How NetSuite’s Account Reconciliation Process Benefits Your Business

NetSuite's account reconciliation process ensures financial records accuracy for your business. It is not only fundamental to maintain regulatory compliance, but also serves as a catalyst for making informed business decisions.

Reconciling accounts is a critical process in which a business compares its internal bookkeeping, or general ledger records, to that of their bank and credit card statements. This aids in detecting mistakes and discrepancies in your accounting records to ensure good financial housekeeping in your business. Manually comparing each transaction against the accounting records of your business can be a laborsome process, especially for medium and large enterprises that run various transactions from multiple accounts per month. This is why NetSuite’s account reconciliation feature is a lifesaver for all businesses.

NetSuite account reconciliation

There are seven categories of GL accounts that track the financial activity within a business. These categories are split into assets, liabilities, equity, revenue, expenses, gains and losses. NetSuite accounting’s comprehensive GL functionality is based on the double-entry accounting system. This means that with every transaction the GL must credit one account and debit another. Account reconciliation within NetSuite automatically confirms the accuracy of each GL statement within a business by comparing its data to the raw records of the bank statement.

Within the NetSuite account reconciliation process, the ERP software will automatically identify the accounts that need to be reconciled. These could include all bank accounts linked to a business’s financial transactions, which the software can automatically import into the NetSuite bookkeeping system. Once this has been done, the software begins matching the statements to the general ledger and highlights any discrepancies that may need to be investigated.

There are a number of reasons why discrepancies may exist which may include differences in timing between when a transaction was recorded in your business to the time it is processed by the bank. It could also commonly be a result of incorrect data entries or bank errors, but having it pointed out by your accounting software can ensure that these are picked up timeously thus avoiding ripple-effect errors in your reporting. Once you have investigated the discrepancies, you can have these adjusted within NetSuite and the software will generate reconciliation reports for your company’s internal auditing and to ensure good housekeeping of your financial records, making it easier to substantiate and justify the numbers when you file your taxes.

Benefits of NetSuite account reconciliation

Here’s why NetSuite’s account reconciliation process is beneficial to every business

  • It ensures accuracy: your financial records are an important reflection of the state of your business. Having these constantly checked and updated reduces the risk of inaccurate reporting to the IRS and ensures that an accurate picture of the financial state of your business is readily available for potential investors.
  • Saves you time: Having your ERP software automatically embark on the account reconciliation process can save you a lot of effort in having to manually cross-check transactions against your internal books.
  • Encourages compliance: Early detection of discrepancies can help your business rectify errors timeously to ensure compliance with GAAP and IRS requirements, thus aiding your business to avoid unnecessary penalties.
  • Offers regular oversight of business finances: The account reconciliation process delves into a business’s accounts payable and accounts receivable transactions regularly, not only does the reports generated through the account reconciliation process, offer an opportunity to verify and endorse internal records, but it also gives you oversight of the numbers in your business, presenting you with an opportunity to take and review strategic decisions to encourage business growth.

NetSuite’s account reconciliation process ensures financial records accuracy for your business. It is not only fundamental to maintain regulatory compliance, but also serves as a catalyst for making informed business decisions.

We can help you set up your NetSuite software in a way that suits the financial and reporting needs of your business. Our NetSuite Outsourced Controllers are skilled at software integration and can offer your business the peace of mind it needs to run its accounting accurately and independently.

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