Reconciliation in NetSuite: The 10-Minute Guide
Transitioning from manual reconciliation to NetSuite ERP has simplified the process for accounting professionals, reducing the time spent on data entry. However, reconciling all transactions manually before the end of the month can still take time and effort. Get ready to streamline your financial processes and dive into the more exciting aspects of your work.
Even after shifting from the manual reconciliation process to the NetSuite Credit Card Processing, reconciling all transactions by hand before the month's close can be tedious.
But NetSuite, 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. Netsuite and user-created rules can speed up the initial reconciliation and payment process.
Still, sometimes you need to review transactions manually or generate reports. This is time-consuming, but a slow and manual reconciliation process can result in errors and prevent the AR team from more strategic tasks.
How can you speed up the reconciliation process without hiring more accountants or outsourcing? If you are using NetSuite, it's easier than you think.
In this guide, we'll cover how to find and use NetSuite's many account reconciliation features so you can speed up your workflow and get to the exciting stuff.
Does NetSuite Have Reconciliation Tools?
As a robust ERP, NetSuite allows accounting teams to reconcile the 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 templates or linked to your financial institution, but CSV is the most common and easiest to use.
Matching account transactions with your bank data manually is possible, but you'll likely want to leverage NetSuite's Intelligent Transaction Matching feature. There are two kinds of default rules in Netsuite. Rules that cannot be altered are called Systemic Rules. Flexible rules are known as User Rules. These rules will automatically detect and match bank lines that meet the proper criteria.
Navigating to Transactions > Bank > Match Bank Data lets you see all automatically matched data.
What Are NetSuite's Automated Reconciliation Rules?
The NetSuite ERP has many rules regarding automated reconciliation that cannot be overwritten. 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 created in the system.
- Match transactions with minor discrepancies with leading zeros or prefixes so long as the date, amount, and IDs are generally the same.
This automation will only match transactions if the date of the imported transaction is 90 days or less.
How to Create Your Own Reconciliation Rules
Through User Rules, you can create your criteria for matching and reconciling invoices. To do so, 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 use NetSuite without additional SuiteApps, you'll likely do 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 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 reconciling 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, and How Does It Work?
When accounts receivable professionals conduct bank reconciliation, they match bank statements with your business accounts. And, for most workers, it's boring. Looking back and forth between a bank statement and a NetSuite journal entry for hours isn't a great use of time, even though it's essential. At the same time, human error often results in costly mistakes, enables fraud, and creates confusion around cash flow.
The NetSuite bank reconciliation features streamline the entire process.
Once your account reconciliation is set up, you can begin reconciling bank statements, including deposits, credits, checks, and other payments. You can also delete reconciliations in case of an error and generate reports for audits.
How to Enter Bank Reconciliation in NetSuite
- Go to Transactions > Bank > Reconcile Bank Statement.
- Select the transactions you want to reconcile on the Deposits and Credits or Checks and Payments sub-tabs.
- Click the New Charges sub-tab.
- Fill in the information and click Add.
- Click the New Deposits sub-tab.
- 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.
How to Delete a Bank Account Reconciliation
Deleting a bank account reconciliation is more straightforward. 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 for deleting credit card statements is followed, but you must go to Transactions > Bank > Reconcile Credit Card Statement.
To see if the statement was entirely 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 excellent 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 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 Save & Print, Save, or Complete Later.
After reconciling all the transactions on the statement, entering new credits, and adding charges, the reconciliation 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. You can do that by navigating the Payments and Credits sub-tab if that's the case. Transactions must be cleared and reconciled before a closing period, so even if you see a Yes under the Cleared column, 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 sub-tab 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 sub-tab of the same name.
You can also reconcile new transactions or credits as they are added.
Optimize Your NetSuite Payments Reconciliation
Even with its in-built intelligent transaction matching automation, NetSuite can get even faster with the right SuiteApp.
For AR professionals and financial management teams, 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 financial data. Our integration auto-reconciles transactions—so you can focus on the big-picture tasks.
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.