NetClose - Account Grouping Subsidiary Configuration

Summary

NetClose Account Groupings can be split into subsidiary groups to customize how different subsidiaries reconcile their accounts, and who owns those reconciliations. While these "child groupings" refer to the same accounts (if you want to group accounts differently, you just need to make different account groupings), each subsidiary can have completely different reconciliation rules, thresholds, owners, and approvers.

In this article, we'll discuss how to set up these child groupings and explore what difference that'll make to your reconciliation records. If you're unfamiliar with account groupings and need help setting them up, you'll want to start in the account grouping basic configuration article before continuing on with this one.

Segregating by Subsidiary

When you look at any account grouping, you'll see the "segregate by subsidiary" checkbox right at the top of the record.  View full size

When checked, instead of a single reconciliation for the consolidated impact of all transactions across subsidiaries, an individual reconciliation record will be created for each subsidiary available to the group of accounts. This means that if any account in your grouping is available in all subsidiaries, a reconciliation will be made for each subsidiary. If across all of your mapped accounts they are only available in two or three subsidiaries, reconciliations will be created for only those two or three subsidiaries.

If this box is checked without having any child subsidiaries tied to the account grouping, the same reconciliation rules, account owner, approvers, and thresholds will be applied to all of the subsidiaries; the only difference between the reconciliations will be the amount that needs to be reconciled, which will be the amount corresponding to that subsidiary*.

Having child account groupings enables you to apply different rules, thresholds, account owners, or approvers to a set of accounts to be reconciled. This is the more advanced setup that we'll address in the next section.

Creating Child Groupings

First, you'll need to open any NetClose Account Grouping record; you can find these at NetClose > Setup > Account Groupings & Rules. Once in the account grouping, go to the "Children" subtab, pictured below. You'll see a list of all associated child groupings, and a button to create a New NetClose Account Grouping. Hitting that button will take you to a page to create a new child grouping.

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There are a few differences between creating a child account grouping and a standard account grouping:

1. There are no options to segregate by subsidiary or account--this is controlled on the parent account grouping record. 

2. There will be a new "Parent Rule" field where you can see which account grouping is acting as a parent to this one. 

3. While there is a "Mapped Accounts" sublist, you won't be able to assign accounts to a child grouping. Account assignment is limited to parent account groupings; if you want to reconcile accounts differently, just make another account grouping for that account. 

4. There is a "Subsidiary" subtab you can click on. This subtab will give you a multi-select box where you can choose which subsidiaries your child grouping applies to. This is the most important difference; this is the reason to make account groupings--to have different reconciliation criteria for different subsidiaries.

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To get your child grouping set up:

1. Fill out all of the primary information--you'll really just need a name and risk level. The parent rule will be pre-populated. For a name, we recommend including the parent grouping name and then some identifier to tell you what child grouping this is (EMEA, APAC, NA for location identifiers, or maybe MFG or Admin for functional identifiers).

2. Decide who the account owner and approver(s) will be and assign them. This can be different from your parent grouping.

3. Go to the "Subsidiary" subtab and select the subsidiaries this child grouping will apply to.

4. Head to the "Reconciliation Rules" subtab and fill in the reconciliation requirements. Everything here can be the same as the parent (if all you want to change between subsidiaries is the owner/approver(s)), or you can have different auto-reconciliation criteria and thresholds for different subsidiary groups. Refer back to our Account Grouping Basic Configuration article for more information about these reconciliation rules and thresholds.

Then just save your account grouping, and that's it! You'll now see your child grouping listed under the "Children" subtab of your primary account grouping.

Generating Reconciliations with Child Groupings

Generating a reconciliation with child groupings will be the same as generating all of your other reconciliations; you'll navigate to NetClose > Close Management > Generate Reconciliations and see the normal generation screen. Only your parent account grouping will show up in the list--everything will seem exactly the same until you generate your reconciliations. 

Once you generate your reconciliations, you'll notice that your subsidiaries are broken out into individual lines, and the name of the reconciliation will have the name of the child grouping instead of the parent grouping for the subsidiaries assigned to each child grouping. Any subsidiaries that aren't assigned to a child grouping will be assigned to the parent grouping by default. 

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Notice in the screenshot above that some balances are auto-reconciled while others are not, even though they have the same or similar balances. The QA Holdings Inc. reconciliation has an unexplained balance of 0, but is "Not Started", yet the QA Elim reconciliation has a 0 unexplained balance and is "Auto-Reconciled". This is because the parent grouping (Inventories) doesn't have the "Balances 0 and No Activity in Period" auto-reconciliation rule set on it, but the child grouping (Inventories - Elim) DOES have that setting enabled. Each subsidiary associated with a child grouping will have only the rules applied to that child grouping applied to it (or the parent grouping if no child grouping is assigned). The settings on the parent grouping are not applied to the children, nor the other way around.

If you are segregating your account grouping by subsidiary AND account, you'll see the parent and child grouping rules applied to each account in the parent account grouping rather than to the grouped account balance shown above.

Troubleshooting Errors

If your reconciliations are not generating as expected for your parent-child account groupings, here are a couple possible solutions.

Reconciliation Not Breaking Out by Subsidiary

If you don't see your reconciliation breaking out amounts by subsidiary, make sure your parent grouping has the "Segregate by Subsidiary" box checked. Having child groupings alone doesn't make the parent grouping run according to individual subsidiaries--this setting must be enabled.

Subsidiary Running Parent Account Grouping Rules Instead of Child

Head into your child grouping and make sure that you've selected all of the right subsidiaries under the "Subsidiary" subtab. The multi-select boxes in NetSuite can be a little finnicky; make sure that you're either clicking and dragging over the subsidiaries you want to select, or holding CTRL/CMD as you select each subsidiary. If you don't, selecting a second subsidiary will override the other subsidiaries selected.

Subsidiary Running Incorrect Child Grouping Rules

If you're seeing an unexpected child grouping associated with one of your subsidiaries the most likely cause is that you have that subsidiary listed under multiple child account groupings. Go and check the child grouping being applied to the reconciliation in question and make sure that you didn't accidentally select one of the wrong subsidiaries. If a subsidiary is assigned to multiple child account groupings, the reconciliation creation scripts will run the subsidiary reconciliation using the child grouping with a lower internal ID (meaning that the record was created first).