Phase 3 of 14

Configure

Configuration transforms your design decisions into a working system. This phase establishes the core infrastructure that every transaction, report, and process will depend on. Precision here prevents problems everywhere else.

Chapter 3.1

Company Setup

The Company Information page is your starting point. Settings here affect everything from transaction numbering to how your company appears on forms and communications.

Accessing Company Setup

Setup → Company → Company Information

This page contains fundamental settings that should be configured before any transactions are entered. While most settings can be changed later, some (like base currency) cannot be modified once transactions exist.

Essential Company Information

Company Identity

  • Company Name: Your legal business name as it should appear on forms, invoices, and reports
  • Legal Name: The official registered name if different from the display name
  • EIN/Tax ID: Federal Employer Identification Number for US companies
  • State Tax ID: State-specific tax registration numbers

Address Information

  • Main Address: Primary business address that appears on forms
  • Return Address: Address for shipping returns (can differ from main)
  • Ship-From Address: Default origin for shipping calculations
Tip: Address Formatting

NetSuite uses the main address on customer-facing documents. Ensure it's formatted exactly as you want it to appear. Include suite numbers, building names, and proper postal codes. For international operations, verify country names match NetSuite's list.

Fiscal Calendar Settings

Your fiscal year configuration affects period-based reporting, budgeting, and closing processes.

Setting Options Impact
Fiscal Year Start Any month Determines period structure for all reporting
Fiscal Year End Handling Calendar, 52/53 Week How year-end date is calculated
Accounting Periods Monthly, 4-4-5, 4-5-4, Custom How the year is divided into periods
Warning: Fiscal Year Changes

Changing your fiscal year start month after transactions exist creates significant complications. NetSuite doesn't automatically restate historical data into new periods. Plan this correctly before your first transaction.

Time Zone and Locale

Time Zone Selection

The company time zone affects:

  • Default transaction dates when entered
  • Scheduled script execution times
  • Report date filtering behavior
  • Email send timestamps

Date and Number Formats

These settings control how dates and numbers display throughout the system:

  • Date Format: MM/DD/YYYY (US), DD/MM/YYYY (UK/EU), YYYY-MM-DD (ISO)
  • Number Format: Decimal separator (period vs comma), thousands separator
  • Negative Number Display: Minus sign, parentheses, or red color
Consultant Insight

For companies operating across regions, set the company-level format to your headquarters' preference. Individual users can override these in their own preferences. However, CSV imports always use the company format, which catches many people off guard.

Logo and Branding

Upload your company logo for use on transactions, forms, and emails.

Logo Requirements

  • Format: PNG, JPG, or GIF (PNG recommended for transparency)
  • Size: Maximum 400x400 pixels; 200x100 typical for letterhead
  • File Size: Under 5MB (smaller is better for email performance)

Multiple Logos

You can upload multiple logo files and select different ones for different purposes:

  • Form/PDF logo (high resolution for printing)
  • Email logo (optimized for web viewing)
  • Portal logo (for customer/vendor centers)
Company Setup Checklist
Company name and legal name entered correctly
Tax IDs (EIN, State) configured
All addresses verified and formatted
Fiscal year start month confirmed
Time zone set appropriately
Date and number formats configured
Company logo(s) uploaded
Chapter 3.2

Accounting Configuration

Accounting preferences determine how NetSuite handles transactions, postings, and financial processes. These settings establish the accounting behavior that matches your business requirements.

Accessing Accounting Preferences

Setup → Accounting → Accounting Preferences

General Accounting Settings

Accounting Method

Decision: Accounting Basis
Accrual Basis Revenue and expenses recognized when earned/incurred regardless of cash movement. Required for GAAP compliance and larger businesses.
Cash Basis Revenue and expenses recognized when cash is received/paid. Simpler but limits financial analysis. Common for small businesses.
Note: Dual-Basis Reporting

NetSuite can maintain both accrual and cash basis books simultaneously. This is useful for companies that need accrual for management but cash basis for tax purposes. Enable this under Setup → Accounting → Accounting Preferences → General subtab.

Void Transactions Using Reversing Journals

When enabled, voiding a transaction creates a reversing journal entry instead of deleting the GL impact. This maintains audit trails and is required for most compliance frameworks.

Use Account Numbers

Controls whether account numbers are displayed alongside account names throughout the system. Strongly recommended for:

  • Users familiar with account numbers
  • Faster account selection in transactions
  • Cleaner integration with external systems
  • Professional appearance on reports

Period Close Settings

Allow Non-GL Changes in Closed Periods

Determines whether users can modify non-financial fields (like memo, custom fields) on transactions in closed periods. Options:

  • Warn: Users see a warning but can proceed
  • Warn and Require Override: Requires specific permission to proceed
  • Disallow: No modifications permitted in closed periods

Year-End Close Journal

NetSuite can automatically create year-end close entries that zero out income and expense accounts to Retained Earnings. Configure:

  • Whether to auto-generate close journals
  • The Retained Earnings account to use
  • Timing of the close process

Transaction Numbering

Control how transaction numbers are generated across the system.

Setting Description Recommendation
Auto-Generated Numbers System assigns sequential numbers automatically Use for most transaction types
Allow Override Users can change auto-generated numbers Enable only if business requires
Prefix by Transaction Type Add type indicators (INV-, SO-, PO-) Improves readability and search
Numbering by Subsidiary Separate sequences per subsidiary Enable for OneWorld multi-sub
Warning: Number Sequence Gaps

In some jurisdictions (particularly Europe and Latin America), gaps in invoice numbering can create tax compliance issues. If this applies to you, disable "Allow Override" and be careful with voided transactions. Consider using separate numbering sequences for different document types.

Approval Routing

Configure which transactions require approval before posting or processing.

Common Approval Scenarios

  • Purchase Orders: Approval based on amount thresholds
  • Vendor Bills: Three-way match or management approval
  • Journal Entries: Controller/CFO review
  • Credit Memos: Sales manager authorization
  • Expense Reports: Manager and finance approval

Basic approval routing uses simple approval preferences. For complex multi-level approvals, consider SuiteFlow workflows or the Advanced Approvals SuiteApp.

Revenue Recognition Settings

If your business requires deferred revenue recognition (SaaS, subscriptions, long-term contracts), configure these settings:

Revenue Recognition Feature

Setup → Company → Enable Features → Accounting
  • Revenue Recognition: Basic deferral and recognition schedules
  • Advanced Revenue Management: ASC 606/IFRS 15 compliant recognition with allocation rules
Consultant Insight

Revenue recognition configuration is complex and deserves its own design phase. If you're implementing Advanced Revenue Management, plan for significant configuration and testing time. The standard feature is sufficient for simple scenarios like ratably recognizing a 12-month subscription.

Chapter 3.3

Chart of Accounts Setup

With your design complete (Phase 2), it's time to build the chart of accounts in NetSuite. This chapter covers the mechanics of creating, organizing, and managing accounts.

Creating Accounts

Lists → Accounting → Accounts → New

Required Fields

  • Account Number: Your designed account number (if using numbers)
  • Account Name: Descriptive name for the account
  • Account Type: Determines behavior and statement placement
  • Currency: For multi-currency, the account's currency (or "All Currencies")

Optional but Important Fields

  • Parent Account: For creating account hierarchies
  • Description: Guidance for users on when to use this account
  • Subsidiary: Which subsidiaries can use this account (OneWorld)
  • Include Children: Whether transactions can post to parent accounts

Account Types Deep Dive

Choosing the correct account type is critical—it affects reporting placement, default behavior, and available features.

Type Statement Special Behaviors
Bank Balance Sheet - Current Assets Available for bank reconciliation; register view
Accounts Receivable Balance Sheet - Current Assets System-controlled; linked to customer transactions
Unbilled Receivable Balance Sheet - Current Assets For revenue recognized before billing
Other Current Asset Balance Sheet - Current Assets Prepaid expenses, deposits, misc. receivables
Fixed Asset Balance Sheet - Fixed Assets Works with Fixed Assets Management module
Accumulated Depreciation Balance Sheet - Fixed Assets (contra) Negative balance reduces fixed asset total
Accounts Payable Balance Sheet - Current Liabilities System-controlled; linked to vendor transactions
Deferred Revenue Balance Sheet - Current Liabilities Works with Revenue Recognition feature
Income Income Statement - Revenue Revenue accounts; rolls to Retained Earnings
Cost of Goods Sold Income Statement - COGS Updated by inventory costing engine
Expense Income Statement - Operating Expenses Standard operating expenses
Other Income Income Statement - Below the Line Interest income, gains on disposal
Other Expense Income Statement - Below the Line Interest expense, losses, non-operating costs
Equity Balance Sheet - Equity Capital, retained earnings, distributions
Statistical Not on statements Non-monetary tracking (headcount, sq ft)
Critical: System-Controlled Accounts

Accounts Receivable and Accounts Payable are special. NetSuite creates these automatically (one per subsidiary for OneWorld). You cannot post directly to these accounts—they're updated by invoices, bills, payments, etc. Don't create additional AR/AP accounts unless you have a specific use case like Intercompany AR/AP.

Building Account Hierarchy

NetSuite supports unlimited levels of parent-child account relationships. Use these to create meaningful roll-ups for reporting.

Parent Account Rules

  • Parent and child must have the same account type
  • Parent accounts can be set to disallow direct posting (summary only)
  • Reports can show any level of the hierarchy
  • Sub-accounts inherit some properties from parents

Example Hierarchy

6000 - Operating Expenses (Parent - No Posting) 6100 - Payroll Expenses (Sub-parent - No Posting) 6110 - Salaries & Wages (Posting) 6120 - Payroll Taxes (Posting) 6130 - Benefits (Posting) 6200 - Facilities (Sub-parent - No Posting) 6210 - Rent (Posting) 6220 - Utilities (Posting)

Bulk Account Creation

For large chart of accounts, use CSV import rather than creating accounts one by one.

Setup → Import/Export → Import CSV Records → Account

Import Tips

  • Create parent accounts first, then children (or import in two passes)
  • Use internal IDs for parent account references after first import
  • Include all subsidiaries that should access each account
  • Test with a small batch first
Tip: Account Import Template

Download a sample import from an existing account record: Lists → Accounting → Accounts → Export. This gives you the exact format NetSuite expects, including all available columns.

Special Accounts to Configure

Certain accounts serve special purposes and should be set up carefully:

Default Accounts

  • Default Receivable: Used when no specific A/R account is assigned
  • Default Payable: Used when no specific A/P account is assigned
  • Undeposited Funds: Holds payments before bank deposit
  • Retained Earnings: Where net income closes at year-end
  • Cumulative Translation Adjustment: For currency translation (OneWorld)

Inventory-Related Accounts

  • Inventory Asset: Where inventory value is recorded
  • COGS: Where sold inventory cost flows
  • Inventory Adjustment: For write-offs and adjustments
  • Work in Process: For manufacturing (if applicable)
Chapter 3.4

Subsidiaries & Locations

Subsidiaries and locations provide organizational structure in NetSuite. Understanding when to use each—and how they interact—is crucial for proper system design.

Subsidiaries vs. Locations

This is one of the most misunderstood distinctions in NetSuite. Choose incorrectly, and you'll face significant rework.

Aspect Subsidiaries Locations
Purpose Legal/financial entities Physical/operational sites
Financial Statements Separate Balance Sheet & P&L P&L segmentation only
Currency Each has its own base currency Uses subsidiary's currency
Tax Reporting Separate tax entities Part of subsidiary's tax return
Intercompany Formal IC transactions required N/A - same legal entity
Bank Accounts Separate per subsidiary Shared within subsidiary
License Requirement OneWorld edition Available in all editions
Decision: Subsidiary or Location?
Use Subsidiary Separate legal entity, different tax jurisdiction, different base currency, needs its own balance sheet, or intercompany transactions required.
Use Location Same legal entity, warehouse/store/office tracking, inventory management by site, or regional P&L analysis without separate legal books.

Configuring Subsidiaries (OneWorld)

Setup → Company → Subsidiaries → New

Essential Subsidiary Settings

  • Name: How the subsidiary appears in lists and reports
  • Parent: Creates subsidiary hierarchy for consolidation
  • Country: Affects tax defaults and address formatting
  • Currency: The subsidiary's base currency (cannot change after transactions)
  • Logo: Can have different branding per subsidiary
  • Fiscal Calendar: Can differ from parent (uncommon)
Warning: Subsidiary Currency Lock

Once a subsidiary has any transactions, its base currency cannot be changed. Verify currency is correct before entering any data, including opening balances. If you need to change it later, you'll need to delete all transactions or create a new subsidiary.

Subsidiary Hierarchy

Subsidiaries can be nested to create a corporate structure. This enables:

  • Consolidated financial statements at any level
  • Roll-up reporting through the hierarchy
  • Elimination entries at consolidation points

Configuring Locations

Setup → Company → Locations → New

Location Settings

  • Name: Location identifier for selection and reporting
  • Parent: Creates location hierarchy
  • Subsidiary: Which subsidiary owns this location (OneWorld)
  • Address: Physical address for shipping calculations
  • Make Inventory Available: Can this location hold inventory?
  • Use Bins: Enable bin-level inventory tracking

Location Use Cases

  • Warehouses: Inventory locations with potentially different costs
  • Retail Stores: Point of sale locations
  • Branch Offices: Regional cost centers
  • Manufacturing Plants: Production facilities
  • Drop-Ship Locations: Virtual locations for vendor-shipped items
Tip: Location Hierarchy

Like accounts, locations can have parent-child relationships. Use this for regional groupings (e.g., "West Region" parent with "Seattle Warehouse" and "Portland Warehouse" as children). Reports can then show data at any level of the hierarchy.

Subsidiary-Location Relationships

In OneWorld, locations are assigned to subsidiaries. This relationship affects:

  • Which users can see and use the location
  • Which accounts are available for transactions at that location
  • Inventory valuation and costing
  • Reporting roll-ups
Cross-Subsidiary Locations

A location can be shared across subsidiaries if needed (e.g., a shared warehouse). Select multiple subsidiaries when creating the location. However, inventory is still tracked separately by subsidiary—they share the physical location but have separate inventory pools.

Chapter 3.5

Departments & Classes

Departments and Classes are classification segments that enable dimensional reporting without cluttering your chart of accounts. They're your primary tools for management reporting and cost analysis.

Understanding Classification Segments

NetSuite provides four standard classification segments:

Segment Typical Use Hierarchy
Subsidiary Legal entities (OneWorld) Yes
Location Physical sites, warehouses, stores Yes
Department Organizational units, cost centers Yes
Class Flexible: product lines, projects, regions Yes

All four segments appear on every transaction and journal entry, providing multi-dimensional analysis without additional accounts.

Departments

Setup → Company → Departments → New

Common Department Structures

  • Functional: Sales, Marketing, Engineering, Finance, Operations
  • Cost Center: Each department is a cost center for budget tracking
  • Responsibility: Aligned with management responsibility areas

Department Hierarchy Example

Operations (Parent) Manufacturing Quality Control Shipping & Receiving Sales (Parent) Inside Sales Field Sales Sales Operations
Consultant Insight

Departments often mirror the org chart, but they don't have to. Design departments around how you need to analyze costs and performance, not necessarily how HR has structured reporting lines. A good test: "Will we ever need a P&L or budget for this group?" If yes, it should be a department.

Classes

Setup → Company → Classes → New

Classes are the most flexible segment—use them for whatever analytical dimension is most important to your business after departments and locations are assigned.

Common Class Uses

  • Product Lines: Hardware, Software, Services, Support
  • Business Units: Consumer, Enterprise, Government
  • Projects: Track revenue and costs by project
  • Regions: If not using locations for geography
  • Brands: For multi-brand companies
  • Channels: Direct, Partner, Online, Retail
Decision: What Should Class Represent?
Product Lines Best when profitability by product category is a key metric. Most common choice.
Projects When project-level P&L is critical. Consider Project Accounting module for advanced needs.
Channels When you need to analyze profitability by sales channel or customer segment.

Segment Configuration Settings

Making Segments Mandatory

Setup → Accounting → Accounting Preferences → Classification

You can require segments at transaction header, line level, or both:

  • Header-level: One value applies to entire transaction
  • Line-level: Each line can have different values
  • Both: Header provides default, lines can override

Restricting Segments by Subsidiary

In OneWorld, you can limit which departments, classes, and locations are available to each subsidiary. This prevents users from accidentally selecting segments that don't apply to their entity.

Warning: Retroactive Mandate

If you make a segment mandatory after transactions exist, NetSuite won't retroactively require the field on historical data. You'll have incomplete segment data unless you update old transactions—a potentially massive undertaking.

Default Segment Values

Reduce data entry errors by setting intelligent defaults:

  • On Employees: Default department for expense reports
  • On Items: Default class for revenue recognition
  • On Customers: Default class or location for orders
  • On Vendors: Default department for bills

Defaults flow to transactions automatically but can be overridden when needed.

Chapter 3.6

Custom Segments

When the four standard segments aren't enough, Custom Segments let you add additional classification dimensions that behave like native segments—appearing on transactions and in reports.

When to Use Custom Segments

Custom Segments are powerful but add complexity. Consider them when:

  • All four standard segments are already fully utilized
  • You need a fifth (or sixth, etc.) dimension for financial analysis
  • The dimension needs to appear on financial reports natively
  • The dimension requires GL impact tracking
Consultant Insight

Before creating a custom segment, exhaust alternatives. Can you repurpose Class? Can you use a custom field on transactions instead? Custom segments have reporting benefits but increase complexity. I've seen companies with six custom segments who struggle to maintain clean data.

Creating Custom Segments

Customization → Lists, Records, & Fields → Custom Segments → New

Configuration Options

  • Label: How the segment appears on forms and reports
  • ID: Script ID for development reference
  • Record Type: The custom record type that stores segment values
  • Filterable: Whether it can filter reports
  • Show in List: Display in transaction lists

Enabling on Transactions

After creating the custom segment, you must explicitly add it to:

  • Transaction types (Sales Orders, Invoices, etc.)
  • Transaction line types
  • Account types
  • Entity types (if applicable)

Common Custom Segment Examples

Segment Use Case Values Example
Grant Nonprofits tracking grant-restricted funds General, Grant A, Grant B, Federal Grant
Fund Fund accounting requirements Operating, Restricted, Endowment
Program Program-based budgeting Education, Outreach, Administration
Contract Contract-level profitability Contract #12345, Contract #67890
Brand Multi-brand companies Brand X, Brand Y, Private Label
Business Line Divisional reporting Consumer, Commercial, Government

Custom Segments vs. Custom Fields

Understanding the difference helps you choose the right approach:

Feature Custom Segment Custom Field
Appears on GL Yes - part of GL posting No - transaction level only
Financial Reports Native column/filter Requires saved search
Setup Complexity Higher Lower
Performance Impact Higher Lower
Hierarchy Support Yes No
Best For Financial dimensions Operational tracking
Tip: Start with Custom Fields

If you're unsure whether you need a custom segment, start with a custom field. You can always upgrade to a segment later (though migration requires effort). Going the other direction—removing a custom segment—is much harder.

Chapter 3.7

Tax Configuration

Tax configuration in NetSuite ranges from simple single-jurisdiction setups to complex multi-state, international tax scenarios. This chapter covers the foundations and highlights the 2025.2 tax enhancements.

Tax Features in NetSuite

Setup → Company → Enable Features → Tax

Core Tax Features

  • Tax Calculations: Basic tax calculation on transactions
  • Tax Groups: Combine multiple tax codes into one rate
  • Tax Schedules: Apply different rates by item/customer type
  • Tax Reporting: Generate tax liability reports

Advanced Tax Features

  • SuiteTax: Modern tax engine for complex scenarios
  • Tax Codes by Country: International VAT/GST handling
  • Nexus Management: Track where you have tax obligations

Basic US Sales Tax Setup

Step 1: Define Nexus

Setup → Tax → Nexus

Create a nexus record for each state where you have tax collection obligations. Post-Wayfair, this often means any state where you exceed economic nexus thresholds.

Step 2: Create Tax Codes

Setup → Tax → Tax Codes

Create tax codes for each jurisdiction with appropriate rates. For simple scenarios, you might have one per state. Complex scenarios require city and county codes.

Step 3: Configure Tax Groups

Tax groups combine multiple tax codes when a single transaction is subject to multiple jurisdictions (state + county + city).

New in 2025.2: US State-Level Tax Exceptions

NetSuite 2025.2 introduces enhanced handling for state-level tax exceptions. You can now configure exceptions for specific product categories (like food, clothing, or medical equipment) that have different tax treatment in certain states. This reduces the need for complex tax schedules and item-level overrides.

SuiteTax vs. Legacy Tax

NetSuite offers two tax engines. New implementations should strongly consider SuiteTax.

Feature Legacy Tax SuiteTax
Tax Determination Manual setup Rule-based automation
International Support Limited Comprehensive
Rate Updates Manual Automated (with subscription)
Complexity Handling Basic Advanced
Performance Good Better for high volume
Migration Effort N/A Significant from Legacy
Recommendation: New Implementations

For new implementations, start with SuiteTax unless you have a very simple, single-state business with no growth plans. Migrating from Legacy to SuiteTax later is painful—far easier to start with SuiteTax from day one.

International Tax (VAT/GST)

For companies operating internationally, NetSuite supports:

  • VAT/GST Registration: Track registration numbers by country
  • Tax Point Date: Control when tax liability is recognized
  • Reverse Charge: For B2B cross-border EU transactions
  • Multiple Tax IDs: Different registrations per subsidiary
  • Country-Specific Reports: VAT returns, EC Sales Lists
Warning: International Tax Complexity

International tax configuration is complex and jurisdiction-specific. This chapter covers concepts, but actual implementation should involve a tax professional familiar with each country's requirements. Getting VAT wrong can result in significant penalties.

Tax Integration Options

For complex US sales tax, many companies integrate with third-party tax engines:

  • Avalara AvaTax: Most common NetSuite tax integration
  • Vertex: Enterprise-grade tax calculation
  • Thomson Reuters ONESOURCE: For large enterprises

These integrations provide:

  • Automatic rate updates
  • Address validation and rooftop-level accuracy
  • Product taxability research
  • Exemption certificate management
  • Filing services
Consultant Insight

If you sell to consumers in more than 10 states, seriously consider a tax integration like Avalara. The cost is typically justified by reduced compliance risk and time savings. The integration is straightforward—usually completed in a day or two.

Chapter 3.8

Currency & Exchange Rates

Multi-currency functionality enables transactions in foreign currencies while maintaining books in your base currency. Proper configuration ensures accurate financial reporting and currency gain/loss tracking.

Enabling Multi-Currency

Setup → Company → Enable Features → Company

Enable "Multiple Currencies" to transact in currencies other than your base currency. This feature cannot be disabled once enabled and transactions exist.

Warning: Irreversible Feature

Multi-Currency is a one-way door. Once enabled with transactions, it cannot be turned off. However, there's rarely a reason to disable it—even single-currency companies benefit from having the option available.

Currency Setup

Lists → Accounting → Currencies

NetSuite comes with most world currencies pre-loaded. For each currency you'll use:

Currency Record Settings

  • Symbol: How the currency appears on forms (€, £, ¥)
  • ISO Code: Standard three-letter code (EUR, GBP, JPY)
  • Exchange Rate: Current rate vs. your base currency
  • Display Format: Symbol position, decimal places
  • Override Format: Customize display per currency

Enabling Currencies on Entities

Currencies must be explicitly added to:

  • Customer records (for sales)
  • Vendor records (for purchasing)
  • Subsidiary records (in OneWorld)

Exchange Rate Types

NetSuite supports multiple exchange rate types for different purposes:

Rate Type Purpose Use Case
Current Standard transactional rate Daily transactions
Average Period average rate P&L translation
Historical Rate at time of transaction Equity translation
Custom User-defined rates Budgeting, planning

Exchange Rate Management

Manual Rate Entry

Lists → Accounting → Currency Exchange Rates

Enter rates manually for each currency pair and date. Suitable for low-volume or infrequent currency transactions.

Automatic Rate Updates

NetSuite can automatically fetch exchange rates from external providers:

  • NetSuite Rate Provider: Built-in daily rate updates
  • Third-Party Integrations: XE, Oanda, or custom feeds
Tip: Rate Update Schedule

Configure automatic rate updates to run early in your business day (e.g., 6 AM local time). This ensures current rates are available when users start entering transactions. For high-volume trading companies, consider intraday updates.

Currency Gain/Loss

When exchange rates change between transaction date and payment date, NetSuite records currency gain or loss.

Types of Currency Gain/Loss

  • Realized: Actual gain/loss when payment is made (closed invoice)
  • Unrealized: Paper gain/loss on open balances (revaluation)

Configuring Gain/Loss Accounts

Setup → Accounting → Accounting Preferences

Specify accounts for:

  • Realized Gain Account
  • Realized Loss Account
  • Unrealized Gain Account
  • Unrealized Loss Account
Note: Single vs. Separate Accounts

You can use a single account for all currency gains/losses, or separate accounts by realized/unrealized and gain/loss. Separate accounts provide more detailed reporting but require more maintenance. Most companies use two accounts: one for realized and one for unrealized.

Currency Revaluation

At period end, revalue open foreign currency balances to recognize unrealized gains/losses.

Transactions → Financial → Revalue Open Currency Balances

Revaluation Process

  1. Ensure period-end exchange rates are entered
  2. Run revaluation for the period
  3. Review proposed adjustment journal
  4. Post the revaluation entry
Consultant Insight

Schedule currency revaluation as part of your monthly close checklist. Run it after all transactions are entered but before generating financial statements. Some companies automate this with a scheduled script, though manual review is recommended for the first several months.

Multi-Currency Best Practices

Currency Configuration Checklist
Base currency set correctly per subsidiary
All needed currencies enabled
Exchange rate update process established
Gain/Loss accounts configured
Currencies assigned to customers and vendors
Revaluation process documented and scheduled
Bank accounts set up per currency if needed