PART 2.1 – How do you want to organize the hierarchy for each account type?

You can define a parent account on each account record. A parent account must have the same type as the subaccount. 

You cannot change the account type for an account that has associated posting and non-posting transactions such as sales order and revenue commit. 

The hierarchy for each account type in NetSuite can be organized in different ways depending on the specific needs of your business. However, there are some common practices that can be followed. Here are some examples: 

1. Assets: Organize assets in a hierarchical structure starting with the major categories such as current assets and fixed assets. Under each major category, you can create subcategories such as cash and cash equivalents, accounts receivable, inventory, property, plant and equipment, and intangible assets. 

2. Liabilities: Liabilities can be organized in a similar hierarchical structure as assets, starting with the major categories such as current liabilities and long-term liabilities. Under each major category, you can create subcategories such as accounts payable, accrued expenses, deferred revenue, and long-term debt. 

3. Equity: Equity accounts can be organized into major categories such as contributed capital and retained earnings. Under each major category, you can create subcategories such as common stock, additional paid-in capital, and treasury stock. 

4. Income: Income accounts can be organized in a hierarchical structure starting with the major categories such as revenue and other income. Under each major category, you can create subcategories such as product revenue, service revenue, interest income, and other income. 

5. Expenses: Expenses can be organized in a hierarchical structure starting with the major categories such as cost of goods sold and operating expenses. Under each major category, you can create subcategories such as salaries and wages, rent and utilities, depreciation, and marketing expenses. 

In general, organizing the hierarchy of accounts in NetSuite should reflect the financial reporting needs of your business and the nature of your transactions. It’s important to ensure that the hierarchy is easy to navigate, and accounts are not duplicated or placed in the wrong category. Regularly reviewing and updating your chart of accounts can help ensure that it remains accurate and relevant to your business.