Financial

In this video we cover transactions that are unique to an accounting department. We start by covering Journal Entries, including reversing JEs and Intercompany JEs incase you are using a OneWorld account. We then cover budgets, including creating multiple budgets, how to create them manually using the budget worksheet, how to import them with the import wizard, and where to find the budget template. Next, we go over allocation schedules, including when you would use them, creating them, and setting the source, destination and distributions for the allocations. We then move on to cover currency revaluation which is applicable if you use multiple currencies, and memorized transactions which help you automate some manual transaction processes. We round out the lesson with a look at the audit trail, how to access it, and why you might use it.

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Transcript

When most folks think of transactions they think of financial ones. While all the transactions we have covered in this chapter have a financial impact, there are a few special ones that are generally reserved for an accounting department, and we will cover those in this video. The first transaction we’ll take a look at is the journal entry, sometimes called general journal entries or adjusting journal entries. Journal entries are just what they sound like, an entry that you place in your general journal for any number of reasons. And, they should be all too familiar to any accountants out there. You can create a new journal entry by going to Transactions, then Financial, and clicking Make Journal Entries. In the menu, you might have noticed that there were also options for Intercompany, and Advanced Intercompany entries. We will come back to those in a moment, but what we are looking at right now is a basic JE. Because we are working in OneWorld, which supports multiple subsidiaries. And, because each subsidiary maintains its own general ledger, we have to select a subsidiary first. Now that we have the subsidiary selected, we can select the accounts we wish to adjust, down here. So, I could for example, debit Accounts Receivable by $10. To make this balanced I would also want to credit another account, let’s pick sales in this case, and I will create a $10 credit. This could be an example of a customer purchasing a product on credit or another promise to pay method. Truthfully, you wouldn’t really do this as a journal entry in NetSuite, there are transactions better suited for this, but this is just a simple example. I can add memos at the line item, and I can add a memo at the header level up here. I strongly recommend requiring a memo for all JE’s, since they are very generic transactions. You can make the memo fields mandatory through the use of custom forms. Without a memo, you will inevitably encounter issues later of not being able to track why an entry was made. If this is only a temporary journal entry, or needs to be reversed at some point in the future, there is the ability to do that here with the reversal date. Under actions, you also have the option to memorize this transaction, though you will want to save it first, and come back into edit mode before you memorize it. I’ll go ahead and click Save to save this entry. For me, with the way I have my NetSuite instance setup, this is already approved. You can however, create an approval process around these transactions if that is something you need. In our menu earlier, we saw that there were also intercompany, and advanced intercompany entries. If you are not using OneWorld, you won’t see these options because they are specific to having multiple subsidiaries. Let’s take a look at the Intercompany entry by clicking on it here. One of the big differences we notice is that this has, not only a Subsidiary selection, but also a, To Subsidiary selection. The subsidiary selection here on the left can be thought of as, from subsidiary. This intercompany form is used to create JEs that go between two subsidiaries, moving funds between subsidiaries is an example of this. Using this form, you would create both sides of the transaction between two subs. The advanced intercompany entries are designed as a way to perform more complex intercompany entries that involve more than two subs. Similar to the standard JE, all of these can also be memorized. Budgets in NetSuite are how you measure how well your business is performing, compared to what was expected. You can get to them under Transactions, Financial and Set Up Budgets. Clicking here provides you with a form to enter a new budget, whereas clicking on list will list all the budgets you have already created. Let’s select to create a new budget. I will go ahead and go through this here in NetSuite’s interface, because you should understand it, however it is far more common for budgets to be imported from a spreadsheet in CSV format. There is even a budget template you can download. We’ll take a brief look at that in a moment. Here in our budget window we can select the subsidiary, and the year the budget is for. You can create more than one budget for any given subsidiary and time period as well. This means that you can have a worst, most likely, and best-case scenario for example. You can also use the Class, Department and Location fields to segment this budget. This works in tandem with how NetSuite segments accounts. Once you have your header information set correctly, you can start entering the financial information below. There isn’t a lot in the way of automation for this, but you can enter an amount in the first column, that you want to either be filled into the other columns, or distributed to the other columns. For example, maybe I know our Sales should be a million dollars this year. I can fill that in for January, click the apply checkbox, and then click distribute. The amount has now been evenly distributed between each month. Let’s say that for purchases I know that each month the budget will be a thousand dollars, and I know for service in January the amount will be three hundred. Since I am going to want to populate all the Purchase amounts I will check the apply check box, then I will fill those amounts in. Keep in mind that I am not checking the apply checkbox for service purchases. I also need to uncheck the checkbox next to Sales here at the top, otherwise that would be recalculated. Now I can click Fill, and the rest of the fields are filled in. You might have noticed that the Service fields here were not filled in though. This is because the apply check box was not checked. I’ll go ahead and save this worksheet, and my budgets are now created. So even in NetSuite this does not take too long. Many accountants and managers, prefer to import budgets rather than enter them into NetSuite, and NetSuite easily supports this functionality. Importing budgets is done under Transactions, Financial, Set Up Budgets, and Import. Here we can select a file to import as a budget, or download the template that would be used to create a budget. Let's download the template by clicking here, and take a look. You could fill out this sheet, save it, and import it. This is handy if you already have many budgets setup in another piece of software, most likely as a spreadsheet, so you can copy and paste that information here. I am going to go ahead and close this and go back to NetSuite. After you have incurred an expense you may want to allocate that expense across parts of your business, through departments or locations for example. A common use of allocation schedules is for rent. You may pay a single rent bill, but that really should be allocated between all the departments using that building. This is where allocation schedules come in, and they can be found under Transactions, Financial and Allocation Schedules. There are also options for intercompany, and batches, but we will not cover those here. Basically, intercompany are allocations between subsidiaries, and batches are a way to automate allocation creation. Here in the Allocation Schedule we start by giving our allocation schedule a name, something like, Rent Expenses. We can select the subsidiary this is for. We can select the frequency we want this allocation to be run, End of Period is fine for our demonstration purposes. And we can select the next date this should be run. Depending on what was selected in the frequency box, you may or may not need this next date. In my example, I chose the end of period. The end of period already has a definitive date associated with it. The last day of the month in my case. If you chose something like monthly or annually, you would need to select a date. You can also select if you want this allocation to continue forever, or if there are only a set number of allocations left; I’ll leave mine as Remind Forever. If at any point you need to suspend an allocation, you can always come back to it and select the Inactive checkbox. When you want to reactivate, just deselect that checkbox. This is also useful if you will no longer use the allocation schedule, but want to keep it around. In the source and destination tabs you can select where the allocation is coming from, and where it is going to. In the source tab, you can also select if there is an offset account that you will associate with this allocation. The sub-header, in the source subtab, is where you would select an offset account if there was one, and any information about it. The lines on the source subtab are where you would set the source account or accounts; that is, what was being allocated. We’ll go ahead and choose account 6200, which is our rent expense account. We could further segment this if we wanted to, but I’ll just click add for now. We could add multiple lines, but I am just going to create this single allocation. In the destination subtab, we can choose where we will allocate this to. I’ll go ahead and select our, 1300 Prepaid Expenses, account. From here I can select the person, department, location or class this should be allocated to. I can also select a combination of these fields as well. Let’s pick Engineering for this, under department. What I want to do with this is to allocate 25% of our rent expense to Engineering, so I’ll first click the Values Are Percentages checkbox, then I will enter 25 in the weight field. Now that I am done with this I will click Add for the line. I’ll add another line with the same data, except that I will assign the remaining 75% of my rent expense to marketing. I have to have the expense total up, or I will get errors. Now I can save my allocation schedule, and it will run at my next end of period. If you deal with multiple currencies, you are probably more than aware that their value fluctuates in relation to your base currency. In order to handle these fluctuations, you can revalue your currencies. This is done under Transactions, Financial, and Revalue Open Currency Balances. Here you can see the last time the currency revaluation was run, and its results. If I change my subsidiary, we can see that I have a few accounts I have run the currency revaluation on. If you want to rerun currency revaluation, you can do that by selecting the accounts you want to run it on, and clicking Save. This will begin the revaluation process, and you are dropped at a screen showing the status of the operation. This screen does not refresh by itself, so you will need to use either the Refresh button here, or your browser’s refresh. The last financial transaction type we will talk about are memorized transactions. We saw these briefly when we were talking about journal entries, and basically a memorized transaction is just a recurring transaction. So, if you have a company you bill every month, you might have the system memorize that. Most transactions have the ability to be memorized, and this is usually found under the actions menu. So, for example if I go to a new Sales Order, which is a transaction we looked at in an earlier video, we can see that under the actions menu, I have the option to Memorize this. Memorizing works best for transactions that have already been saved. That is to say, generally you will want to save a transaction first, then come back and memorize it. Once you have memorized transactions setup, you can manage them by going to Transactions, Management, Enter Memorized Transactions and clicking List. This will give you a list of all the memorized transactions you have, and from here you can edit them, cancel them, or perform any other necessary actions. There is one last feature of NetSuite that we have not really taken a look at thus far, and while it is not strictly financial, if falls best into this category. That is the Audit Trail. If we go to Transaction, Management and click View Audit Trail, we can set filters, and submit a request to look at the audit trail of any number of things in NetSuite. So, if I want to see what Alex Wolfe has been up to, I would select his name here under Users. To narrow this down I will also select a date range here of April 1st to May 31st of this year. Once I click Submit, I can see what Alex has been doing. I could have also narrowed this down a bit, but in my case I already knew there was not a lot of data here. You can look through this log if you are ever worried about what might be going on inside your NetSuite instance. This rounds out our look at transactions in NetSuite, both for this video and for this chapter. The truth is, this was a high-level look, and it is difficult to get a good look at everything in about an hour. This should at least provide a solid footing on which to continue your exploration of transactions in the system.
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