Distributing Expenses Across Subsidiaries in NetSuite via the Transaction Line Distribution SuiteApp

Nowadays, many businesses use NetSuite’s OneWorld which enables them to manage records and transactions for their multiple subsidiaries. Often time, these businesses also need to manage expenses between these subsidiaries, and the new Transaction Line Distribution SuiteApp allows them to do just that.

The SuiteApp not only allows companies to distribute their expenses between subsidiaries, but it also allows them to distribute expenses between classifications, custom segments, departments, locations, and accounts. The SuiteApp enhances a company’s ability to streamline the entry of vendor bills and credits by utilizing reusable expense distribution templates, thereby increasing efficiency and accuracy.

The SuiteApp currently only supports vendor bills and vendor credits. Below, we are going to walk through how to set up the Transaction Line Distribution SuiteApp, and an example of how the SuiteApp automatically shares an expense from one subsidiary to another, all on one vendor bill based on the setup. We will go over the following steps:

1. Managing Preferences
2. Installation
3. Customizing Roles
4. Generating the Representing Entities
5. Setting the Default Intercompany Accounts
6. Creating the Distribution Template
7. Creating the Vendor Bill
8. Analyzing the GL Impact
9. Analyzing the Advanced Intercompany Journal Entry

1. Managing Preferences

In Setup > Accounting > Accounting, ensure the 3 preferences are set:

In Setup > Company > Enable Features, ensure the 2 features are enabled:

2. Installation

To Install the SuiteApp, follow the 4-steps below:

• Go to the SuiteApps
• In the Search Apps field, enter Transaction Line Distribution.
• Click the Transaction Line Distribution SuiteApp
• On the top right area of the Transaction Line Distribution SuiteApp details page, click Install.

3. Customizing Roles

To use the SuiteApp, the administrator must create two custom roles. If the administrator already has these roles, make sure that these roles have the permissions below:

4. Generating the Representing Entities

In Setup > Accounting > Intercompany Preferences, ensure the preference is set in the Representing Entities subtab:

• Automatically Generate Representing Entities.

Then, navigate to Setup > Company > Subsidiaries, and press “Generate Representing Entities”.

• This will create a Representing Vendor and a Representing Customer for each subsidiary.
• The purpose of this is that you need an entity to represent the buyer and one to represent the seller when distributing expenses across subsidiaries.
• The subsidiary that is sharing the expense to the other subsidiary is the seller and the subsidiary that is receiving the expense is the buyer.

5. Setting the Default Intercompany Accounts

Navigate to Setup > Accounting > Intercompany Preferences and then press the Accounting subtab.

• For the Receivables Account, select an intercompany account.
• For the Payables Account, select an intercompany account.
• The purpose of these accounts is that the Intercompany AP account tracks the amount due to the buyer and the Intercompany AR account tracks the amount due from the seller.

Then, navigate to Setup > Accounting > Accounting Preferences and select the Items/Transactions subtab.

• For the “Default ICJE Auto Balance Receivables Account” field, select an intercompany account.
• For the “Default ICJE Auto Balance Payables Account” field, select an intercompany account.
• These are the intercompany accounts that will appear on the Advanced Intercompany Journal.

Example

Now that the accounts and entities are set up, we’ll dive into an example of a subsidiary distributing expenses to another subsidiary.

In this example, we are going to create a $1000 vendor bill in subsidiary United States – East and we will distribute 75% of that to the United States – West subsidiary.

6. Creating the Distribution Template

Login to the Custom CFO role and navigate to Setup > Accounting > Transaction Dist. Templates > New.

• The “Use Source Accounts” field uses the account on the vendor bill as the destination accounts.
• If you don’t want to create a template for every scenario of vendor bills, you can press the “Quick Distribution” button while creating a vendor bill, which will allow you to select a destination subsidiary and account on the fly.

7. Creating the Vendor Bill

• Login to the Custom A/P Clerk
• When creating the vendor bill, select the distribution template and create an expense line item for $1000.
  • If you are creating multiple lines, you can mark the “Line Dist. Exclude” check box to remove that line from being a distributed expense.
• Save the vendor bill.

8. Analyzing the GL Impact

On the GL impact, you will see that an expense account is debited and a payables account is credited, just like any other vendor bill.

9. Analyzing the Advanced Intercompany Journal

Once the vendor bill has been approved, navigate to the Related Records subtab and press the JE hyperlink.

• You can see that the Advanced Intercompany Journal took away $750 worth of expenses from the East subsidiary and distributed it to the West subsidiary.
• If the Advanced Intercompany Journal is not being created, go to the Script Deployments and view the settings on the TD_MR_JournalEntryForm

Takeaway

You have now successfully distributed an expense from one subsidiary to another. This process can be replicated for distributing expenses across classifications, custom segments, departments, locations, and accounts. If you would like more information on distributing expenses via the Transaction Line Distribution SuiteApp, reach out to NetSuite consultants at RSM US LLP

RSM Staff