Journal Entries

Journal Entries in NetSuite

Journal entries in NetSuite are used to manually record financial transactions directly in the General Ledger. These entries allow businesses to adjust account balances, record non-transactional events, and ensure accurate financial reporting. Journal entries are a key tool for accountants and finance teams to manage their organization's books.

Types of Journal Entries in NetSuite

1. Standard Journal Entries:

   • Used for routine adjustments or corrections.

   • Examples:

     • Accruals (e.g., accrued expenses or revenues)

     • Prepaid expenses

     • Reclassification of account balances

2. Recurring Journal Entries:

   • Automates repetitive journal entries that need to be posted at regular intervals.

   • Examples:

     • Monthly rent expenses

     • Depreciation of fixed assets

3. Intercompany Journal Entries (For OneWorld Accounts):

   • Used to record transactions between subsidiaries in multi-entity setups.

   • Ensures proper tracking of intercompany balances.

4. Statistical Journal Entries:

   • Records statistical data, such as headcount, square footage, or machine hours, which can be used for allocation purposes or custom reports.

5. Dynamic Allocation Journal Entries:

   • Automatically allocates amounts across accounts, classes, departments, or subsidiaries based on predefined allocation schedules.

How to Create a Journal Entry in NetSuite

1. Navigate to the Journal Entry Form:

   • Go to Transactions > Financial > Make Journal Entries.

2. Enter Basic Details:

   • Subsidiary: (For OneWorld accounts) Specify the subsidiary for which the entry is being made.

   • Date: Enter the date of the journal entry.

   • Posting Period: Select the appropriate accounting period.

3. Add Journal Lines:

   • Specify the account for each line (e.g., Expense, Revenue, Asset).

   • Enter Debit or Credit amounts.

   • Optionally, add dimensions like:

     • Department

     • Class

     • Location

     • Customer/Vendor/Project (if applicable)

4. Balancing:

   • Ensure the total debit and credit amounts are equal. NetSuite will not allow you to save unbalanced entries.

5. Save or Approve:

   • Save the journal entry, or submit it for approval if the system requires manager approval.

Key Features of Journal Entries in NetSuite

1. Multi-Currency Support:

   • Create journal entries in foreign currencies with automatic currency conversion based on exchange rates.

2. Attachments:

   • Attach supporting documents, such as invoices or contracts, to journal entries.

3. Approval Workflow:

   • Configure approval workflows to ensure that journal entries are reviewed by the appropriate personnel before posting.

4. Audit Trail:

   • Tracks all changes to journal entries, ensuring transparency and accountability.

5. Saved Searches and Reporting:

   • Use saved searches and reports to analyze journal entries by account, department, location, or other criteria.

6. Importing Journal Entries:

   • Bulk import journal entries using CSV files or the SuiteCloud tools for faster processing.

Common Use Cases for Journal Entries

1. Month-End Adjustments:

   • Record accruals, deferrals, and other adjustments to close the books.

2. Expense Reclassification:

   • Reallocate expenses between departments, classes, or locations.

3. Intercompany Transactions:

   • Record transfers, charges, or allocations between subsidiaries.

4. Currency Revaluations:

   • Adjust balances in foreign currency accounts based on exchange rate changes.

5. Corrections:

   • Fix errors in previous transactions without directly editing them.

Best Practices for Journal Entries in NetSuite

1. Use Proper Account Codes:

   • Ensure journal entries use the correct accounts to avoid misclassification.

2. Add Descriptions:

   • Provide detailed descriptions for each line item for clarity and audit purposes.

3. Utilize Dimensions:

   • Always assign appropriate dimensions like department, class, and location for better reporting and tracking.

4. Review and Reconcile Regularly:

   • Periodically review journal entries to ensure accuracy and completeness.

5. Automate Where Possible:

   • Use recurring journal entries or allocation schedules to reduce manual effort.

Reports and Tools for Managing Journal Entries

1. General Ledger Report:

   • Shows all journal entries posted to the ledger, grouped by account.

2. Trial Balance:

   • Summarizes account balances, including those from journal entries.

3. Journal Entry Saved Search:

   • Customize and filter journal entries by date, account, subsidiary, or other dimensions.

4. Audit Trail:

   • Use the system’s built-in audit tools to monitor changes made to journal entries.