Multi-Book Accounting

The globalisation of business continues to be driven by several factors, including the growing presence of multinational corporations, global capital markets, foreign direct investment and economic interdependence. At the same time, investors, bankers, shareholders, customers and other financial statements users exist all over the world, specifically in countries that have their own unique sets of accounting standards.

Whenever the same business event requires different accounting treatment because of industry-specific rules, country-specific rules or both, different reporting outcomes will occur. To report financial results within compliance based on multiple accounting standards concurrently, accounting departments can now leverage Multi-Book to comply with any standard.

Multi-Book Accounting benefits

The Multi-Book Accounting feature provides the ability to maintain multiple sets of accounting records based on a single set of real-time financial transactions. This enables businesses to support different managerial and regulatory compliance needs, such as:

Deliver different financial reports to serve different purposes

A company that maintains its primary accounting records according to United States Generally Accepted Accounting Principles (U.S. GAAP), for example, can add accounting books to generate different versions of financial reports and statements that are mandated by local governments or industry regulations.

Provide detailed transaction-based reports for each accounting book

Transaction-level reports can be generated for individual accounting books to satisfy managerial reporting requirements and provide detailed transaction level audit trail to book specific financial statements. Saved searches and KPIs also support display by accounting book.

Automate posting to multiple accounting books according to pre-defined accounting rules

Different revenue recognition and expense amortization rules can be created for different accounting books.

Adjust financial results on a per-book basis

Manual journal entries, including intercompany journal entries, can be posted for individual accounting books.

Ensure data integrity across multiple accounting books

The system automatically maintains data synchronization for parallel transactions in different accounting books to ensure data integrity.

Enable customization to leverage the Multi-Book Accounting context

SuiteApps and customization can be implemented to yield book specific financial results.

The Multi-Book Accounting feature includes options for chart of account mapping, foreign currency management, and revenue and expense management to address these needs.

Period Close by Accounting Book for Multi-book accounting

With NetSuite 2015.2 accounting periods associated with any accounting book can be individually closed and reopened, without impacting your other accounting books. However, if required all books can be closed at the same time.

Automated accounting rule-driven engine.

Multi-Book eliminates data entry replication and reduces the need for error-prone manual adjustments from processes due to managing multiple books per accounting standard. Using a powerful rule-driven engine, accounting departments can now create business transactions and automatically post the activity to all books efficiently in accordance with the appropriate accounting standard. With prebuilt mapping capabilities between your primary and secondary chart of accounts, Multi-Book can record all book-specific activity based on a single business transaction for the general ledger, revenue recognition, expense amortization, depreciation, P&L allocations and more.

Foreign currency management.

Multi-Book enables accounting departments to record transactions using book-specific functional currencies. Based on exchange rates stored in the system, Multi-Book can automatically calculate the general ledger impact for all books, including the realized and unrealized foreign currency gain/loss amounts per transaction.

Real-time financial reporting and analysis per book.

Leveraging an automated rule-driven engine, Multi-Book provides real-time visibility to see accurate “flash” financials for any book—standard financial reports, VAT/GST reports, saved searches and more. It allows organisations to run financial operations and manage multiple sets of financial books efficiently and issue financial statements in accordance with whichever accounting standards are required.

Terminology

Multi-book accounting introduces some new terms to the NetSuite vocabulary.

Primary book

The accounting book record as it is before you enable the Multi-Book Accounting feature. When you enable multi-book accounting, the primary book becomes visible as separate from other accounting books. It is automatically configured and activated. The primary book is the daily operational book where your business transactions are recorded and viewed.

Secondary books

Any accounting books that are not the primary book. Secondary accounting books may have one or more of these differences from the primary book: different subsidiary base currency, posting to different accounts for the same transaction, and different accounting rules.

Book generic

Records that are created and shared across all books. Examples of book generic records are entity records and CRM records. Other book generic records may also have book specific attributes. Examples of book generic records with book specific attributes are items, sales orders, sales invoices, and vendor bills.

Book specific

Records that are created for only one book. Book specific records include the following:

  • Book specific journal entries and intercompany journal entries
  • Revenue commitment and reclassification journal entries
  • Revenue and expense allocation
  • Revenue recognition and expense amortization schedules
  • Fixed asset depreciation schedules and journal entries

Chart of accounts mapping

Permits different account values to be used for transactions in secondary accounting books from those used in the primary book, thus creating different account balances and usage for the secondary book. Unless chart of accounts mapping is configured, all accounting books use the same accounts for transactions.

General Architecture

The Multi-Book Accounting feature provides two distinct but complementary methods to generate secondary book financial results:

  • Manual adjustments using book specific journal entries. The diagram below illustrates this.

GeneralArch_ManualAdjustments1

  • Accounting rules to automate the financial results of shared business transactions. The optional additional features Chart of Accounts Mapping, Foreign Currency Management, and Revenue and Expense Management enable the automated accounting rules. The diagram below illustrates automated usage.

GeneralArch_AccountingRules 2