NetSuite MultiBook Accounting

Why NetSuite Multibook Accounting?

Whenever the same business event requires different accounting treatments. In order to report financial results within compliance based on multiple accounting standards concurrently, accounting departments can leverage NetSuite Multi-Book to comply with multiple sets of financial books in parallel and issue financial statements in accordance with whichever accounting standards are required. This will reduce the manual work needed by the accounts to comply with various compliances whether it is for a country or industry specific.

Features of NetSuite Multibook Accounting

There are various features some of which includes but not limited to:

1. Automated Accounting Rule-Driven Engine: NetSuite Multibook eliminates the need for the manual posting of entries in different books, as it will automatically do the posting based on the structure of that book driven from the primary book. Using a rule-driven engine, accounting departments can create business transactions while automatically posting the activity to all books efficiently, in accordance with the appropriate accounting standards.
2. Foreign Currency Management: Accounting departments can use NetSuite MultiBook to record transactions in book-specific functional currencies. Automatically calculate the impact of exchange rates, including realized and unrealized foreign currency gains/losses in compliance with ASC 830, SFAS 52 and other foreign currency management regulations. NetSuite Multi-Book also help you avoid errors related to differences in ASC and IFRS standards for revenue recognition, lease accounting, insurance and other rules.
3. Reporting Capabilities: Standard financial reports are available for internal and external reporting, as well as customizable saved searches to analyze and manage key performance indicators. With an intuitive user interface dashboard and toolset that doesn’t require developers or technical resources, endusers will have self-serve access to drill down quickly and easily into the real-time answers they need.

Key Things to Keep in Mind

Key things to keep in mind while configuring MultiBook within NetSuite

1. What should be functional curreny of international subsidiary: It is always a good practise to review the subsidiary functional currency in primary book before configuring the Secondary book. For example, if the parent company is in USA and child company in Canada but transactions in Canadian company is done in USD, so instead of creating a secondary book for CAD you can setup the base currency of Canadian comapny in USD and create a secondary book for CAD. This will result in CTA being calculated in secondary book which will become your Statutary book instead of primary book. Primary book will be used for your functional currency which is USD.
2. Running Historical Transactions: If you an existing user of NetSuite and implementing MultiBook, running historical transactions in secondary book in an important step which should not be missed before activating the books. If you have inventory then the start date of a secondary book should be set to the first transaction of inventory so that the inventory costing can be calculated in the secondary books. This feature is sometimes not provisioned beforehand by NetSuite, in that case a request should be made to NetSuite support.
3. Account Mapping: Account mapping between primary books and secondary books should be done before the historical transactions are ran, this is only needed if the posting account type in each book is different. If the account is same but the naming/codeconvention is different then the feature of “Accounting Context” can be used which allows you to setup different account names and gl code for each localisation. One key thing to keep in mind is the page to setup account mapping for Gl Accounts (Global Account Mapping) and Item Accounts (Item Account Mapping) is different.
4. Revenue Setup: If the revenue rule is different in the secondary book, it is necessary to configure revenue rule on items before running historical transaction.