ANS-0542 · ONEWORLD & MULTI-SUBSIDIARY
How to Handle Customer Payments Across Multiple Subsidiaries in NetSuite?
Learn how to manage customer payments when invoices originate from a different subsidiary than the primary bank account, ensuring proper intercompany reconciliation.
Short answer
To process customer payments for invoices from a different subsidiary, the payment must first be recorded against a bank account belonging to the invoice's subsidiary. If no such account exists, a dummy bank account should be created. Subsequently, an intercompany journal entry is required to transfer funds to the desired primary bank account using an intercompany clearing account.
Scenario
Organizations operating with multiple subsidiaries in NetSuite often encounter situations where a customer invoice is issued by one subsidiary (e.g., Ireland), but the primary bank account for receiving payments resides in a different subsidiary (e.g., US). NetSuite's design requires that the customer payment’s sub matches the invoice’s sub, preventing direct payment to a bank account in a different legal entity.
Solution
The fundamental principle in NetSuite is that your invoice’s sub has to match the customer payment’s sub. To address scenarios involving multiple subsidiaries for customer payments:
Process the payment for the invoice using a bank account associated with the invoice's subsidiary. For instance, an Irish invoice must be paid using an Irish bank account.
If a suitable bank account for the invoice's subsidiary does not exist, a dummy one must be created within that subsidiary for the purpose of recording the payment.
Execute an intercompany JE to debit the amount to the US bank account using some IC Clearing account.
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