Journal Entries represent transactions that may or may not affect the General Ledger. Without proper authorization, these entries cannot advance for posting. Since not every account within a company influences the overall financial picture, NetSuite categorizes the resulting journal entries into posting and non-posting types. Non-posting journals exert no effect on financial statements. With a vast array of account and transaction types, NetSuite offers the following categories of Journal Entries suitable for each scenario.
9 Journal Entries Within NetSuite
1. System Generated Journals
These entries are read-only and illustrate the general ledger impact of transactions that are at different completeness stages within the system. NetSuite automatically generates these based on the data entered into a form that triggers the entry.
Example – A Depreciation Entry created by the system utilizing details from assets outlined in the FAM forms.
2. Advanced Inter-Co Journal
These are entries that occur between two or more subsidiaries; one serves as the receiver while another is the originator. There can be multiple originating and receiving subsidiaries. Appropriate currencies must be chosen for each to create the necessary financial impact.
Example – Product X acquired by a subsidiary from the parent company.
3. Amortization and Expense Allocation Journals
NetSuite’s Automated Intercompany Management feature provides tools to manage intercompany transactions and automatically generate elimination journal entries as required. These entries proceed as per the amortization and allocation schedule set up, automatically shifting balances from expense accounts to others.
Example – Allocation of a one-time shared cost distributed over a year.
4. Revenue Recognition Journals
Enabled by the Advanced Revenue Management module, these entries rely on revenue recognition schedules to allocate revenue against items and services over time.
5. Statistical Journals
If the Statistical Accounts option is activated, you can perform single-sided transactions by class, department, location, or custom segment. Statistical journals display as a positive debit amount. These are categorized as non-posting Journal Entries and do not influence the company’s financials.
Example – Employee headcount throughout the hire-to-retire process.
6. Book Specific Journals
Activated through the Multi-Book features, each company can maintain two sets of accounts, one for the parent company and another for its subsidiaries. This allows for book-specific journal entries and related intercompany journal entries.
7. Period End Journals
As part of the Period Closure checklist, these journals are automatically created in the background when closing the books of accounts within the system.
8. Balancing Journals
When the Balancing Segments feature is activated, transactions generated by the process that equalizes transactions by segment are referred to as balancing journals.
9. Manual Journals
To manage and adjust entries in the accounts that do not rely on system-generated data, Manual Journals can be employed, which can either be hand-filled or uploaded in CSV format into the system.
In summary, a majority of the journals in NetSuite are system-driven, as they are largely automated and require minimal manual intervention. This automation enhances control over the integrity and confidentiality of the system.
