We have values posting to the system-generated account Intercompany Clearing Account when posting Intercompany transfer orders. I understand from SuiteAnswers that we can view the values posted here as a Payable and Receivable in each subsidiary. I’m fine with that and it makes sense. The problem is, the account can’t be selected for Intercompany Elimination (the checkbox is disabled) and all the communication on SuiteAnswers talks about Time and Materials and my clients finance team don’t know what to do with this ever growing balance in each subsidiary.
What do others do to manage this account. What is the best practice treatment for this account when related to Intercompany Transfer Orders
Solution
The Intercompany Clearing Account is a system-generated account by NetSuite that is not eliminated by default during the Period Close Checklist.
You cannot check the Eliminate Intercompany Transactions for this system generated account.
Instead, in order to manually close the balances of these accounts, we will have to manually enter an Intercompany Journal Entry to write-off the corresponding amounts to the appropriate Intercompany AP/AR as documented under SuiteAnswers ID 44194: Clearing Intercompany Clearing Account Balances. Once the balances have been closed to the Intercompany AP and AR accounts, these will be automatically eliminated in the Consolidated level once Eliminate Intercompany Transactions has been run in the Period Close Checklist.