NetSuite Multibook Accounting is a perfect example of yet another advanced accounting feature pushing NetSuite ahead of it’s competitors.
Multibook allows businesses to manage multiple sets of accounting books with ease. It is designed to cater to the accounting needs of companies that operate in multiple countries or fiscal jurisdictions, have multiple subsidiaries, or require separate books for regulatory compliance.
With NetSuite Multibook, businesses can maintain different sets of financial statements, operating and reporting currencies, revenue recognition rules and much more in a single NetSuite instance. This ensures accurate and compliant financial reporting across different regions and entities, and eliminates dreaded Excel conversions.
Multibook accounting is becoming increasingly important for businesses with complex accounting requirements. With the rise of global operations and increasingly complex regulations, companies need a way to manage their financial data effectively whilst keeping everything within that one source of truth – NetSuite.
NetSuite Multibook provides an all-in-one solution to these challenges, helping businesses streamline their accounting processes, reduce errors, and improve financial visibility.
What is Multibook Accounting
Multibook Accounting is the process of keeping more than one set of financial records. Books can be used for the same or different currencies, individual amortization and revenue recognition preferences and book specific postings.
The NetSuite Multibook Accounting feature automates the posting to multiple books and also allows the user to select a single book on certain transaction types. Using this feature eliminates the need to manually convert your primary books in to another standard, currency or format using an external system.
There are various reasons why you might need to do this but it would normally be dictated by conflicting jurisdictional requirements. For example, a business may need to submit financials to two authorities that require adherence to different standards.
There is a full list of use cases for Multibook Accounting in the section below, Use Cases for Multibook Accounting.
Implementing NetSuite Multibook Accounting
|The NetSuite Multibook Accounting feature needs to be set up by a certified professional. The steps below outline the end user’s actions. The actual implementation will not be detailed here as you will need to contact NetSuite Professional Services or a multibook certified NetSuite partner.
Multibook Accounting itself does not carry a cost. It does, however, require a OneWorld account and sufficient availability for any new currencies you wish to introduce.
Regardless of whether your current system cost covers the above, your first move should always be to contact a multibook certified NetSuite partner. Alternatively you can contact NetSuite professional services if you wish to use them for the implementation.
Considerations during the Implementation of Multibook Accounting
If you are a new NetSuite customer and you are looking at Multibook as part of your initial implementation, then there is much less to have to consider. You need to think about the desired breadth of your multibook solution though.
- Do you need a secondary book for one or all entities?
- Do you need a different currency for your secondary book?
- Will you be recording depreciation, amortization or revenue recognition differently in your secondary book?
- Do you want to map parts of your chart of accounts differently?
Some of these decisions can only be made at the point of implementing so it is important to ensure this has been thoroughly thought through before you begin that process.
If your business is already using NetSuite you will have a host more decisions to make.
- From what date do you want your secondary book to be active?
- How far back do you want to populate your secondary book?
The answers to these questions will drive the Historical Transaction Processing (HTP) process.
HTP is a long, complicated and necessary part of most NetSuite Multibook implementations. It is during this process that the implementation consultant will run through a number of steps to populate your secondary book with historical data from your primary book.
These steps will include, for example,
- Bringing over open payables and receivables.
- Revaluing open foreign currency balances.
- Processing transactions for intercompany elimination.
- Copying statistical journals.
Use Cases for Multibook Accounting
Multibook accounting is not the right solution for every business. You definitely do not want to go through the hassle of implementing it and adding new accounting considerations and reporting needs unless it is the right approach to solve your problem.
The following is a list of accepted use cases for the NetSuite Multibook Accounting solution. If you have one or more of these needs then it is best to reach out to a certified partner and start discussing an implementation.
- A need to recognize revenue using different schedules across multiple books.
- A need to amortize expenses using different schedules across multiple books.
- A need to depreciate assets differently across multiple books (this is a need for posting depreciation. Tax depreciation is already covered as a non posting solution in the Fixed Asset Management module).
- A need to keep books in multiple base currencies.
- A need to post accounting transactions to different accounts in different books.
- A need to open and close accounting periods at different times across different books.
What is an Adjustment Only Book
If you only require book specific adjustments to be posted then there is a simpler solution called an Adjustment Only book.
The Adjustment Only book does not require the meticulous implementation required for the NetSuite Multibook solution. Any administrator that has access can enable this future.
The main difference between this and the full multibook solution is that adjustment only books do not duplicate the primary book’s data. Only the book specific journals are posted there. The two books are then viewed together to see the effect of the book specific adjustments.
With adjustment only books businesses do not need to operate with multiple books. All the day to day operations and processes post to the primary book. It is only at month end, if book specific adjustments need to be made, that transactions are posted to the adjustment only book.
How to Use the NetSuite Multibook Accounting Feature
Most businesses are not going to be benefiting from all the features listed in my Use Cases for Multibook Accounting section. If only two or three of these needs are applicable, then the day to day running of multiple books should not be too impactful.
Let’s take a look at some of the key areas of operating with more than one accounting book.
Book Specific and Book Generic posting
Most transactions will post directly to both (all) accounting books. After saving a transaction you can view the GL Impact and toggle the accounting book from the dropdown at the top right. There you will see the debits and credits to your Primary Book as well as any Secondary Books.
Some transactions are, what is referred to as, book specific. These are transactions that only post to one of your accounting books.
You have book specific journals, for example, which are a separate journal type that can be selected from the Transactions menu.
There are other transactions, such as currency revaluations that are always book specific plus certain tasks in the period close checklist.
If you are using Advanced Revenue Recognition, the NetSuite Multibook Accounting solution will allow you to recognize revenue differently across your books.
Items can be configured to have revenue recognition rules applied to specific accounting books. After saving a transaction, a user can update revenue arrangements and adjust the treatment for individual books.
Revenue Recognition Journal Entries and Reclassification Journal Entries are always book specific.
Amortization is treated in much the same way as revenue recognition when combined with Multibook.
The Primary Book amortization schedule is selected on the face of the transaction, then after saving, a user can update amortization schedules to configure the secondary books.
Businesses can, of course, choose to amortize in one book and not amortize at all in another, if they wish.
Fixed Asset Depreciation
NetSuite Multibook gives users of the Fixed Asset Management module the ability to depreciate assets differently across books.
The Fixed Asset Management module already allows alternative depreciation to record non-posting entries for needs such as tax depreciation. Multibook allows you to use this same system but create posting transactions in secondary books.
Foreign Currency Management
As we have mentioned already, a crucial benefit of the Multibook solution is that it allows businesses to keep books in more than one currency.
When a book generic transaction is saved, the exchange rate on the face of the transaction is for the Primary Book. Under the Accounting Books tab there is an exchange rate to convert the transaction to any secondary books.
The above features are just a taste of what the NetSuite Multibook solution offers. There are countless other features and benefits that you can discuss with an implementation partner.
Hopefully this article gives a you a flavor of what can be achieved and helps you understand if this a solution that will benefit your organization.
If you have any further questions about NetSuite Multibook I am more than happy to answer your questions – reach out to me via the contact page. If you are ready to begin discussing an implementation then you need to speak to a Multibook certified partner.
|If you a user of NetSuite working in an accounting or finance role, why not take a look at the NetSuite Financial User certification?