NetSuite Multi-Book Accounting: A Guide for Growing Businesses

Matt brown

NetSuite Multi-Book Accounting

As a business expands into new markets or adopts new accounting standards, tracking finances across multiple sets of books becomes crucial. NetSuite’s multi-book accounting feature allows growing companies to easily manage separate accounting books for different business needs.  

In this comprehensive guide, we’ll explore how multi-book accounting works in NetSuite and why it’s valuable for scaling businesses.

What is Multi-Book Accounting? 

Multi-book accounting refers to the practice of maintaining two or more separate sets of accounts to track finances differently for specific purposes. Reasons companies may use this approach include:

  • Complying with tax regulations in multiple countries
  • Managing a parent company with several subsidiaries 
  • Tracking finances by business unit or product line
  • Adopting new accounting standards before fully transitioning 

By keeping multiple books, businesses can record transactions once while allocating them across different books according to each book’s chart of accounts and accounting methods.

For instance, a US-based business expanding into the UK may set up two books: one for US GAAP standards and one for UK GAAP standards. When the company purchases inventory, that transaction can post to both books simultaneously – no duplicate data entry required.

Key Capabilities of Multi-Book Accounting in NetSuite

NetSuite empowers businesses to set up an unlimited number of accounting books and manage them in one place. Let’s explore some of its core multi-book capabilities:

Configure Multiple Charts of Accounts

The chart of accounts acts as the foundation for any book since it defines the specific accounts used to categorize transactions. 

NetSuite allows custom separate charts for each active book. You can:

• Modify account names, numbers sequences, and segment structures

• Add, delete, or deactivate accounts

• Control the visibility of accounts across books

For example, your US book may include an account called Federal Tax Expense while your UK book shows Corporation Tax Expense account instead.

Automate Currency Conversion 

When managing finances internationally, converting transaction amounts from one currency to every applicable book’s home currency is essential.

With NetSuite multi-book accounting, currency conversion happens automatically based on the specified rate tables. This prevents errors that could occur from manual re-entry.

Allocate Transactions

To avoid time-consuming duplicate data entry, validated transactions can simultaneously post to all active books.  

The allocation process distributes the appropriate amounts, tax codes, etc. based on each book’s configurations. Editing allocation percentages or rules can be done at any time.

Unlimited Reporting

Financial reports are book-specific, drawing on the transactions and charts of accounts within each book individually. You can generate Income Statements, Balance Sheets, Trial Balances, and more for every book.

Comparing reports side-by-side provides visibility into variances and trends. Having comprehensive reporting streamlines audits and compliance for international operations.

Control User Permissions

As your accounting team grows, assigning permissions limits access to confidential financial data. 

Set up permissions for creating books, importing transactions, running reports, and more on a per-user or role basis. Custom roles with granular privileges keep sensitive information protected.

Integrations to Reduce Data Entry  

Entering the same transactions multiple times eats up hours that could be spent on value-added analysis.  

NetSuite integrates seamlessly with popular billing, POS, ecommerce, and payment tools. For example, transactions from Shopify sync directly into your configured books!

These capabilities make managing multiple sets of books frustration-free. Now let’s walk through some common business use cases.

Use Case 1: Complying with International Accounting Laws 

Expanding overseas comes with the territory of learning new accounting standards and tax practices. Rather than force-fitting financial data into one set of books, multi-book accounting meets local compliance needs.

Suppose ACME Corporation is headquartered in New York, NY with a subsidiary in London, UK. The US team tracks finances under US GAAP principles. 

As ACME Corporation sets up its UK business entity, they must legally report finances using UK GAAP – which differs from US rules in some key ways.

With NetSuite, ACME Corporation creates two books:

1. US Book using US GAAP

2. UK Book under UK GAAP principles 

When the UK team purchases a new office space, this single transaction simultaneously posts to both books:

– The US Book categorizes it as standard Occupancy Expense  

– The UK Book lists it as Property Costs

Even though naming conventions differ, multi-book accounting eliminates manually recording transactions twice while still meeting localized compliance duties.

Use Case 2: Monitoring Performance by Business Segment

Diversified businesses may contain several internal divisions that operate distinctly from one another. Visibility into profitability by segment is vital, but can get muddy when all financial activity posts to a single book.

Imagine DIGICOM has two key business units:

1. Website Design & Hosting Services

2. Custom Software Product Development

With disparate target buyers, development cycles, and revenue models, tracking these units separately uncovers performance insights that help fine-tune strategy, especially since Website Hosting has much higher overhead costs.

By activating multi-book accounting in NetSuite, DIGICOM sets up:

1. Services Book for all Website Hosting activity

2. Software Book for Custom Product transactions

Now DIGICOM can instantly generate a Profit and Loss Statement for Software operations without manually filtering out website hosting transactions each month. Having clear visibility to measure true net profit empowers data-backed decisions to nurture higher growth business units.

Transitioning New Acquisitions to Unified Books

Acquiring new companies brings an influx of financial activity from tools, processes, and accounting methods that differ from current operations. Before fully switching over, running multi-book helps ease the transition.

When marketing agency Prime Company acquires a small social media firm Social Gurus, Prime sets up books for:

1. Prime Transactions  

2. Social Gurus Transactions

The goal is to eventually merge all activity into Prime’s singular books. But in the short term, Social Gurus can continue using current account structures while Prime monitors ongoing profitability before and after acquisition costs.

Once Social Gurus transitions fully to Prime’s accounts, the legacy book can retire while all financials report through Prime for full visibility across the now larger firm. 

Reasons Growing Businesses Choose SuiteRep

While NetSuite touts advanced features like multi-book accounting, complex platforms still require an experienced implementation partner to configure software for long-term usability. SuiteRep goes beyond basic integrations to deliver transformational solutions so technology enables scale instead of hindering growth.

Here are key reasons fast-growing businesses choose SuiteRep for NetSuite implementations:

Accounting Expertise 

Our financial management team paired with NetSuite credentials bring out-of-box accounting functionality to life tailored specifically to complex business models.

Custom Development

We build unique applications on the SuiteCloud platform to bridge gaps between your envisioned processes and package limitations.

Focus on Client Success

Our consistent 98%+ client satisfaction score demonstrates our commitment to long-term relationships driving quantifiable business value. 

Global Capabilities 

With customers across 100+ countries, our global presence provides localized support no matter where business takes you.

Fast-Growing Businesses Trust SuiteRep and NetSuite

Combining NetSuite’s multi-book accounting foundations with SuiteRep’s proven success helping customers maximize platform value unlocks financial insights at every business phase – especially valuable for enterprises scaling globally.

We hope this guide provided useful education on how the inherent NetSuite capabilities for multi-book accounting can equip operations for growth both domestically and in international subsidiaries.

Does your business need customized global accounting processes? Reach out to SuiteRep today to start a conversation around achieving your growth initiatives, financial compliance, and decision-making goals with NetSuite’s flexible multi-book accounting and reporting.

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