Are you nearing the end of your NetSuite implementation and diving into the data migration of GL history and open transactions at Go Live? Are you wondering how open Accounts Receivable (AR), open Accounts Payable (AP), Inventory balances and outstanding checks will be migrated into NetSuite without duplicating the GL impact from GL history? As an accountant who implements NetSuite, I’d like to share some best practices on this with you.
When you bring over GL history Trial Balance net changes via journal entry, I suggest assigning a fictitious customer, such as ‘Data Migration Customer’, to the AR lines and a fictitious vendor, like ‘Data Migration Vendor’, to the AP lines. This helps isolate the data migration in the aging reports to the fictitious names instead of "no name", which might be used in business if a journal entry isn’t coded to a customer/vendor.
For open AR transactions, first you want to create an ‘Other Charge for Sale’ item and map the income account to a clearing GL account (e.g., 9999 OPEN AR DATA MIGRATION...you can make this the item name too). When you import the open customer invoices and credit memos into NetSuite, you will want to use the item: OPEN AR DATA MIGRATION on the line for the open amount. The GL impact of the invoice then debits AR and credits the 9999 clearing account. This allows you to accumulate the open AR in account 9999, which gives you one place to track what to reverse in the General Ledger for open AR. Once all open AR is in NetSuite and you verified open AR balances by customer, next you create a transaction saved search for account 9999* to identify the GL data that needs to be reversed to avoid duplication in the ledger. Finally, you use the saved search to do a journal entry by period to reverse the GL impact of open AR (usually by debiting 9999 and crediting AR including any classifications and the fictitious customer).
For Accounts Payable, it helps if you can pay all vendor bills and take all vendor credits before Go Live, as this will ensure you don’t have any open AP to migrate to NetSuite. However, this may not be possible, so I share with you that open AP follows the same concept as open AR with one exception: you don't need to create an item because vendor bills and credits can be coded directly to a GL account. First, you want to create a clearing GL account 9998 OPEN AP DATA MIGRATION, then import the open vendor bills and credits to the 9998 account on the line for the open amount. This accumulates the open AP in the 9998 account to give you a record of what to reverse from the General Ledger. Once all open AP is in NetSuite and you verified open AP balances by vendor, then you create a transaction saved search for account 9998* to determine the GL data that needs to be reversed to avoid duplication in the ledger. Finally, you use the saved search to do a journal entry by period to reverse the GL impact of open AP (usually by debiting AP and crediting 9998 including any classifications and the fictitious vendor).
The same concepts apply for inventory balances and outstanding bank checks. I create and use clearing GL account 9997 INVENTORY DATA MIGRATION for the inventory adjustment to bring in beginning inventory balances and clearing GL account 9996 OUTSTANDING CHECKS AT GO LIVE for a check transaction to represent each outstanding bank check from the last bank reconciliation before Go Live. This is a bit repetitive, but I use the clearing accounts to easily identify the GL impact to reverse with a journal entry to mitigate doubling amounts in the General Ledger.
*Below is a suggestion for the transaction saved searches:
The goal is to get the transaction saved search results similar to what you would need for a journal entry import. This will allow you to export the saved search and have it nearly prepared for import as a journal entry to reverse the GL impacts of the open transactions.
Finally, please note this blog excludes intercompany and multi-currency concepts, as these two factors introduce a complexity with GL history and open transactions during data migration at Go Live. If you’d like to learn more about NetSuite or need any NetSuite support, please reach out to us at Concentrus. Our consultants are ready to assist you.
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