This guide provides a comprehensive walkthrough for setting up and using Cross-Subsidiary Fulfillment, Intercompany Cross Charges, and Netting in NetSuite to streamline inventory operations and financial reconciliation across subsidiaries.
1. Prerequisite Setup
Enable Required Features
Navigate to: Setup > Company > Enable Features
Under Items & Inventory:
- Enable Multi-Location Inventory
- Enable Intercompany Cross-Subsidiary Fulfillment
Under Transactions:
- Enable Advanced Shipping
- (Optional) Multiple Shipping Routes (enable if required)
Use screenshots to validate checkbox selections.
2. Global Inventory Relationship Configuration
Navigate to: Lists > Supply Chain > Global Inventory Relationship > New
Fill in:
- Originating Subsidiary: The subsidiary entering the sales order
- Inventory Subsidiary: The subsidiary fulfilling the order from its inventory
Click Save.
This enables cross-subsidiary inventory usage between selling and fulfilling entities.
3. Custom Sales Order Form Setup
Navigate to: Transactions > Sales > Enter Sales Orders
Steps:
- Click Customize > Customize Form
- Under Screen Fields > Items, enable “Allow Cross-Subsidiary Fulfillment”
- Save the custom form
4. Create a Cross-Subsidiary Sales Order
Navigate to: Transactions > Sales > Enter Sales Order
In the custom form:
- Select the Customer
- In the Items sublist:
- Check Allow Cross-Subsidiary Fulfillment
- Choose item and Inventory Location
- The Inventory Subsidiary auto-populates
5. Intercompany Cross Charges Overview
When one subsidiary sells and another fulfills the order, NetSuite automatically generates:
- Journal entry for COGS in the fulfilling subsidiary
- Journal entry for Income in the selling subsidiary
No manual invoices or bills are needed between subsidiaries.
6. How to Generate Intercompany Cross Charges
During the Accounting Period:
Navigate to: Transactions > Financial > Manage Intercompany Cross Charges
At Period Close:
Use: Period Close Checklist > Generate Intercompany Cross Charges
System Behavior:
- Auto-approved entries
- Non-editable
- Trading currency is used
- Entries are retained even if re-generated
If preferences are changed, existing entries must be deleted in open periods.
7. Reporting on Intercompany Charges
Use the following reports for visibility and reconciliation:
- Balance Sheet
- Income Statement
- Cash Flow
- A/R and A/P Aging (Detail and Summary)
- Intercompany Elimination Report
8. Best Practices for Cross Charges
- Post customer payments and vendor bill payments after cross charges are generated
- Avoid using:
- Manual intercompany invoices
- Bills
- Journal entries
- Credit memos
Always complete cross charge generation before processing payments.
9. Intercompany Netting
Netting simplifies settlements between subsidiaries by offsetting A/R and A/P balances.
Benefits:
- Reduces the number of transactions
- Minimizes FX risk
- Eases reconciliation
- Speeds up period closing
Process:
- Navigate to Reports > Balance Overview
- Open the Netting Workbench
- NetSuite auto-identifies payable/receivable pairs
- You can manually select or auto-net
Example:
- Subsidiary A owes B: $1,000
- Subsidiary B owes A: $5,000
- → Netting outcome: B pays A $4,000
10. Access & Permissions
To manage intercompany features:
- Ensure user roles have access to both subsidiaries
- Provide role-based access to:
- Netting Workbench
- Intercompany Cross Charges module