Setting Up Automated Inter Company Management

The Intercompany Framework feature requires the Automated Intercompany Management feature. If you use only the Automated Intercompany Management feature, the Intercompany Preferences page includes fewer preferences.

1. Create elimination subsidiaries

To create:

1. Navigate to Setup > Company > Subsidiaries > New 

2. Enter all required details including the below:

• Subsidiary of = This will become the parent company of the elimination subsidiary
• Elimination = True

3. Click Save

2. Enable the Automated Intercompany Management feature. An administrator must go to Setup > Company > Setup Tasks > Enable Features. Click the Accounting subtab. Under the Advanced Features section, check the Automated Intercompany Management box, and then save. (It cannot be turned off when enabled)

When this feature is turned on:

• NetSuite adds the system-generated Cumulative Translation Adjustment-Elimination (CTA-E) account to your chart of accounts. Checked the same with XSEED, account is found.
• NetSuite adds the Eliminate Intercompany Transactions task as the last task in the Period Close Checklist.
• An Eliminate box displays for journal lines on standard and advanced intercompany journal entries.
• NetSuite creates the Standard Intercompany Vendor Form and the Standard Intercompany Customer Form records. These records include the Represents Subsidiary field, which does not display on the standard vendor and customer records.
• NetSuite adds the Intercompany Status and Paired Intercompany Transactions fields to the Sales Order, Purchase Order, Return Authorization, and Vendor Return Authorization pages.
• NetSuite adds the Eliminate Intercompany Transactions box to the Account record.
• Create Intercompany elimination accounts
  • Go to Setup > Accounting > Manage G/L > Chart of Accounts > New.
  • Complete the fields as required.
  • Check the Eliminate Intercompany Transactions box.
  • Select the subsidiaries to use the Intercompany Framework and Automated Intercompany Management features.
  • Click Save

3. Create Representing Entities.

NetSuite can automatically create representing entities, if in preference it is checked.

Generating Representing entities from subsidiaries entity page.

If you set the Automatically Generate Representing Entities preference and then save, you can view the system-generated entities on the Subsidiaries list page. The Representing Entities subtab on the Intercompany Preferences page provides a link to the Subsidiaries list page. If you want to regenerate representing entities, the Subsidiaries list page includes a Generate Representing Entities button.

They create intercompany customers and vendors.

The default receivable account for an intercompany customer must be an intercompany receivable account. For intercompany vendors, the default payable account must be an intercompany payable account.

To manually create intercompany customers

• Go to Lists > Relationships > Customers > New.
• In Custom Form, select your custom intercompany customer form. (In XSEED Customer Form it is available)
• Enter the information for the intercompany customer including:
  • Company Name: Use a naming convention to identify this as an intercompany entity such as U.S. Customer in Canada Sub.
  • Subsidiary: Select the subsidiary to which this entity belongs.
  • Represents Subsidiary: Select the subsidiary that the entity represents.
• On the Financial subtab, for Default Receivables Account, select an intercompany receivable account from the list.
  • This is the default intercompany receivables account for the customer.
• Complete other information as needed for the customer.
• Click Save.

To manually create intercompany vendors

1. Go to Lists > Relationships > Vendors > New.
2. In Custom Form, select your custom intercompany vendor form.( (In XSEED Vendor Form it is available)
3. Enter the information for the intercompany vendor including:
   1. Company Name: Use a naming convention to identify this as an intercompany entity such as U.S. Vendor in Canada Sub.
   1. Subsidiary: Select the subsidiary to which this entity belongs.
   1. Represents Subsidiary: Select the subsidiary that the entity is representing.
4. On the Financials subtab, or Default Payables Account, select an intercompany payable account from the list.

This is the default intercompany payable account for the vendor.

• Complete other information as needed for the vendor.
• Click Save.

4. Inventory Item for Intercompany transfer.

For ARM Length Inventory Transfers

Source and Destination subsidiaries have access to the inventory item.

This preference should not be enabled. “Use Item Cost as Transfer Cost” Go to Setup > Accounting > Preferences > Accounting Preferences . Click the Order Management subtab. Under the Transfer Orders section, ensure the preference is not enabled.

For Non ARM Length Inventory Transfers

For the account selected in Gain/Loss Account check the Eliminate Intercompany Transactions box

For intercompany Dropship Items

For this feature, Setup > Company > Setup Tasks > Enable Features. Click the Accounting subtab. Under the Advanced Features section, check the Automated Intercompany Drop Ship box, and then save.

The account used for the DropShip Expense Account must have the Eliminate Intercompany Transactions box checked.