statement.
• An example of another income is the interest your bank pays you.
• If you use NetSuite OneWorld, note the following:
  • Payor (vendor, customer, or other entity) must be associated with the same subsidiary as the bank account.
  • Accounts are restricted to non-bank accounts associated with the same subsidiary and currency as the selected bank account.
  • Only classes, departments, and locations associated with the same subsidiary as the bank account are available.
• As you add transactions, the Reconciled This Statement field is updated, and the total of all the other charges is shown on the subtab.
• Repeat this process for each reconciled deposit.

When finished, choose one of three options:

• Click Save to reconcile your bank statement.
• Click Save & Print to save and print your reconciliation.
• Click Complete Later to save your reconciliation until you return to submit or print it.

To view your previous reconciliations, go to Transactions >> Bank >> Reconcile Bank Statement. Click History.

Reconcile Credit card Statement

To reconcile credit card statement, Navigate to Transactions >> Bank >> Reconcile Credit Card Statement. As with your bank statements, you should reconcile your credit card statement against your credit card register to keep your NetSuite accounting accurate. The reconciliation process includes verifying transactions on your credit card account and your ledger account:

• Payments and credits (such as for returned merchandise)
• Charge and cash advances
• Fees and chargebacks

Write Tax Liability: 

• To write a tax liability Navigate to Transactions >> Bank >> Write tax liability. To pay a tax liability:
• Enter the appropriate tax codes whenever you create sales and purchase transaction records.
• Close the tax period before you do your tax reporting and tax payments. (Go to Setup > Accounting > Taxes > Manage Tax Periods (Administrator).)
• Run and review the VAT on Sales and VAT on Purchases summary and detailed reports. If necessary, for adjustments, reopen the tax period and run the reports again.
• If VAT on Sales is greater than VAT on purchases, prepare and post an appropriate journal entry that: 
  • Debits the VAT on Sales account for the amount shown on the VAT on Sales report.
  • Credits the VAT on Purchases account for the amount shown on the VAT on Purchases report
  • Credits the VAT Liability account for the net amount

When it is time to pay your tax liability, you can write a check to the tax agency.

Fig 11: Write tax liability

You can print this check at Transactions >> Management >> Print Checks and Forms

Enter Journal entry

To Enter a Journal Entry Navigate to Transactions >> Financials >> Enter Journal Entry. 

Use journal entries to adjust the balances in your general ledger accounts without entering a posting transaction. Journal entry transactions are not posted until they are approved. A journal entry is posted in a period to which the journal entry approver has access. Until a journal entry is approved, NetSuite tentatively displays the posting period based on the transaction date, or, if this period is locked/closed, the first open period. 

Mention the Currency in which we wish to enter the Journal Entry. In case we need to enter a historic journal entry we can edit the Exchange rate as well. In addition, we can mention a customer, vendor, employee or other name under Name – Select an entity to associate with this journal entry.

Fig. 16 : Journal Entries

Enter Intercompany Journal entry / Advanced Intercompany Journal entry  

To Enter a Journal Entry, Navigate to Transactions >> Financials >> Make Intercompany Journal entries / Make Advanced Intercompany Journal entries.

Using an advanced intercompany journal entry, you can specify the originating subsidiary and multiple receiving subsidiaries for the journal entry. You can also change the transaction currency to any currency set up in your system. Other behavior of advanced intercompany journal entries is similar to regular intercompany journal entries.

To create advanced intercompany journal entries, your role must include at least edit-level access for the Make Journal Entry permission. Advanced intercompany journal entries respect subsidiary and account restrictions. If you use the Automated Intercompany Management feature, advanced intercompany journal entries include an Auto Balance button. This button automatically adds elimination lines to balance the transaction.

Fig. 17 : Intercompany Journal Entry

Intercompany journal entries are a specialized type of journal available specifically for OneWorld. An intercompany journal entry records debits and credits to be posted to ledger accounts for transactions between two subsidiaries. Intercompany journal entries adjust the value of any set of accounts without entering transactions such as invoices or bills.

An advanced version of intercompany journal entries is now available, which enables you to define multiple receiving subsidiaries, change the base currency to any currency set up in your system, and use the Auto Balance functionality. 

VAT/GST for Intercompany Journal Entries

When you create an intercompany journal entry, include VAT/GST information in the VAT and VAT Amt fields on the Lines subtab. These fields are available for subsidiaries with a tax nexus set up and a reporting requirement for VAT or GST.

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