NetSuite’s standard functionality restricts a project to be associated with only single subsidiary, single currency and single customer. However, there are some workarounds that can be implemented to meet the client’s requirement of billing a project under different subsidiaries over different periods. Here are the potential solutions:
- Create two separate projects for the two subsidiaries as a standard procedure: This is the standard approach. You create two separate projects—one for each subsidiary. Each project will have its own billing terms, currency, and customer association.
- Pros:
- Clean Separation: Each project remains independent, making it easier to manage and track.
- Standard Practice: Aligns with NetSuite’s default behavior.
- Cons:
- Duplication: Requires maintaining two separate projects, which can be cumbersome if there are many common elements between them.
- Reporting Challenges: Reporting across multiple projects might be complex. In that case, the standard report customization needs to be done. Creating invoices from two different subsidiaries may necessitate additional customizations, which currently exceed our operational scope.
- Change the impact of the invoice of a subsidiary to another subsidiary using Journal: This workaround involves using journal entries to transfer the billing impact from one subsidiary to another. Here’s how it works:
- Create an Intercompany Clearing Account: Set up an intercompany clearing account (a balance sheet account) that acts as a bridge between the two subsidiaries.
- Billing Process: When you invoice the customer for the project, create the invoice in the subsidiary where the project is primarily associated. Debit the intercompany clearing account and credit the accounts receivable account.
- Transfer the Billing Impact: Create a journal entry to transfer the billing impact from the primary subsidiary to the secondary subsidiary. Debit the accounts receivable account in the primary subsidiary and credit the intercompany clearing account. Debit the intercompany clearing account in the secondary subsidiary and credit the accounts receivable account.
- Impact on Financial Statements: The journal entry ensures that the revenue and accounts receivable are correctly reflected in both subsidiaries.
Note: Both solutions have trade-offs, and the choice depends on your specific business context, reporting needs, and the level of customization.