NetLoan - NetSuite Intercompany Prerequisites

Overview

Several Netgain products (NetLoan, NetAsset, NetCash, Shared Transactions, NetClose) rely on NetSuite's native intercompany functionality to post and eliminate transactions across subsidiaries. Before any of those products can create or use intercompany customers/vendors, the underlying NetSuite features below must be enabled and configured — in this order. This article covers the NetSuite-native prerequisite layer only; product-specific setup (e.g., NetLoan's intercompany loan configuration) is covered in separate articles linked at the end.

1. Multi-Subsidiary Customers

Where: Setup > Company > Enable Features > Company tab

Allows a single customer or vendor record to be shared across multiple subsidiaries rather than being scoped to just one. This is the foundational prerequisite — nearly everything downstream (representing entities, intercompany customers/vendors) depends on it, since an intercompany entity must be visible to more than one subsidiary to function.

2. Multiple Currencies

Where: Setup > Company > Enable Features > Company tab

Only required if your subsidiaries use different base currencies. Without it, entities are restricted to a single (company base) currency, and cross-currency intercompany transactions won't work. If you also plan to use Automatically Generate Representing Entities (#4) and your subsidiaries use different currencies, you additionally need Multi-Currency Vendor and Multi-Currency Customer enabled.

3. Automated Intercompany Management

Where: Setup > Company > Enable Features > Accounting tab

This is the feature that makes intercompany customers/vendors "real" to NetSuite:

  • An entity counts as intercompany when its Represents Subsidiary field is populated.
  • Best practice (per internal guidance) is to set these up from one side of the relationship — vendor or customer — rather than creating both manually, since generation can be automated (see #4).
  • Enables the Eliminate Intercompany Transactions checkbox on GL accounts, which flags an account as intercompany for elimination purposes.
  • Requires intercompany customers/vendors (marked as representing a subsidiary) to use accounts marked as eliminating.
  • Enables intercompany transaction pairing for cleaner reporting/reconciliation.
  • Requires an elimination subsidiary to be set up in Accounting Preferences, and enables auto-balancing functionality.

4. Automatically Generate Representing Entities

Where: Setup > Accounting > Intercompany Preferences > Representing Entities subtab

Lets NetSuite auto-generate a representing Customer and Vendor for every subsidiary, rather than requiring manual creation. This is not required to have intercompany entities (see #3), but it is the easiest, least error-prone way to set them up.

  • Once enabled, this also surfaces the representing entities directly on the Subsidiary record.
  • Prerequisites: #1 (Multi-Subsidiary Customers) and #3 (Automated Intercompany Management) are required. #2 (Multiple Currencies, plus Multi-Currency Customer/Vendor) is only required if subsidiaries use different currencies.
  • One entity per subsidiary is usually sufficient. A single representing vendor/customer per subsidiary can transact with any other subsidiary — NetSuite adds all of the subsidiary's currencies and secondary subsidiaries to the representing entity automatically. You generally do not need pair-specific entities (e.g., one entity just for the Sub A ↔ Sub B relationship).
  • Common setup pitfall: an intercompany entity needs Subsidiary-list access to both its own represented subsidiary and the counterparty subsidiary it's transacting with — not just the counterparty. If only the counterparty subsidiary is listed, NetSuite will reject the entity on an intercompany journal line even though it looks correctly configured.
  • To generate entities: Setup > Company > Subsidiaries > Generate Representing Entities button.

5. Intercompany Framework

Where: Setup > Company > Enable Features > Accounting tab

Only relevant if you need Intercompany Cross Charge or Intercompany Netting. Requires #3 (Automated Intercompany Management) to already be enabled.

  • Intercompany Cross Charge — useful for cross-subsidiary operations; automatically books intercompany payables/receivables when those specific operations occur (e.g., one subsidiary fulfilling inventory on behalf of another).
  • Intercompany Netting— settles open intercompany balances by netting receivables and payables against each other. Benefits:
    • Less manual reconciliation, revaluation, and elimination effort
    • Reduced FX exposure
    • Less time spent on payment processing and bank reconciliation
    • Fewer international payment fees
    • A simpler period-close process

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