How to Migrate Intercompany AP/AR Balances in NetSuite?

Utilize the Advanced Intercompany Journal Entry record type. This record type is designed for intercompany transactions and allows for defining multiple receiving subsidiaries, offering more flexibility than a single header 'To Subsidiary' field. NetSuite requires both the ‘Subsidiary’ and the ‘To Subsidiary’ (or equivalent line-level intercompany partner identification) to be populated for the transaction to be recognized as intercompany. These fields point to the proper elimination account.

Ensure the ‘Eliminate’ box is checked on each line requiring elimination through the period close process.

It is recommended that postings to Profit & Loss (P&L) accounts and Balance Sheet accounts be recorded in separate journal entries.Postings to P&L accounts (ex.: Revenue, Expense, COGS, etc.) should reflect the activity on the account throughout the period, as opposed to the balance at a specific point in time.Postings to Balance Sheet accounts (ex.: AP, AR) should reflect the balance at a specific point in time (i.e., balance at the end of each period).

Entries for Balance Sheet accounts should be posted on the last day of the period and subsequently reversed on the first day of the following period.

For AP and AR accounts, a value in the ‘Name’ column is required. Users must select the Customer or Vendor record representing the other subsidiary involved in the intercompany transaction. Failure to populate this field will result in a NetSuite error message, a requirement that also applies to non-intercompany journal entries.

Journal entries should be balanced using the 'Opening Balance' account, following standard accounting practices.

It is crucial to perform the first period close to validate that postings to intercompany accounts are eliminated correctly.

Manually apply the intercompany journal entries to the respective Intercompany Customer records. Navigate to each Intercompany Customer record and select ‘Accept Payment’. On the 'Invoices' and 'Credit' tabs, all relevant Journal Entries and their reversals will be visible. Check the ‘apply’ box next to each. If the initial imports were executed correctly, the amounts should net to zero, resulting in a $0 Payment Amount. Save the ‘Payment’. While this manual application process is effective for clearing balances, automating this specific application step can present complexities.

Apply the same logic for Intercompany Vendor records by initiating a ‘Pay a Single Vendor’ transaction to clear outstanding balances.

For any remaining open intercompany balances or for ongoing operational intercompany activity, it is recommended to utilize dedicated intercompany transaction types, such as intercompany sales orders and purchase orders, in line with current NetSuite best practices, rather than solely relying on journal entries.