The 10-Minute Guide to Reconciliation in NetSuite
Even after shifting from the manual reconciliation process to the NetSuite ERP, reconciling all transactions by hand before the month's close can be tedious.
But NetSuite, being one of the most robust accounting tools worldwide, has made it easier for accounting professionals to reduce time on data entry. The Intelligent Transaction Match capabilities translate into less time analyzing each bank line. Both Netsuite and user-created rules can speed up the initial reconciliation and overall payment process.
Still, sometimes you need to review transactions manually or generate reports.
In this guide, we’ll cover how to find and use NetSuite’s many account reconciliations so you can speed up your workflow.
Does NetSuite Have Reconciliation Tools?
As a robust ERP, NetSuite does allow accounting teams to reconcile both bank account and payment data. However, it’s not an automated process.
There are three general steps to follow when reconciling accounts:
- Importing bank data
- Match the bank data
- Reconciling the statement
Data can be added from a few different templates or linked to your financial institution, but the most common and easiest to use is CSV.
It’s possible to match account transactions with your bank data manually, but you’ll likely want to leverage NetSuite’s Intelligent Transaction Matching feature. There are default rules that Netsuite uses that cannot be altered, called Systemic Rules and flexible User Rules. These rules will automatically detect bank lines that meet the right criteria and match them.
You can see all automatically matched data by navigating to Transactions > Bank > Match Bank Data.
NetSuite’s Automated Reconciliation Rules
The NetSuite ERP has a number of rules that cannot be overwritten when it comes to automated reconciliation. In order of importance, NetSuite’s Intelligent Transaction Matching will:
- Identify transactions from the bank data with the same transaction number, such as a check number or ID, the amount, and the date as a charge or payment that has been created in the system.
- Match transactions with small discrepancies with leading zeros or prefixes so long as the date, amount, and IDs are generally the same.
However, this automation will only match transactions if the date of the imported transaction is 90 days or less.
Creating Your Own Reconciliation Rules
Through User Rules, you can create your own set of criteria for matching and reconciling invoices. To do so, just follow these steps:
- Navigate to Transactions > Bank > Reconciliation Rules.
- Select New Rule.
- Add a Rule Name, filter the Account, and specify Conditions.
- Some Conditions you can choose from are transaction type, the Primary Field the condition will apply to, the Operator, the Value Input, the Second Transaction type, and the Compare Field.
- You can add or remove extra conditions.
- Click Save when finished.
- If you have multiple rules, you can drag and drop each rule to determine the order.
However, if you are using NetSuite without any additional SuiteApps, you’ll likely be doing the bulk of reconciliation work manually. To get started, let’s look at how you can set up accounts for reconciliation and how to reconcile bank and credit card statements.
4 Steps to Setting Up Account Reconciliation
Before you can begin using bank account reconciliation, you need to set up your bank accounts in NetSuite. This is essential for you to create, edit, and complete reconciliations in the future.
Before adding matching and reconciling options to your account statements, ensure that you’ve submitted or cleared all pending transactions related to the account.
To set up reconciliations with your bank account:
- Go to the navigation bar and click Lists > Accounting > Accounts.
- Click the Edit link to the left of the account you want to modify. If you have not added an account, do so.
- Check the Use Match Bank Data and Reconcile Account Statement Pages box if it is not already checked.
- Click Save.
Sometimes, you may have started to reconcile a statement only to realize that matching is not enabled on the account. If you have an incomplete reconciliation, a box will appear. It will ask if you want all incomplete statements deleted or if you want to reconcile the statement.
What is NetSuite Bank Reconciliation?
Once your account reconciliation is set up, you can begin the reconciliation of bank statements, including deposits, credits, checks, and other payments. You can also delete reconciliations in case of an error and generate reports.
Entering a bank reconciliation
- Go to Transactions > Bank > Reconcile Bank Statement.
- Select the transactions you want to reconcile on the Deposits and Credits or Checks and Payments subtabs.
- Click the New Charges subtab.
- Fill in the information and click Add.
- Click the New Deposits subtab.
- Fill in the information for the new deposit transaction, and click Add.
- When you have finished, you can choose to Save & Print, Save, or Complete Later. You can only keep one reconciliation for later at any period. If you change the account of the reconciliation, the work on that file will be erased.
You must save transactions for them to be reconciled.
Deleting a Bank Account Reconciliation
Deleting a bank account reconciliation is more straightforward. Simply go to Transactions > Bank > Reconcile Bank Statement, enter the date of the statement, click the Actions menu, and select Delete. When you are asked to confirm the deletion, click Yes.
The same process is followed for deleting credit card statements, but you’ll need to go to Transactions > Bank > Reconcile Credit Card Statement.
If you want to see if the statement was fully removed, you’ll need to go to Reports > Banking/Budgeting > Reconciliation and look up the reconciliation date. If nothing shows up, it’s been successfully deleted.
Understanding Bank Reconciliation Reports
One of the benefits of NetSuite is handling data. And there are three specific reconciliation reports:
- A Summary Report, which is great for the reconciliation highlights. This report typically includes transaction balances, totals cleared and outstanding, previous bank balances, the ending and current balance, and the difference between reconciled balances and unreconciled totals. To access this report, you’ll need to navigate to Reports > Banking/Budgeting > Reconciliation.
- A Detailed Report which provides more in-depth information. These reports provide insight into all reconciled transactions and their category totals, the previous and current reconciled statement balance, the closing balance, the difference between the current and reconciled statement balanced, and an itemized list of unreconciled transactions.
To access this report, you’ll need to navigate to Reports > Banking/Budgeting > Reconciliation > Detail.
- A Historical Report includes a list of completed reconciliations over a specific period of time. These reports are most commonly used for auditing purposes. However, cleared transactions that are not reconciled will not appear on these reports. To access this report, you’ll need to navigate to Transactions > Bank > Reconcile Account Statement. Then choose a bank account and click Reconciliation History Report.
What is NetSuite Credit Card Reconciliation?
Reconciling a credit card statement requires an almost identical process to completing a bank account transaction:
- Go to Transactions > Bank > Reconcile Credit Card Statement.
- Select the transactions you want to reconcile.
- Click New Charges.
- Fill in the information for the new charge transaction, and click Add.
- Click New Credits.
- Fill in the information for the new credit transaction, and click Add.
- When finished, click either Save & Print, Save, or Complete Later.
After reconciling all the transactions on the statement, entering new credits, and adding charges, the statement balance should match the last reconciled balance and the transactions in this statement. If not, you’ll want to adjust the balance with a journal entry.
Dealing with Payments and Credits
Depending on your setup in Netsuite, you’ll need to be able to reconcile digital payments and credit transactions manually. If that’s the case, you can do this by navigating the Payments and Credits subtab. Transactions need to be cleared and reconciled before a closing period, so even if you see a Yes under the Cleared column, make sure to check that the item is fully reconciled.
- If you make a general journal entry against a credit card account, the entry on the Payments and Credits subtab displays in the Credit column in the register for the account. You’ll see all information related to the transaction, including the date, translation type, transaction number, payor, memo descriptions, and the amount.
- Check the boxes next to the transactions you want to reconcile. You can use Mark All to select all payments or Mark All Cleared to Reconcile to update all transactions.
- If you want to select and reconcile all transactions, click Mark All.
This process also applies to handling Charges and Cash Advances, which can be found under the subtab of the same name.
You can also reconcile new transactions or credits as they are added.
Optimizing NetSuite Payments Reconciliation
Even with its in-built matching automation, NetSuite can get even faster with the right SuiteApp.
For AR professionals, Paystand makes reconciliation effortless. Through an automated AR workflow and real-time data syncing with your NetSuite ERP, you don’t need to worry about importing data. Our integration auto-reconciles transactions—so you can focus on the big-picture items.
But don’t take it from us. See how Choozle used our Paystand SuiteApp to cut their time to close by 50% and doubled their invoices without adding to their headcount in this case study.