The Client was having multiple subsidiaries and had a Multi-subsidiary accounting model in operation, Wherein the Client created a Group Account called “Intercompany Account” in Balance Sheet with Sub accounts in the name of each subsidiary to be used for posting intercompany transactions. The NetSuite was in operation at the Client’s place for less than a year.
There were multiple intercompany accounts for each one of the subsidiaries. Some of which were legacy accounts. The balance was showing the opening Intercompany balance of the time when balances were transferred from the legacy system to NetSuite.
While recording transactions, legacy, and regular accounts were used erroneously to post the transactions. Additionally, in many cases incorrect subsidiary was used to post the transactions. As a result of this, the intercompany accounts were a total mess
As we identified in the first instance that there are differences due to two major reasons:-
1. Forex rate differences
2. Incorrect accounting (using incorrect subsidiary while posting the transaction)
In order to correct the forex difference, we created a working to verify if the rates used to post the transaction are correct and did the correction wherever required. Secondly, we identified the transaction with incorrect posting and drafted one consolidated working on monthly basis followed by posting one correction entry for every month to match the intercompany accounts.