Defining Intercompany Preferences
When an administrator enables the Intercompany Framework feature or the Automated Intercompany Management feature, NetSuite provides access to the Intercompany Preferences page.
If you use both features, you can define default intercompany accounting preferences and markup rates for cross-subsidiary transactions. If you use only the Automated Intercompany Management feature, you define fewer accounting preferences.
To define intercompany preferences, you must have the Setup Accounting permission.
You must create intercompany elimination accounts before you can set preferences for the Intercompany Framework and Automated Intercompany Management features. See Creating Intercompany Elimination Accounts.
To define intercompany preferences:
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Go to Setup > Accounting > Preferences > Intercompany Preferences.
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On the Accounting subtab in the Default Intercompany Accounts section, define the following default intercompany general ledger elimination accounts:
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Receivables Account – This account can be any account of the receivable type.
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Payables Account – (Intercompany Framework only) This account can be any account of the payable type.
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Income Account – This account can be any account of the income type.
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Expense Account – This account can be any account of the expense type.
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COGS Account – (Automated Intercompany Management only) This account can be any account of the Cost Of Goods Sold (COGS) type.
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Deferred Revenue Account – (Automated Intercompany Management only) This account can be any deferred revenue account. NetSuite sets this account as the default on item records.
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Netting Clearing Account – (Intercompany Framework only) NetSuite automatically creates this account when an administrator enables the Intercompany Framework feature.
Note:If the Netting Clearing Account has not been successfully generated after enabling the Intercompany Framework feature, go to Transactions > Financial > IC Netting. Going to this page fixes this issue and automatically generates the account.
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(Intercompany Framework only) In the Trade Currency section, select the transaction currency for use in the cross charge transactions. For more information, see Intercompany Cross Charges.
Important:If you edit an account or currency selected for cross charge generation, it remains selected even if it is no longer valid for selection. If you inactivate an account or currency selected for cross charge generation, it remains selected even when inactivated. If you delete an account or currency selected for cross charge generation, NetSuite removes it from selection.
Select the default intercompany currency exchange rate type for intercompany transactions. Intercompany Netting and Cross Charge Automation support the Currency Exchange Rate Types feature. The Currency Exchange Rate Types feature lets you store multiple currency exchange rates for a currency pair and date. For more information, see Currency Exchange Rate Types.
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In the Transaction section, the default selection for Cross Charge Output Type is journal.
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Choose how to group cross charges. Summarized grouping is the default.
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In the Classification section, check the Allow Per-Line Classification for Netting Settlement box to have NetSuite classify all netting settlements based on the netted transactions.
Note:NetSuite supports all classifications as well as custom segments. If the netted transactions specify a department, class, location, or custom segment, NetSuite groups the lines in the Netting Settlement based on these classifications. NetSuite also considers the general ledger account associated with the netted transactions in the grouping. If there are multiple transactions with the same classifications, including custom segments and general ledger accounts, NetSuite groups them into one line. If any classification in the netted transaction is different, NetSuite displays a separate line for that classification.
Click the Default Cross Charge Classification Preference per Subsidiary link to open the Subsidiary Settings Manager page. Specify default cross charge classification preferences by subsidiary on the Intercompany Framework subtab. For more information, see Subsidiary Settings Manager.
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Click the Transfer Price Methods subtab.
The default transfer price method to support intercompany cross-subsidiary fulfillment and return is cost plus, an expense (price amount). NetSuite bases the transfer price on a markup rate (expense plus a percentage of the expense).
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Enter a percentage value in Markup Rate % for both cross-subsidiary fulfillment and cross-subsidiary fulfillment return.
Note:The percentage value must be 0% or higher with 2 decimal precision. The percentage determines the system-calculated markup over the original transaction expense. A 0% would not generate a markup over the original expense. The rate cannot be a negative percentage.
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Click the Intercompany Entities subtab.
This subtab is for users who want NetSuite to create and maintain representing entities for the Automated Intercompany Management feature. There are prerequisites to set the Automatically Create Representing Entities preference. NetSuite requires the Multi Subsidiary Customer feature to generate representing entities. In addition, if you use the Multiple Currencies feature, you must also enable the Multi-Currency Vendor and Multi-Currency Customer features.
If you provide a prefix, you can quickly identify the representing entities generated and maintained by NetSuite.
For more information about representing entities, see Representing Entities.
Note:You can stop NetSuite from generating and maintaining representing entities by clearing the Automatically Generate Representing Entities box. The Is Autogenerated Representing Entity is automatically cleared on all autogenerated customers and vendors. You can then manually edit, update, and delete them.
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Click Save.
After you save your preferences, the Intercompany Entities subtab provides a link to the Processed Records page. This page provides the status of the representing entity creation process. See Processed Records. From the Processed Records page you can open the Process Status page. See Process Status.
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Click the System Notes subtab to view the saved or changed values.
When there is at least one cross charge journal in any open accounting period, NetSuite disables the preferences related to cross charges. NetSuite also disables related options in the Subsidiary Settings Manager. To modify the related preferences, you must first delete all cross charges in all open periods. You can delete the cross charges on the Cross Charge Workbench page. For more information, see Intercompany Cross Charges.