NetSuite ERP is big on simplifying complex business processes, and financials are no exception.
If managing your organization’s financial reporting across multiple business units, subsidiaries, and regions is a constant challenge, NetSuite’s financial consolidation is your holy grail for aggregating this data in one central place.
Here’s a look at NetSuite’s financial consolidation features and how they work to streamline your financial reporting.
How it Works:
- NetSuite provides a unified platform for combining financial data, optimizing reporting, and providing real-time visibility.
- It offers multi-currency support with 190+ currencies, currency conversion, revaluation & translation to address compliance and tax challenges.
- Automated intercompany accounting streamlines reconciliation processes, while consolidated intercompany balances enable accurate financial reporting.
- It all sums up to saved time and money, streamlined reporting, and built-in assurance of regulatory compliance.
NetSuite Financial Consolidation, Explained
Financial consolidation combines financial data from various subsidiaries or entities within an organization, aggregates the data, and summarizes it for financial report purposes.
It’s a delicate process, requiring a balance between accuracy, timeliness, and compliance with parent-subsidiary regulations.
NetSuite’s financial consolidation features exist to take the headache out of these complex processes. They ultimately simplify combining financial data from multiple business units by providing a unified platform for businesses to manage their financial data and comply with tax codes.
The result is accurate and complete financial statements, allowing businesses to make informed decisions based on real-time visibility into their financial performance.
Key Features of NetSuite Financial Consolidation
Several features that supercharge financial analysis are at the core of NetSuite’s financial consolidation.
With NetSuite, you can rely on:
- Real-time data consolidation, enabling prompt and precise consolidation of financial data from multiple subsidiaries.
- Real-time currency conversion, allowing efficient conversion of financial data from multiple accounts and currencies.
- Support for multiple accounting standards.
- Automated intercompany accounting in a subsidiary context.
- Cumulative Translation Adjustment (CTA) functionality enabling users to accurately monitor and report currency translation adjustments in their business systems.
NetSuite’s financial consolidation works within two modules to further enhance reporting: NetSuite One World and NetSuite Multi-Book Accounting.
NetSuite Bank Account Reconciliation
NetSuite automated bank account reconciliation allows users to match bank statements in bulk with the transactions recorded in their NetSuite accounts. The goal is to ensure that the transactions listed in both places match and to identify any discrepancies that need to be addressed.
You can add complex rules to automatically match transactions from bank accounts, credit cards, intercompany charges, AR, and other accounts. Accountants can easily drill down to match and reconcile when needed.
The bank reconciliation process is essential for maintaining accurate financial records and catching errors, such as double entries, missed transactions, or unauthorized activity. It also helps you monitor cash flow and stay in compliance with accounting standards and regulations.
NetSuite OneWorld is a suite of features within the NetSuite ERP system specifically designed for multinational companies with multiple subsidiaries or business units operating in different countries. It provides tools and capabilities to manage various aspects of global operations, including financial management, compliance, localization, and more.
NetSuite Multi-Book Accounting
NetSuite Multi-Book Accounting is a module that enables organizations to maintain multiple sets of accounting records within a single group of financial transactions. This innovative feature allows businesses to:
- Effectively manage their financial data
- Gain insights into their financial performance
- Maintain multiple sets of books with distinct accounting treatments for reporting purposes
The use of NetSuite MultiBook Accounting and its financial consolidation features enables organizations to manage and report financial data according to various accounting standards while still achieving accurate and compliant consolidated financial reporting.
This tool is particularly beneficial for multinational companies with complex financial reporting requirements.
Benefits of NetSuite Financial Consolidation
NetSuite’s financial consolidation capabilities benefit your business by providing the following:
- Centralized financial data management
- Enhanced data insights
- Accelerated close processes
- Regulatory compliance
- Real-time reporting and analysis
Here’s how these perks work to consolidate data and streamline reporting.
Centralized Financial Data Management
Centralized financial data management involves consolidating financial data from multiple sources into a single, centralized system. This enhances data security and provides more comprehensive financial reporting and greater control over data access and interaction.
By managing multi-entity operations on a single platform, businesses can:
- Increase efficiency
- Minimize mistakes
- Reduce manual data entry
- Improve accuracy
- Ensure access to reliable financial data for decision-making
Enhanced Data Insights
NetSuite provides businesses with a single source of truth for their financial data, enabling them to quickly and accurately analyze their financial performance across all subsidiaries.
And with NetSuite OneWorld and Multi-Book Accounting, your business can manage multiple currencies and accounting standards, resulting in an enhanced and accurate financial performance analysis across all subsidiaries regardless of currency or accounting standard.
Accelerate Close Process
The close process is a critical aspect of financial management, ensuring that a company’s financial position is accurately represented in financial reports. NetSuite expedites close processes by automating data entry and reporting, minimizing manual effort, and mitigating errors.
NetSuite guarantees regulatory compliance through its support for numerous accounting standards and tax codes, ensuring accurate financial reporting.
Its consolidation capabilities allow users to adhere to regulations such as Sarbanes-Oxley and IFRS, ensuring compliance with applicable regulations. By supporting multiple accounting standards and tax codes, businesses can confidently navigate the complex landscape of financial regulations and maintain accurate financial reporting.
Real-Time Reporting and Analysis
NetSuite offers users the ability to quickly and accurately analyze their financial data, enabling them to make informed decisions in a timely manner.
Addressing Compliance and Tax Challenges
Of course, there’s more to financial reporting than simply generating the data. Tax and regulatory compliance are major pieces of the reporting puzzle that can feel like a constant source of friction.
Successfully navigating the challenges of compliance and tax requirements requires a powerful and robust system. With its multi-currency support and adaptable accounting standards, NetSuite helps businesses overcome these challenges.
Multi-currency support refers to the capability of a system or platform to process transactions and display prices in various currencies, allowing customers to pay in their preferred currency.
With NetSuite’s multi-currency support, businesses can manage tax requirements across subsidiaries and 190+ currencies with historical conversion rates.
In addition to supporting a wide range of currencies, NetSuite also offers the following features for managing multi-currency transactions:
- Currency conversion
- Exchange rate updates
These comprehensive multi-currency features help businesses manage their financial data effectively and ensure compliance with local and international tax regulations.
Adaptable Accounting Standards
Adaptable accounting standards provide flexibility in financial reporting and allow companies to:
- Apply accounting principles that are most suitable and applicable for their industry, size, and business model
- Maintain multiple sets of books with varied accounting treatments
- Ensure compliance with local and global regulations
Enhancing Intercompany Transactions
Intercompany transactions are financial transactions between different entities of the same parent company. NetSuite offers powerful features to enhance intercompany transactions, including automated intercompany accounting and consolidated intercompany balances.
Automated Intercompany Accounting
Automated intercompany accounting utilizes software or solutions to facilitate and automate the monitoring, settling, eliminating, and verifying intercompany transactions between entities. NetSuite offers automated intercompany accounting, simplifying reconciliation processes and linking purchase and sales orders as intercompany transactions.
Automating intercompany accounting allows businesses to streamline their financial processes and focus on strategic decision-making and growth. This powerful feature simplifies reconciliation and ensures that intercompany transactions are accurately accounted for, resulting in precise consolidated financial statements.
Consolidated Intercompany Balances
Consolidated intercompany balances refer to the financial transactions and balances between entities within a group that are offset or eliminated during consolidation.
NetSuite supports this by enabling accounting managers to:
- Combine mutual subsidiary balances
- Streamline the financial consolidation process
- Ensure that the consolidated financial statements accurately represent the business's financial position.
Power Up Financial Reporting with NetSuite
NetSuite offers a powerful solution for businesses to streamline their financial consolidation process, gain real-time insights into their financial performance, and ensure compliance with local and global regulations.
With a robust suite of features, NetSuite ensures your finances are in order so you can direct your time and energy to keep business operations running smoothly.
You can also level up your sales tax automation in NetSuite with our partner, Avalara, to take financial control to a whole new level.
Give us a call to speak directly with an industry expert about NetSuite’s financial consolidation features and how they can bring you and your business peace of mind.