ANS-1584 · ACCOUNTING & FINANCIAL CONFIGURATION
How to Merge a Custom Retained Earnings Account with NetSuite’s System Account
Understand NetSuite's unique approach to retained earnings and how to consolidate balances from a custom account into the system-generated one.
Short answer
To consolidate a custom retained earnings account with NetSuite's system-generated account, merge the custom account into the system account. While the system account register only shows direct entries, financial reports like the Trial Balance will reflect the combined balance. NetSuite's design prevents actual posting to retained earnings to preserve historical income statements.
Scenario
Users may create a custom retained earnings account and later need to consolidate its balance with the system-generated retained earnings account in NetSuite. The challenge lies in understanding how NetSuite handles retained earnings balances, which are primarily reflected in reporting rather than direct ledger postings for net income.
Solution
The recommended approach is to merge the custom retained earnings account into the system-generated retained earnings account. This action will ensure that the total on the Balance Sheet reflects the combined balance of both accounts.It is important to note NetSuite's design for retained earnings:
The running balance in the system-generated retained earnings account related to Net Income (NI) or Net Loss (NL) is reflected in reporting only.
The actual account register for the system-generated retained earnings account will only show direct entries posted to it (e.g., via Journal Entries).
When running reports such as the Trial Balance, the combined totals from both the merged custom account and the system account will be visible.
NetSuite does not actually post the balance to retained earnings to avoid zeroing out past income statements, which would prevent their historical viewing.
When NetSuite is configured for automatic closing, financial statement figures display as if accounts had been closed, based on the selected reporting periods. The general ledger ties to financials for the same periods across all accounts, except for retained earnings, where the system posts a placeholder entry on the balance sheet to reflect the income for the period run.
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