ANS-1741 · ONEWORLD & MULTI-SUBSIDIARY
How to Record Intercompany Transactions with Different Currencies
Learn to manage intercompany receivables and payables between subsidiaries operating in distinct currencies using NetSuite journal entries and deposits.
Short answer
To handle intercompany transactions across different currencies without a physical check, create an Intercompany Journal Entry to record the receivable/payable and then make a deposit. This process ensures proper accounting for both subsidiaries, reflecting the transfer of funds and intercompany balances.
Scenario
A NetSuite user needs to record an intercompany transaction between two subsidiaries, London Sub and Singapore Sub, which operate in different currencies. The transaction involves a transfer of funds where a physical check is not required, and the goal is to properly account for the intercompany receivable and payable.
Solution
To record an intercompany transaction with different currencies when a physical check is not required, the process involves creating an Intercompany Journal Entry and subsequently making a deposit.
Create an Intercompany Journal Entry:
Navigate to
Transactions > Financial > Make Intercompany Journal Entries. The journal entry should reflect the following structure, ensuring proper intercompany receivable and payable balances:
London Sub Dr. Receivable from Singapore Sub GBP1,000London Sub Cr. Cash/Bank GBP1,000Singapore Sub Dr. Undeposited Fund GBP1,000Singapore Sub Cr. Payable to London Sub GBP1,000While 'Undeposited Funds' is a valid account, current best practices for intercompany settlements often leverage dedicated intercompany clearing accounts or automated intercompany transaction types for improved reconciliation and elimination.
Make Deposit:
Proceed to make a deposit to the Singapore Subsidiary's account to complete the transaction.
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