NetLoan - Elimination Intercompany Loan Setup

Intercompany Loans have the option to have two mirrored journals post or a single Advanced Intercompany Journal.

This article focuses on the second - the unique processes for the eliminating advanced intercompany journals for loans.

Setup 

1. Navigate to NetLoan > NetLoan Setup > System Setup. Make sure that a selection is made that shows "Intercompany" in the "Module Use" field and check the box for "Auto Eliminate Intercompany Transactions". 

2. Set up Intercompany Vendors and Customers. A vendor (lender) and customer (borrower) need to be created for every unique set of subsidiaries. 

  • Vendor(select as Lender on the loan):
    • Represents Subsidiary =lending subsidiary on loan record
    • Primary Subsidiary = Parent Subsidiary
    • Subsidiary List = All subsidiaries besides the lending subsidiary should be listed here
  • Customer (select as Borrower on the loan):
    • Represents Subsidiary = borrowing subsidiary
    • Primary Subsidiary = Parent Subsidiary
    • Subsidiary List = All subsidiaries besides the borrowing subsidiary should be listed here
  • Netsuite has the option to generate representing entities (i.e. a representing Vendor and representing Customer) for all subsidiaries. This is done by navigating to Setup > Company > Subsidiaries > Click Generate Representing Entities.

3. Set up elimination-type GL accounts. Any GL account used for these eliminating intercompany loans should be marked as "eliminating" on the account record. Navigate to Lists > Accounting > Accounts. Edit existing accounts (if only used for intercompany transactions) or create new accounts. Check the "Eliminate Intercompany Transactions" button on all GL accounts used for these intercompany transactions. 

4. Navigate to NetLoan > NetLoan Setup > Manage Loan Types > New. Create a new Loan Type for eliminating intercompany loans. A different type is needed so the elimination GL accounts can be mapped for this specific type of loan. If an intercompany loan type already exists, simply edit the type to change the GL accounts to the new eliminating versions. See the example below.  For more information on creating a loan type, see the Loan Type Configuration article.

Creating the Loan

Once the system setup is complete, you can now create an auto-eliminating intercompany loan. 

Navigate to NetLoan > Loan Management > New Loan. Select the Loan Type as the Intercompany Eliminating type pre-setup. For the Subsidiary, select the Subsidiary of the Lender of the loan. For the Intercompany Borrowing Subsidiary, select the Subsidiary of the Borrower of the loan. The Lender should be the Representing Vendor for the Subsidiary chosen. The Borrower should be the Representing Customer of the Intercompany Borrowing Subsidiary chosen. 

Set up the rest of the loan as normal. See the Create a New Loan Record for more details. 

Running Journals

You will run journals the same way as normal. The intercompany loans will run an advanced intercompany journal like the one below. Note the benefits of the advanced intercompany journal is that the intercompany vendors and customers will be auto-populated, the currencies will be accounted for via NetSuite's native exchange rate functionalities and lists, and the journals will auto-eliminate per NetSuite's native functionality. This means that on a consolidated subsidiary-level, there will automatically be a net 0 balance for the intercompany payable/receivable.


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