In the previous article, we discussed the manual creation of elimination journal entries in NetSuite. In this article, we will focus on the automation side using the Automated Intercompany Management feature. Automated Intercompany Management helps simplify the elimination process by automatically identifying and generating elimination entries for intercompany transactions during period close. To enable the feature, visit New to NetSuite | Enabling Automated Intercompany Management.
There are two main steps to eliminate intercompany transactions using Automated Intercompany Management.
1. Enter Intercompany Transactions
During the accounting period, intercompany transactions can be entered through:
1.1 Through Intercompany Vendor Bills and Sales Invoices
Intercompany vendor bills and sales invoices are created from paired intercompany purchase orders and sales orders. These transactions automatically post to intercompany accounts and are marked as candidates for elimination.
The following transaction lines are automatically marked for elimination:
- Income
- Expense
- Accounts Receivable (A/R)
- Accounts Payable (A/P)
There is no separate Elimination flag displayed on these transaction lines because NetSuite automatically identifies them for elimination processing.
The following account types should only be used for elimination purposes:
- Other Current Asset (Non-Inventory)
- Other Asset
- Deferred Expense
- Deferred Revenue
- Other Current Liability
- Long Term Liability
1.2 Through Intercompany Advanced Intercompany Journal Entries (AICJE)
Advanced intercompany journal entries can also be used to record intercompany transactions that require elimination.
When an intercompany account is selected on a journal line, NetSuite automatically sets the Eliminate flag to Yes. This behavior is based on the Eliminate Intercompany Transactions setting configured on the intercompany account record.
AICJEs also require elimination lines to remain balanced, helping maintain accurate consolidated reporting.
2. Run Intercompany Elimination During Period Close
Once transactions are entered and marked for elimination, run the Intercompany Elimination task during period close. See New to NetSuite | Running the Intercompany Elimination Task in the Period Close Checklist.
Automated Intercompany Management helps streamline intercompany accounting by reducing manual work and improving consolidation accuracy. By properly entering intercompany transactions and running the elimination task during period close, NetSuite can automatically generate the necessary elimination entries for consolidated reporting.
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