Intercompany balances when moving from QuickBooks to NetSuite

What changes when separate QuickBooks companies become subsidiaries in NetSuite OneWorld, and how to bring the balances between them over clean.

This is part of our guide to Moving from QuickBooks to NetSuite.

From separate files to subsidiaries

A lot of companies moving off QuickBooks run more than one entity, usually as separate QuickBooks files with due to and due from accounts between them. In NetSuite OneWorld those entities become subsidiaries under one account, and those balances become intercompany.

Tie the pairs before anything comes over. What one company shows as due to the other should match exactly what the other shows as due from, as of the cutover date. They almost never match on the first try. Timing, a payment one side booked and the other didn’t, or an expense coded to the wrong entity are the usual reasons. Fix it in QuickBooks, since the history that explains it is there.

If you’re loading monthly history, pull the intercompany activity out of the summary JEs and book it as intercompany JEs against the intercompany customers and vendors. Otherwise it lands on the balance sheet with no entity behind it and the subsidiaries won’t net.

Don’t assume the intercompany schedule somebody hands you is right, either. Tie it to the GL in every entity before you use it. Watch for related companies that aren’t coming into NetSuite as subsidiaries. A balance due from a company that isn’t in NetSuite can’t be intercompany, so that company gets set up as a regular customer or vendor instead, with its own AR or AP account. Decide which entities are in and which are out before you start scheduling balances, or you’ll end up with a chunk you can’t place. And when the pairs are off by a few cents from rounding, just book a small JE to clear it rather than chasing it.

Map each side to an intercompany account in NetSuite and make sure it’s marked to eliminate. Then load the open balances the same way as AR and AP, as open items against the intercompany customer or vendor in each subsidiary, with the offset to an intercompany clearing account. The opening balance JE clears that account, so it nets to zero and the intercompany balances show up item by item instead of as one lump. On the consolidated trial balance they net to zero from day one. After go-live, new intercompany activity goes through intercompany JEs or intercompany customers and vendors, so NetSuite keeps both sides in step.

Want to talk?

If you’re bringing more than one company into NetSuite and the due to and due from balances won’t agree, send us what you’ve got. We’ll help you sort out which entities come in and how the balances get there. Book a free hour.

Author: Renee Chandler, Fourth Wave Consulting. NetSuite accounting and finance.