Section G.1

GL Design & Segmentation

Strategic framework for designing a Chart of Accounts and segmentation structure that supports financial reporting, operational analysis, and future growth.

Understanding NetSuite's GL Architecture

NetSuite's GL architecture combines a traditional Chart of Accounts with dimensional segmentation. Unlike legacy systems that embed all classifications in the account number itself, NetSuite separates the "what" (account) from the "who/where/why" (segments).

The Account + Segment Model

Traditional GL (Embedded): 4100-01-NYC-MFG │ │ │ └── Department │ │ └────── Location │ └────────── Division └─────────────── Account NetSuite GL (Dimensional): ┌─────────────────────────────────────────────────────────────────┐ │ Account: 4100 - Product Revenue │ │ + Subsidiary: US Operations │ │ + Department: Sales │ │ + Class: Hardware │ │ + Location: New York │ │ + Custom Segment: Region = Northeast │ └─────────────────────────────────────────────────────────────────┘ Result: Single account, infinitely sliceable by any dimension No account explosion, simpler maintenance

Benefits of Dimensional Segmentation

Benefit Description Example
Reduced Account Count Fewer accounts to maintain 1 revenue account vs 50 per product line
Flexible Reporting Slice data any way needed P&L by department, by class, or both
Future-Proof Add new dimensions without COA changes New location = new segment value, not new accounts
Consistent Entry Users select segments on transactions Dropdown selection vs memorizing account numbers

NetSuite's Standard Segments

NetSuite provides four standard classification segments, each with specific characteristics and use cases.

Subsidiary (OneWorld)

Characteristic Description
Purpose Legal entity identification
Hierarchy Parent-child for consolidation
Currency Base currency per subsidiary
Required Always required on transactions
Typical Use Legal entities, business units for statutory reporting

Department

Characteristic Description
Purpose Organizational unit classification
Hierarchy Supports parent-child nesting
Restrictions Can be restricted to subsidiaries
Required Configurable per transaction type
Typical Use Cost centers, organizational units, functional areas

Class

Characteristic Description
Purpose Business categorization
Hierarchy Supports parent-child nesting
Flexibility Most flexible segment
Required Configurable per transaction type
Typical Use Product lines, business lines, service types, projects

Location

Characteristic Description
Purpose Physical or logical location
Hierarchy Supports parent-child nesting
Inventory Link Tied to inventory tracking
Required Required for inventory transactions
Typical Use Warehouses, stores, offices, regions
Segment Restriction to Subsidiary

In OneWorld, Department, Class, and Location can be restricted to specific subsidiaries. This controls which segment values appear based on the selected subsidiary, preventing invalid combinations like a "Paris Office" location appearing for a US subsidiary.

Custom Segments

When four standard segments aren't enough, NetSuite supports custom segments for additional classification dimensions.

Custom Segment Types

Type Values Source Use Case
Custom List Static list of values Region, Channel, Brand
Custom Record Custom record instances Projects, Grants, Contracts
Standard Record Existing NetSuite records Customer, Employee, Item

Creating Custom Segments

Path: Customization → Lists, Records, & Fields → Custom Segments → New Key Configuration: ┌─────────────────────────────────────────────────────────────────┐ │ Label: Region │ │ ID: _region (system prefixes with cseg) │ │ Record Type: Custom List │ │ Description: Geographic region for sales analysis │ │ │ │ Filtering: │ │ ☑ Filter By: Subsidiary │ │ ☑ Filter By: Location │ │ │ │ Apply To: │ │ ☑ GL Impact Transactions │ │ ☑ Non-GL Transactions (quotes, opportunities) │ │ │ │ Reporting: │ │ ☑ Show in Financial Statements │ │ ☑ Include in Saved Searches │ └─────────────────────────────────────────────────────────────────┘
Custom Segment Limits

NetSuite limits the number of custom segments. Check your account's limit (typically 5-15 depending on edition). Plan segment usage carefully — once created and used, custom segments cannot be deleted.

Segmentation Design Principles

1. Start with Reporting Requirements

Design segments based on how management needs to view financial data:

  • What dimensions do executives need for decision-making?
  • What statutory/regulatory reports are required?
  • What operational metrics need tracking?
  • What budget structures exist?

2. Assign Purpose to Each Segment

Recommended Segment Assignment: Subsidiary → Legal Entity "Who is the legal party to this transaction?" Example: US Inc., UK Ltd., Canada Corp. Department → Cost Center / Organizational Unit "Who is responsible for this cost/revenue?" Example: Sales, Marketing, Engineering, Finance Class → Product Line / Service Line "What product or service is this related to?" Example: Hardware, Software, Services, Support Location → Physical/Operational Location "Where did this transaction occur?" Example: NYC Warehouse, London Office, Online Custom Segment → Any Other Dimension "What else do we need to track?" Example: Region, Channel, Project, Grant

3. Avoid Segment Overlap

Problem Example Solution
Redundant Data Location AND Region as separate segments when Region can be derived from Location Use Location hierarchy; create Region as parent
Conflicting Purpose Using Class for both Product Line AND Project Pick one; create custom segment for the other
Over-Segmentation Creating segment for every possible analysis Use custom fields for non-GL classification

4. Design for Hierarchy

Department Hierarchy Example: Department ├── Operations │ ├── Manufacturing │ │ ├── Assembly │ │ └── Quality Control │ └── Warehouse │ ├── Receiving │ └── Shipping ├── Sales │ ├── Direct Sales │ │ ├── Enterprise │ │ └── SMB │ └── Channel Sales └── G&A ├── Finance ├── HR └── IT Benefit: Report at any level (Operations total, or drill to Assembly)

5. Plan for Growth

  • New subsidiaries: Will they share COA? Different currencies?
  • New products: How will they fit into Class structure?
  • Acquisitions: Can their structure map to yours?
  • International expansion: Location/subsidiary implications?

Segment Application on Transactions

Header vs Line Level

Level When Used Example
Header Only All lines share same segment Single-department purchase order
Line Level Lines can have different segments Sales order with items for different classes
Header Default to Line Header sets default, lines can override Most flexible approach

Making Segments Required

Path: Setup → Accounting → Accounting Preferences Configuration Options: ┌─────────────────────────────────────────────────────────────────┐ │ Department: │ │ ☑ Mandatory on all transactions │ │ ○ Mandatory on specific transactions only │ │ ○ Optional │ │ │ │ Class: │ │ ○ Mandatory on all transactions │ │ ☑ Mandatory on specific transactions only │ │ → Check: Invoice, Bill, Journal Entry │ │ ○ Optional │ │ │ │ Location: │ │ Follows inventory settings (mandatory for inventory items) │ └─────────────────────────────────────────────────────────────────┘ Tip: Start optional during implementation, make mandatory at go-live after users are trained.

Default Segment Values

NetSuite can default segment values from multiple sources:

Source Priority Example
Item Record Highest for item lines Item "Widget" defaults Class = Hardware
Entity Record High Customer defaults Department = Channel Sales
Employee/User Medium User's default department
Transaction Form Lower Form template defaults
Preference Lowest Company-wide defaults

Common Segmentation Patterns by Industry

Manufacturing

Subsidiary: Legal entities Department: Production, Quality, Engineering, Sales, G&A Class: Product family (Widgets, Gadgets, Components) Location: Plants, Distribution centers Custom: Production Line, Shift

Software/SaaS

Subsidiary: Legal entities Department: R&D, Sales, Customer Success, G&A Class: Product (Platform, Add-ons, Services) Location: Office locations (often minimal) Custom: ARR Segment, Customer Tier

Professional Services

Subsidiary: Legal entities, Practice groups Department: Service line (Consulting, Audit, Tax) Class: Industry vertical (Healthcare, Tech, Financial) Location: Office locations Custom: Project, Engagement Partner

Nonprofit

Subsidiary: Legal entities, Chapters Department: Programs, Fundraising, G&A Class: Program/Fund (restricted vs unrestricted) Location: Service locations Custom: Grant, Campaign, Donor restriction

Retail

Subsidiary: Legal entities, Brands Department: Store Ops, E-commerce, Corporate Class: Merchandise category (Apparel, Home, Electronics) Location: Stores, Warehouses, Online Custom: Channel (Retail, Online, Wholesale)

Segmentation Design Checklist

☐
Document all required financial reports and their dimensions
☐
Map existing legacy segments to NetSuite segments
☐
Assign single purpose to each segment (no overlap)
☐
Design hierarchies for drill-down reporting
☐
Identify which segments are mandatory vs optional
☐
Define segment defaulting logic (item, entity, user)
☐
Plan subsidiary restrictions for segments
☐
Evaluate need for custom segments (vs custom fields)
☐
Validate design against future growth scenarios
☐
Document naming conventions for segment values
Section G.2

Chart of Accounts

Account types, numbering conventions, hierarchies, and best practices for COA design in NetSuite.

NetSuite Account Types

NetSuite provides predefined account types that control behavior on financial statements and transactions.

Balance Sheet Accounts

Type Normal Balance Financial Statement Examples
Bank Debit Assets (Current) Operating Checking, Payroll Account
Accounts Receivable Debit Assets (Current) Trade AR (system-controlled)
Other Current Asset Debit Assets (Current) Prepaid Expenses, Deposits
Fixed Asset Debit Assets (Non-Current) Equipment, Vehicles, Buildings
Other Asset Debit Assets (Non-Current) Intangibles, Long-term Investments
Accumulated Depreciation Credit Assets (Contra) Accum Depr - Equipment
Accounts Payable Credit Liabilities (Current) Trade AP (system-controlled)
Credit Card Credit Liabilities (Current) Corporate Amex, Visa
Other Current Liability Credit Liabilities (Current) Accrued Expenses, Sales Tax Payable
Long Term Liability Credit Liabilities (Non-Current) Notes Payable, Deferred Revenue (LT)
Equity Credit Equity Common Stock, Retained Earnings

Income Statement Accounts

Type Normal Balance Financial Statement Examples
Income Credit Revenue Product Revenue, Service Revenue
Other Income Credit Other Income Interest Income, Gain on Sale
Cost of Goods Sold Debit COGS Product COGS, Freight-In
Expense Debit Operating Expenses Salaries, Rent, Utilities
Other Expense Debit Other Expenses Interest Expense, Loss on Disposal

Special Account Types

Type Purpose Notes
Unbilled Receivable Revenue recognition before billing Used with Advanced Revenue Management
Deferred Revenue Billing before revenue recognition Used with ARM or standard deferred rev
Deferred Expense Prepaid costs for amortization Used with amortization schedules
Non-Posting Statistical/memo accounts No GL impact, used for reporting
Statistical Quantity tracking (non-monetary) FTEs, square footage, units

Account Numbering Conventions

While NetSuite doesn't require account numbers, most organizations use them for sorting, grouping, and legacy system alignment.

Standard Numbering Scheme

Typical Account Number Ranges: 1000-1999 Assets 1000-1099 Cash & Bank 1100-1199 Accounts Receivable 1200-1299 Other Current Assets 1300-1399 Inventory 1400-1499 Prepaid Expenses 1500-1599 Fixed Assets 1600-1699 Accumulated Depreciation 1700-1999 Other Assets 2000-2999 Liabilities 2000-2099 Accounts Payable 2100-2199 Accrued Liabilities 2200-2299 Other Current Liabilities 2300-2399 Deferred Revenue 2400-2999 Long-Term Liabilities 3000-3999 Equity 3000-3099 Capital Stock 3100-3199 Additional Paid-In Capital 3200-3299 Retained Earnings 3900-3999 Current Year Earnings (system) 4000-4999 Revenue 4000-4099 Product Revenue 4100-4199 Service Revenue 4200-4299 Subscription Revenue 4900-4999 Other Income 5000-5999 Cost of Goods Sold 5000-5099 Product COGS 5100-5199 Service COGS 5200-5299 Subscription COGS 6000-6999 Operating Expenses 6000-6099 Salaries & Wages 6100-6199 Employee Benefits 6200-6299 Rent & Occupancy 6300-6399 Professional Services 6400-6499 Marketing 6500-6599 Travel & Entertainment 6600-6699 Technology 6700-6799 Depreciation & Amortization 6800-6999 Other Operating 7000-7999 Other Income/Expense 7000-7099 Interest Income 7100-7199 Interest Expense 7200-7299 Gains/Losses 8000-8999 (Reserved or Taxes) 9000-9999 Statistical/Non-Posting

Account Number Best Practices

  • Leave gaps: Don't use consecutive numbers — leave room for future accounts (1000, 1010, 1020 not 1000, 1001, 1002)
  • Consistent length: Use same number of digits throughout (4 or 5 digits typically)
  • Meaningful grouping: First digit = account category, subsequent = subcategory
  • No segment embedding: Don't embed department/class in account number — use segments instead
  • Document ranges: Create a numbering policy document for future account creation

Account Hierarchies (Parent/Child)

NetSuite supports account hierarchies for roll-up reporting. Parent accounts are "header" accounts that sum their children.

Hierarchy Example

Account Hierarchy: 1000 - Cash and Cash Equivalents (Header - no posting) ├── 1010 - Operating Checking (Posting) ├── 1020 - Payroll Checking (Posting) ├── 1030 - Money Market (Posting) └── 1040 - Petty Cash (Posting) 6000 - Salaries and Wages (Header - no posting) ├── 6010 - Salaries - Exempt (Posting) ├── 6020 - Wages - Non-Exempt (Posting) ├── 6030 - Bonuses (Posting) ├── 6040 - Commissions (Posting) └── 6050 - Overtime (Posting) Reporting Impact: Balance Sheet shows "1000 - Cash and Cash Equivalents: $500,000" Drill-down shows individual account balances
Header Account Behavior

In NetSuite, parent accounts can be configured as "Summary" (no direct posting) or allow posting. Best practice: Make parent accounts summary-only to force transactions to post to specific child accounts. This ensures consistent detail in reporting.

Subsidiary Account Restrictions (OneWorld)

In OneWorld, accounts are shared across all subsidiaries by default. You can restrict accounts to specific subsidiaries.

Restriction Scenarios

Scenario Configuration Example
Shared Account Available to all subsidiaries 4000 - Product Revenue (all subs)
Restricted Account Limited to specific subsidiary(ies) 6250 - UK VAT Expense (UK only)
Elimination Account Used only for consolidation 3800 - Elimination (Parent only)
Path: Lists → Accounting → Accounts → Edit Subsidiary Restrictions: ┌─────────────────────────────────────────────────────────────────┐ │ Available To: │ │ ☑ Parent Company │ │ ☑ US Operations │ │ ☐ UK Operations (restricted - has local equivalent) │ │ ☑ Canada Operations │ │ │ │ Note: Unchecked subsidiaries cannot post to this account │ └─────────────────────────────────────────────────────────────────┘

Special Purpose Accounts

System-Controlled Accounts

Some accounts are managed by NetSuite and require special setup:

Account Purpose Configuration
Accounts Receivable Customer balances from invoices One AR account required; can have multiple for different transaction types
Accounts Payable Vendor balances from bills One AP account required; can have multiple
Retained Earnings Year-end close accumulation Must exist in COA; system posts at year-end close
Undeposited Funds Payments received, not yet deposited Used when grouping payments into deposits
Currency Rounding FX rounding differences Auto-created for multi-currency

Inventory Accounts

Items with inventory tracking require linked GL accounts:

Item → Accounting Tab Accounts: Asset Account: 1300 - Inventory Asset Debited: When inventory received (PO receipt, production completion) Credited: When inventory sold (invoice, consumption) COGS Account: 5000 - Cost of Goods Sold Debited: When inventory sold Credited: (offset to Asset above) Income Account: 4000 - Product Revenue Credited: When inventory sold (invoice) Debited: (offset to AR) Expense Account: (for non-inventory items) Debited: When purchased

COA Design Checklist

☐
Map legacy COA to NetSuite account types
☐
Define account numbering convention with documented ranges
☐
Design parent/child hierarchy for roll-up reporting
☐
Identify accounts requiring subsidiary restrictions
☐
Set up system-required accounts (AR, AP, Retained Earnings)
☐
Configure inventory accounts on item records
☐
Review account types match financial statement presentation
☐
Document any special/intercompany accounts
Section G.3

GL Impact by Transaction

Comprehensive reference for how each NetSuite transaction type affects the general ledger.

Sales Cycle Transactions

Invoice (Cash Sale posts similarly)

Invoice - Standard Sale
Dr: Accounts Receivable $1,180.00
Cr: Revenue $1,000.00
Cr: Sales Tax Payable $80.00
Cr: Shipping Income $100.00
Invoice - With Inventory Item
Dr: Accounts Receivable $1,000.00
Cr: Revenue $1,000.00
Dr: Cost of Goods Sold $600.00
Cr: Inventory Asset $600.00

Customer Payment

Payment - Applied to Invoice
Dr: Undeposited Funds (or Bank) $1,180.00
Cr: Accounts Receivable $1,180.00

Deposit

Deposit - Multiple Payments
Dr: Bank Account $5,000.00
Cr: Undeposited Funds $5,000.00

Credit Memo

Credit Memo - Return
Dr: Revenue (or Sales Returns) $500.00
Cr: Accounts Receivable $500.00
Dr: Inventory Asset (if returned) $300.00
Cr: Cost of Goods Sold $300.00

Customer Refund

Refund - From Credit Balance
Dr: Accounts Receivable $500.00
Cr: Bank Account $500.00

Purchase Cycle Transactions

Vendor Bill

Bill - Expense Items
Dr: Expense Account $1,000.00
Cr: Accounts Payable $1,000.00
Bill - Inventory Items
Dr: Inventory Asset $5,000.00
Cr: Accounts Payable $5,000.00

Item Receipt (3-way match before Bill)

Item Receipt - Before Bill
Dr: Inventory Asset $5,000.00
Cr: AP Accrual (Unbilled Receipts) $5,000.00

Bill Payment

Bill Payment - Check
Dr: Accounts Payable $1,000.00
Cr: Bank Account $1,000.00

Vendor Credit

Vendor Credit
Dr: Accounts Payable $200.00
Cr: Expense Account (or Inventory) $200.00

Inventory Transactions

Inventory Adjustment (Increase)

Inventory Adjustment - Increase
Dr: Inventory Asset $500.00
Cr: Inventory Adjustment Account $500.00

Inventory Adjustment (Decrease)

Inventory Adjustment - Decrease
Dr: Inventory Adjustment Account $500.00
Cr: Inventory Asset $500.00

Transfer Order (Between Locations)

Transfer Order - Item Fulfillment
Dr: Inventory In Transit $1,000.00
Cr: Inventory Asset (Source Location) $1,000.00
Transfer Order - Item Receipt
Dr: Inventory Asset (Dest Location) $1,000.00
Cr: Inventory In Transit $1,000.00

Manufacturing Transactions

Assembly Build (Non-WIP)

Assembly Build
Dr: Finished Goods Inventory $1,200.00
Cr: Raw Materials Inventory $1,200.00

Work Order Issue (WIP)

Work Order Issue - Material Consumption
Dr: WIP - Components $800.00
Cr: Raw Materials Inventory $800.00

Work Order Completion (WIP)

Work Order Completion
Dr: Finished Goods Inventory $1,200.00
Cr: WIP - Assemblies $1,200.00

Work Order Close (WIP)

Work Order Close - With Variance
Dr: WIP - Assemblies (to clear) $1,200.00
Cr: WIP - Components (to clear) $800.00
Cr: WIP Variance $400.00

Banking Transactions

Check

Check - Direct Expense
Dr: Expense Account $500.00
Cr: Bank Account $500.00

Transfer

Bank Transfer
Dr: Bank Account (To) $10,000.00
Cr: Bank Account (From) $10,000.00

GL Impact Summary Table

Transaction Primary Debit Primary Credit
Invoice Accounts Receivable, COGS Revenue, Inventory
Customer Payment Bank / Undeposited Funds Accounts Receivable
Credit Memo Revenue (contra) Accounts Receivable
Vendor Bill Expense / Inventory Accounts Payable
Bill Payment Accounts Payable Bank
Vendor Credit Accounts Payable Expense / Inventory
Journal Entry Per entry lines Per entry lines
Inventory Adjustment (+) Inventory Asset Adjustment Account
Inventory Adjustment (-) Adjustment Account Inventory Asset
Assembly Build Finished Goods Components
Section G.4

Journal Entries

Types, use cases, and best practices for manual GL entries in NetSuite.

Journal Entry Types

Standard Journal Entry

Characteristic Description
Purpose General GL adjustments not handled by other transactions
Balance Rule Debits must equal credits
Typical Uses Accruals, reclassifications, corrections, opening balances
Path Transactions → Financial → Make Journal Entries

Intercompany Journal Entry (OneWorld)

Characteristic Description
Purpose Record transactions between subsidiaries
Balance Rule Each subsidiary must balance; IC accounts auto-generated
Typical Uses Management fees, cost allocations, IC loans
Requirements IC accounts configured; Auto IC Journal Entries enabled

Statistical Journal Entry

Characteristic Description
Purpose Record non-monetary quantities for reporting
Balance Rule Single-sided entries allowed (no balancing required)
Account Type Statistical accounts only
Typical Uses FTE counts, square footage, units produced

Recurring Journal Entry

Characteristic Description
Purpose Automate repetitive journal entries
Schedule Monthly, quarterly, annual; specific dates
Typical Uses Prepaid amortization, depreciation, accruals
Path Transactions → Financial → Create Memorized Transactions

Common Journal Entry Scenarios

Accrued Expense (Month End)

Accrue Unbilled Services - Dec 31
Dr: Professional Services Expense $5,000.00
Cr: Accrued Expenses $5,000.00
Reverse Accrual - Jan 1
Dr: Accrued Expenses $5,000.00
Cr: Professional Services Expense $5,000.00

Prepaid Expense Amortization

Monthly Insurance Amortization
Dr: Insurance Expense $1,000.00
Cr: Prepaid Insurance $1,000.00

Reclassification

Reclass Expense to Correct Department
Dr: Travel Expense (Marketing Dept) $500.00
Cr: Travel Expense (Sales Dept) $500.00

Opening Balances

Load Opening Balance Sheet
Dr: Cash $100,000.00
Dr: Accounts Receivable $50,000.00
Dr: Inventory $75,000.00
Cr: Accounts Payable $30,000.00
Cr: Retained Earnings $195,000.00

Journal Entry Best Practices

Documentation Standards

  • Memo field: Always describe the purpose (e.g., "Dec 2024 rent accrual")
  • Line memos: Detail each line if multiple purposes
  • Attachments: Attach supporting documentation
  • Name field: Link to customer/vendor if applicable

Approval Workflows

Journal Entry Approval Workflow: Criteria: - Amount > $10,000 OR - Contains specific accounts (intercompany, equity) Routing: Level 1: Controller (all JEs meeting criteria) Level 2: CFO (if amount > $100,000) Actions: - Approved: JE posts to GL - Rejected: Returns to creator with comments - Pending Approval: Does not post

Reversing Entries

  • Check "Reversing" box on accrual entries
  • System auto-creates reversal on first day of next period
  • Use for: Month-end accruals, prepaid allocations
  • Do NOT use for: Reclassifications, corrections
Journal Entry Limitations

Journal entries cannot post to AR or AP accounts directly — they must go through invoices/bills/payments. Use JEs for non-subledger GL accounts only. Exception: Opening balance JE can load AR/AP during initial implementation.

Section G.5

Multi-Book Accounting

Maintaining multiple sets of books for different accounting standards (GAAP, IFRS, statutory) in a single NetSuite account.

Multi-Book Overview

Multi-Book Accounting allows maintaining separate general ledgers with different accounting treatments while sharing a common transactional backbone.

Primary vs Secondary Books

Characteristic Primary Book Secondary Book(s)
Purpose Main operational book Alternative accounting standards
Currency Subsidiary base currency Can differ from primary
Transactions All transactions post Automatic or adjustment-only
Example US GAAP book (USD) IFRS book, Local statutory (EUR)

Common Multi-Book Scenarios

  • GAAP + IFRS: Different revenue recognition, lease accounting
  • GAAP + Tax: Book vs tax depreciation differences
  • GAAP + Local Statutory: Country-specific requirements
  • Management + Statutory: Internal vs external reporting

Configuring Multi-Book

Enabling Multi-Book

Path: Setup → Company → Enable Features → Accounting Check: Multi-Book Accounting Prerequisites: - Cannot be disabled after enabling - Existing data becomes primary book - Plan secondary books before enabling

Creating Secondary Books

Path: Setup → Accounting → Accounting Books → New Configuration: ┌─────────────────────────────────────────────────────────────────┐ │ Name: IFRS Book │ │ Currency: EUR │ │ Status: Active │ │ │ │ Book Settings: │ │ ☑ Automated (transactions post automatically) │ │ ○ Manual (adjustments only) │ │ │ │ Accounting Method: Accrual │ │ │ │ Subsidiaries: (select which subsidiaries use this book) │ │ ☑ Parent Company │ │ ☑ UK Operations │ │ ☑ Germany GmbH │ └─────────────────────────────────────────────────────────────────┘

Book-Specific Account Mapping

When accounting treatment differs between books, map different accounts:

Example: Revenue Recognition Difference Transaction: Software License Sale $100,000 2-year term, paid upfront Primary Book (GAAP - ASC 606): Dr: AR $100,000 Cr: Deferred Revenue $100,000 (then recognize $4,167/month over 24 months) Secondary Book (Cash Basis): Dr: Cash $100,000 Cr: Revenue $100,000 (recognize immediately when paid) Configuration: Item record → Accounting tab → Book-specific accounts Or use adjustment journal entries for secondary book

Book-Specific Adjustments

When automatic posting isn't sufficient, use book-specific journal entries.

Creating Book-Specific Journal Entry

Journal Entry with Multi-Book: Standard JE posts to: All books (unless overridden) Book-Specific Adjustment: ┌─────────────────────────────────────────────────────────────────┐ │ Journal Entry │ │ Accounting Book: IFRS Book (dropdown) │ │ │ │ Lines: │ │ Dr: Depreciation Expense - IFRS $5,000 │ │ Cr: Accumulated Depreciation $5,000 │ │ │ │ Note: This entry ONLY posts to IFRS book │ │ Primary book is unaffected │ └─────────────────────────────────────────────────────────────────┘

Common Book Differences

Topic GAAP Treatment IFRS Treatment
Revenue Recognition ASC 606 IFRS 15 (similar but differences exist)
Leases ASC 842 IFRS 16 (no operating lease for lessees)
Inventory LIFO allowed LIFO prohibited
Development Costs Generally expensed Capitalized if criteria met
Fixed Assets Cost model Cost or revaluation model

Reporting Across Books

Financial Reports by Book

Path: Reports → Financial → Balance Sheet Report Settings: Accounting Book: [Select primary or secondary] Subsidiary: [Select] As Of Date: [Date] Each book produces separate financial statements Drill-down shows book-specific transactions

Book Comparison Report

Use saved searches to compare balances across books:

Saved Search: Book Comparison Type: Transaction Criteria: - Account: [specific accounts] - Date: [period] Results: Account | Primary Book | IFRS Book | Difference --------|--------------|-----------|------------ Revenue | $500,000 | $480,000 | $20,000 Deferred| $50,000 | $70,000 | -$20,000
Section G.6

Currency & Revaluation

Multi-currency transactions, exchange rate management, and period-end revaluation processes.

Multi-Currency Fundamentals

Currency Types in NetSuite

Type Definition Example
Base Currency Subsidiary's primary currency USD for US subsidiary
Transaction Currency Currency used on transaction EUR invoice to French customer
Reporting Currency Additional currencies for reports GBP for UK stakeholder reporting

Exchange Rate Types

Rate Type Purpose When Used
Current Default transaction rate Daily transactions
Average Period average rate Income statement translation
Historical Rate at original transaction Equity translation
Consolidation Parent company restatement Consolidation reporting

Foreign Currency Transactions

Transaction Recording

Invoice in Foreign Currency (EUR 1,000 @ 1.10)
Dr: Accounts Receivable (EUR) €1,000 = $1,100
Cr: Revenue $1,100

Payment with Gain/Loss

Payment Received (EUR 1,000 @ 1.12 - rate changed)
Dr: Bank (EUR) €1,000 = $1,120
Cr: Accounts Receivable $1,100
Cr: Realized FX Gain $20

Realized vs Unrealized Gains/Losses

Type When Recognized Account
Realized Settlement (payment/receipt) Realized Gain/Loss
Unrealized Revaluation (open balances) Unrealized Gain/Loss

Currency Revaluation

Revaluation adjusts open foreign currency balances to current exchange rates at period end.

Running Revaluation

Path: Transactions → Financial → Revalue Open Foreign Currency Balances Steps: 1. Select subsidiary 2. Set "As Of" date (period end) 3. Choose accounts to revalue: - Bank accounts (foreign currency) - AR accounts - AP accounts - Other balance sheet accounts 4. Review preview 5. Post revaluation Result: Journal entry created for unrealized gain/loss

Revaluation Example

Revaluation - Open EUR Receivable
Original: €10,000 @ 1.10 = $11,000
Period End: €10,000 @ 1.15 = $11,500
Dr: Accounts Receivable (revalue) $500
Cr: Unrealized FX Gain $500
Revaluation Reversal

Revaluation entries are typically reversed at the start of the next period. When the actual settlement occurs, the system calculates realized gain/loss from the original transaction rate. Configure auto-reversal in revaluation settings.

Exchange Rate Management

Automatic Rate Updates

Path: Setup → Accounting → Currency Exchange Rate Integration Options: 1. Manual entry (Lists → Accounting → Currency Exchange Rates) 2. Scheduled auto-update (daily/weekly) 3. Third-party integration (XE, OANDA via SuiteApp) Rate Providers: - ECB (European Central Bank) - free, delayed - XE - real-time, subscription required - Custom feed via SuiteScript

Rate Override on Transactions

Users can override exchange rates on individual transactions when needed:

  • Click "Currency" button on transaction
  • Enter custom rate
  • Rate locks to transaction regardless of future rate changes
Section G.7

Consolidation

Consolidating multiple subsidiaries, elimination entries, and intercompany balancing in OneWorld.

OneWorld Consolidation

NetSuite OneWorld automatically consolidates subsidiary financials up the hierarchy. Key processes include currency translation and intercompany eliminations.

Subsidiary Hierarchy

Example Hierarchy: Global Holdings (Parent - USD) ├── US Operations (Child - USD) │ ├── US East (Grandchild - USD) │ └── US West (Grandchild - USD) ├── UK Operations (Child - GBP) └── Germany GmbH (Child - EUR) Consolidation Flow: Grandchildren → Children → Parent Foreign currencies translated at each level

Consolidation Settings

Path: Setup → Company → Subsidiaries → Edit Key Settings per Subsidiary: ┌─────────────────────────────────────────────────────────────────┐ │ Currency: EUR │ │ Parent: Global Holdings │ │ │ │ Elimination Subsidiary: (for IC eliminations) │ │ ○ None │ │ ● Global Holdings │ │ ○ Specific elimination sub │ │ │ │ Translation Method: │ │ Current rate for balance sheet │ │ Average rate for income statement │ │ Historical rate for equity │ └─────────────────────────────────────────────────────────────────┘

Intercompany Transactions

Automatic Intercompany Journal Entries

When enabled, NetSuite auto-creates offsetting entries for intercompany transactions.

Enable: Setup → Accounting → Preferences → Accounting Preferences Check: Automated Intercompany Journals Example: US sub sells $10,000 service to UK sub System Creates: ┌─────────────────────────────────────────────────────────────────┐ │ US Operations Journal: │ │ Dr: Intercompany Receivable - UK $10,000 │ │ Cr: Intercompany Revenue $10,000 │ ├─────────────────────────────────────────────────────────────────┤ │ UK Operations Journal (auto-created): │ │ Dr: Intercompany Expense £8,000 │ │ Cr: Intercompany Payable - US £8,000 │ └─────────────────────────────────────────────────────────────────┘

Intercompany Account Setup

Required Intercompany Accounts: Balance Sheet: - Intercompany Receivable (by subsidiary) - Intercompany Payable (by subsidiary) - Due To/Due From accounts Income Statement (optional for management fees): - Intercompany Revenue - Intercompany Expense - Management Fee Income/Expense Configure: Lists → Accounting → Accounts Check "Intercompany" box on account Assign to subsidiaries involved in IC transactions

Elimination Entries

Elimination entries remove intercompany balances during consolidation so the consolidated view shows only external transactions.

Auto-Elimination

NetSuite Auto-Eliminates: - Intercompany receivables/payables (when flagged) - Intercompany revenue/expense (when flagged) Process: 1. Mark accounts as "Eliminate Intercompany Transactions" 2. Run consolidation or view consolidated report 3. System auto-eliminates matching IC balances

Manual Elimination Journal

Elimination Entry - IC Revenue/Expense
Dr: Intercompany Revenue (US) $100,000
Cr: Intercompany Expense (UK) $100,000

Equity Eliminations (Investments)

Eliminate Investment in Subsidiary
Dr: Common Stock (Sub) $500,000
Dr: Retained Earnings (Sub) $200,000
Cr: Investment in Subsidiary (Parent) $700,000

Consolidated Reporting

Running Consolidated Reports

Path: Reports → Financial → Balance Sheet (or Income Statement) Settings: Subsidiary: [Parent Company - Consolidated] ☑ Include Children Output Shows: - Parent amounts - Children amounts (translated) - Eliminations (if enabled) - Consolidated total

Consolidation Checklist

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Configure subsidiary hierarchy with correct parent assignments
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Set up intercompany accounts for each subsidiary pair
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Enable Automated Intercompany Journal Entries
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Mark elimination accounts appropriately
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Configure exchange rates for all currencies
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Run period-end revaluation before consolidation
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Verify IC balances match between subsidiaries
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Post any manual elimination entries required
Section G.8

Period Close

Month-end, quarter-end, and year-end closing procedures, lock dates, and close checklist.

NetSuite Accounting Periods

Period Structure

Path: Setup → Accounting → Manage Accounting Periods Default Structure: ┌─────────────────────────────────────────────────────────────────┐ │ Fiscal Year 2025 │ ├─────────────────────────────────────────────────────────────────┤ │ Q1 2025 │ │ ├── Jan 2025 (Period 1) │ │ ├── Feb 2025 (Period 2) │ │ └── Mar 2025 (Period 3) │ │ Q2 2025 │ │ ├── Apr 2025 (Period 4) │ │ └── ... and so on │ └─────────────────────────────────────────────────────────────────┘ Custom Calendars: - 4-4-5, 4-5-4 retail calendars - 13-period calendar - Non-calendar fiscal year

Period Status

Status Meaning Who Can Post
Open Normal operations All users with permissions
Closed to Non-Posting Block non-financial transactions GL transactions only
Closed Fully closed No one (without reopening)
Closed (AR/AP/All) Selective closure Depends on closure type

Month-End Close Checklist

Pre-Close Activities

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Review and post all pending transactions
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Process all open sales orders → invoices
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Process all received inventory → vendor bills
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Complete bank reconciliation
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Review undeposited funds account (should be near zero)

Accruals & Adjustments

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Post revenue accruals for unbilled services
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Post expense accruals for unbilled vendors
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Run prepaid expense amortization
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Run deferred revenue recognition
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Post depreciation entries
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Review and post payroll accrual if needed

Reconciliation

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Reconcile AR aging to GL
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Reconcile AP aging to GL
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Reconcile inventory valuation to GL
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Reconcile fixed assets to GL
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Review intercompany balances (should match)

Multi-Currency

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Update exchange rates to period-end rates
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Run currency revaluation
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Review unrealized gain/loss accounts

Close Period

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Generate financial statements and review
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Run trial balance and verify zero-sum
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Close period in NetSuite

Year-End Close

Additional Year-End Tasks

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Complete all month-end close tasks for December (or fiscal year-end)
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Review and post year-end audit adjustments
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Run inventory count and adjustments
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Review allowance for doubtful accounts
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Post income tax provision
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Run Year-End Close (rolls net income to retained earnings)

Year-End Close Process

Path: Setup → Accounting → Manage Accounting Periods Select Year → Close Year What Happens: 1. System calculates Net Income for the year 2. Creates journal entry: Dr: Income Summary (all revenue accounts) Cr: Income Summary (all expense accounts) Dr/Cr: Retained Earnings (net) 3. Income statement accounts reset to zero for new year 4. Balance sheet rolls forward with new retained earnings Note: You can still reopen a closed year if needed (with proper permissions)
Year-End Close Timing

You don't need to run year-end close immediately. NetSuite allows transactions in the new year while the prior year remains open. Run year-end close after audit adjustments are complete (often 60-90 days into new year).

Lock Dates

Lock dates provide additional control beyond period status to prevent changes to closed periods.

Lock Date Types

Path: Setup → Accounting → Preferences → General Ledger Lock Dates: ┌─────────────────────────────────────────────────────────────────┐ │ Lock AR (Receivables): 12/31/2024 │ │ Lock AP (Payables): 12/31/2024 │ │ Lock All: 12/31/2024 │ │ │ │ Role Override: │ │ ☐ Allow Administrator override │ │ ☐ Allow specific role override │ └─────────────────────────────────────────────────────────────────┘ Behavior: - Transactions dated on/before lock date cannot be: - Created - Edited - Deleted - Even administrators blocked unless override enabled
Section G.9

Financial Reporting

Standard financial statements, Report Builder, and creating custom financial reports.

Standard Financial Reports

Built-In Financial Statements

Report Path Key Options
Balance Sheet Reports → Financial → Balance Sheet As of date, subsidiary, consolidated
Income Statement Reports → Financial → Income Statement Period range, comparative periods
Cash Flow Statement Reports → Financial → Cash Flow Statement Direct or indirect method
Trial Balance Reports → Financial → Trial Balance Summary or detail, period comparison
General Ledger Reports → Financial → General Ledger Account detail with all transactions

Report Customization Options

Common Filters (available on most financial reports): Subsidiaries: - Single subsidiary - Consolidated (with or without children) - Multiple selected Periods: - Single period - Period range - Comparative (vs prior period, prior year) - YTD, QTD Segments: - Filter by Department - Filter by Class - Filter by Location - Filter by Custom Segments Display: - Summary (account totals) - Detail (transactions) - Expand to show hierarchy

Financial Report Builder

Report Builder allows creating custom financial reports with complex row/column layouts.

Creating Custom Financial Report

Path: Reports → Financial → Financial Report Builder Layout Structure: ┌─────────────────────────────────────────────────────────────────┐ │ ROWS (define what accounts/items to include) │ │ Row 1: Revenue (account range 4000-4999) │ │ Row 2: COGS (account range 5000-5999) │ │ Row 3: Gross Profit (formula: Row1 - Row2) │ │ Row 4: Operating Expenses (account range 6000-6999) │ │ Row 5: Operating Income (formula: Row3 - Row4) │ ├─────────────────────────────────────────────────────────────────┤ │ COLUMNS (define periods/comparisons) │ │ Col A: Current Month Actual │ │ Col B: Current Month Budget │ │ Col C: Variance (formula: ColA - ColB) │ │ Col D: Variance % (formula: ColC / ColB * 100) │ │ Col E: YTD Actual │ │ Col F: YTD Budget │ └─────────────────────────────────────────────────────────────────┘

Row Types

Type Purpose Example
Account Single account or account range 4100 or 4000-4999
Summary Subtotal of rows above Total Revenue
Formula Calculation using other rows Gross Margin % = R3/R1
Text Label or heading Section header
Line Visual separator Horizontal line

Column Types

Type Purpose Example
Period Specific accounting period Dec 2024, Q4 2024
Range Period range (YTD, QTD) Jan-Dec 2024
Budget Budget amounts 2024 Operating Budget
Formula Calculation using other columns Variance = Actual - Budget
Prior Period Comparative period Same period prior year

Departmental/Segment P&L

P&L by Department

Path: Reports → Financial → Income Statement Filters: Period, Subsidiary Rows/Columns: Show Departments as columns Output: Sales Marketing Engineering G&A Total Revenue 500,000 50,000 10,000 5,000 565,000 COGS 300,000 0 0 0 300,000 Gross Profit 200,000 50,000 10,000 5,000 265,000 Operating Exp 50,000 100,000 150,000 75,000 375,000 Operating Inc 150,000 (50,000) (140,000)(70,000) (110,000)

Custom P&L Layout Example

Board-Ready P&L Report: Row Layout: 1. Total Revenue 2. Product Revenue 3. Service Revenue 4. Other Revenue 5. (blank line) 6. Cost of Revenue 7. Gross Profit (formula) 8. Gross Margin % (formula) 9. (blank line) 10. Sales & Marketing 11. Research & Development 12. General & Administrative 13. Total Operating Expenses 14. Operating Income 15. Operating Margin % Column Layout: A. Current Month B. Budget C. Variance $ D. Variance % E. Prior Year Month F. YoY Change % G. YTD Actual H. YTD Budget I. Full Year Forecast
Section G.10

GL for Specific Modules

Module-specific GL considerations for Manufacturing, Revenue Recognition, Fixed Assets, and more.

Manufacturing WIP Accounts

Work In Process requires specific account setup for tracking production costs through completion.

Required WIP Accounts

Account Type Purpose
WIP - Materials Other Current Asset Raw materials in production
WIP - Labor Other Current Asset Labor costs in production
WIP - Overhead Other Current Asset Overhead applied to production
WIP Variance COGS or Expense Variance at work order close
Scrap COGS or Expense Material loss/scrap

WIP GL Flow

Work Order Lifecycle GL: 1. WORK ORDER ISSUE (Material to WIP) Dr: WIP - Materials $10,000 Cr: Raw Materials Inventory $10,000 2. LABOR RECORDED (if using time tracking) Dr: WIP - Labor $2,000 Cr: Labor Clearing $2,000 3. WORK ORDER COMPLETION (FG to Inventory) Dr: Finished Goods Inventory $15,000 Cr: WIP - Materials $10,000 Cr: WIP - Labor $2,000 Cr: WIP - Overhead $3,000 4. WORK ORDER CLOSE (Variance) Dr: WIP Variance $500 Cr: WIP - Materials $500 (if actual costs differed from standard)

Advanced Revenue Management (ARM)

ASC 606/IFRS 15 compliant revenue recognition requires specific GL accounts.

ARM Account Types

Account Type Purpose
Deferred Revenue Other Current Liability Billed, not yet recognized
Unbilled Receivable Unbilled Receivable Recognized, not yet billed
Deferred COGS Other Current Asset COGS matched to deferred revenue
Revenue Income Recognized revenue

ARM GL Flow Example

Scenario: 2-year SaaS subscription, $24,000 paid upfront 1. INVOICE CREATED Dr: Accounts Receivable $24,000 Cr: Deferred Revenue $24,000 2. PAYMENT RECEIVED Dr: Cash $24,000 Cr: Accounts Receivable $24,000 3. MONTHLY RECOGNITION (x 24 months) Dr: Deferred Revenue $1,000 Cr: Subscription Revenue $1,000

Fixed Assets

Fixed Asset Management module tracks asset lifecycle from acquisition through disposal.

Fixed Asset Accounts

Account Type Purpose
Fixed Asset - [Category] Fixed Asset Asset cost (Equipment, Vehicles, etc.)
Accumulated Depreciation Accum Depreciation Contra-asset for depreciation
Depreciation Expense Expense Monthly depreciation charge
Gain/Loss on Disposal Other Income/Expense Difference on asset sale

Fixed Asset GL Flow

Asset Lifecycle: 1. ACQUISITION ($50,000 equipment) Dr: Equipment $50,000 Cr: Accounts Payable $50,000 2. MONTHLY DEPRECIATION (5-year straight-line) Dr: Depreciation Expense $833 Cr: Accumulated Depreciation $833 3. DISPOSAL (sold for $10,000, NBV $15,000) Dr: Cash $10,000 Dr: Accumulated Depreciation $35,000 Dr: Loss on Disposal $5,000 Cr: Equipment $50,000

Project Accounting

Project-based businesses track revenue and costs by project for profitability analysis.

Project GL Considerations

  • Segment tracking: Use Class or custom segment for projects
  • WIP for services: Track unbilled time as project WIP
  • Revenue recognition: Percentage-of-completion or milestone
  • Cost allocation: Direct vs indirect project costs

Project Accounting GL Flow

Time & Materials Project: 1. LABOR INCURRED Dr: Project WIP (Class: Project X) $5,000 Cr: Salaries Expense $5,000 2. INVOICE CREATED Dr: Accounts Receivable $7,500 Cr: Service Revenue (Class: Proj X) $7,500 3. COST RECOGNITION Dr: Project COGS (Class: Project X) $5,000 Cr: Project WIP (Class: Project X) $5,000 Project P&L (by Class): Revenue: $7,500 COGS: $5,000 Margin: $2,500 (33%)
Section G.11

Troubleshooting

Common GL issues, reconciliation problems, and how to resolve them.

Trial Balance Out of Balance

Symptoms

  • Trial balance debits ≠ credits
  • Balance sheet doesn't balance
  • Net income ≠ change in retained earnings

Common Causes

Cause Detection Resolution
Unposted transactions Search for status = Pending Approval Post or void pending transactions
Multi-currency rounding Check currency rounding account Review FX transactions, run revaluation
System error GL Audit log shows imbalance Contact NetSuite Support
Data import error Review recent imports Identify and correct bad data

Diagnostic Steps

1. Run Trial Balance report Reports → Financial → Trial Balance Compare total debits vs credits 2. Run GL Audit Trail Reports → Financial → General Ledger Audit Trail Look for transactions with imbalanced entries 3. Check for orphaned transactions Saved Search: Transactions where GL Impact = true AND posting = true AND (debit total ≠ credit total) 4. Review currency rounding account Run GL report filtered to Currency Rounding account Large balances indicate FX issues

Subledger to GL Reconciliation

AR Reconciliation

AR Reconciliation Process: 1. Run AR Aging Report Reports → Receivables → A/R Aging Note total balance 2. Run GL Balance for AR Account Reports → Financial → Trial Balance Filter to AR accounts 3. Compare totals AR Aging Total should = AR GL Balance Common Differences: - Unapplied payments (show in GL, not aging) - Posted deposits (reduce AR but may not show in aging) - Multi-currency timing (revaluation not run) - Credit memos unapplied Resolution: - Review A/R Register for detail - Identify transactions in GL but not aging - Apply unapplied payments/credits

AP Reconciliation

AP Reconciliation Process: 1. Run AP Aging Report Reports → Payables → A/P Aging Note total balance 2. Run GL Balance for AP Account Reports → Financial → Trial Balance Filter to AP accounts 3. Compare totals AP Aging Total should = AP GL Balance Common Differences: - Unapplied credits - Unbilled receipts (inventory received, no bill) - Prepayments - Multi-currency variances

Inventory Reconciliation

Inventory Reconciliation Process: 1. Run Inventory Valuation Report Reports → Inventory/Items → Inventory Valuation Note total value 2. Run GL Balance for Inventory Accounts Reports → Financial → Trial Balance Filter to Inventory Asset accounts 3. Compare totals Inventory Valuation should = Inventory GL Balance Common Differences: - Pending item receipts - Pending item fulfillments - Cost adjustments not posted - Location-specific account variances Resolution: - Run Inventory Revalue if using Standard Cost - Review pending transactions - Check item account assignments

Common GL Errors

Error: "This transaction is out of balance"

Cause Solution
Journal entry debits ≠ credits Add missing line or adjust amounts
Multi-currency rounding Adjust rounding on one line
Tax calculation error Review tax setup, recalculate

Error: "Cannot post to closed period"

Cause Solution
Transaction date in closed period Change date to open period
Period locked Request unlock from admin (if appropriate)
Need adjustment to closed period Reopen period, post adjustment, re-close

Error: "Account restricted to specific subsidiaries"

Cause Solution
Account not available for selected subsidiary Use account valid for subsidiary
Need account in new subsidiary Edit account to add subsidiary access

GL Health Check

Periodic GL health checks prevent issues from accumulating.

Monthly GL Health Check

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Trial balance in balance (debits = credits)
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AR aging = AR GL balance
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AP aging = AP GL balance
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Inventory valuation = Inventory GL balance
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Bank reconciliation complete
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Undeposited funds account minimal/zero
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Intercompany accounts in balance
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No pending approval transactions from prior period
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Review suspense/clearing accounts (should be zero)