Implementation Guide

How to Set Up Intercompany Transactions in NetSuite

A practical, step-by-step guide that turns the playbook into a working setup — enable the features, build the elimination structure, create intercompany accounts and entities, record transactions, reconcile, then eliminate at close — with links to the official NetSuite documentation so you can verify everything for yourself.

Practical setup guide · Backed by the official NetSuite Help Center

Back to the main article

This is the practical companion to our NetSuite Intercompany Transactions guide. The main article explains the concepts and the elimination model; this page is the plain checklist for actually setting it up in OneWorld. Work through the steps in order — elimination subsidiaries before AIM, reconcile before you eliminate — and use the official NetSuite documentation link under every step to confirm the exact menu and setting as you go.

Before you start — prerequisites

  • OneWorld + subsidiaries: you need NetSuite OneWorld and at least two subsidiaries in a parent-child hierarchy.
  • A sandbox: Automated Intercompany Management can’t be turned off once enabled — prove the whole setup in a Sandbox account first.
  • A chart-of-accounts plan: decide your intercompany A/R, A/P, revenue and expense accounts before you start clicking.

What you'll set up

  1. Confirm OneWorld and enable the features
  2. Create elimination subsidiaries
  3. Create intercompany accounts
  4. Set up representing entities
  5. Record intercompany transactions
  6. Reconcile before close
  7. Run elimination at period close
1

Confirm OneWorld and enable the features

Intercompany functionality won’t appear until the right features are on. Remember: Automated Intercompany Management is a one-way door — it can’t be disabled later.

Go to:  Setup > Company > Enable Features > Accounting
  1. Confirm OneWorld and a subsidiary hierarchy, and enable Accounting, A/R, A/P, Accounting Periods.
  2. Enable the Intercompany Framework for cross-charging and cross-subsidiary fulfillment.
  3. Under Advanced Features, check Automated Intercompany Management (do this only after Step 2’s elimination subsidiaries exist).
2

Create elimination subsidiaries

Elimination subsidiaries are where the cancel-out entries post. They must exist before you enable Automated Intercompany Management.

Go to:  Setup > Company > Subsidiaries > New
  1. Create a subsidiary as a child of each parent that has children.
  2. Set its currency to the parent’s base currency, and check the Elimination box on the subsidiary record.
  3. Remember only journal entries post here — no operating transactions, no bank/credit-card accounts.
3

Create intercompany accounts

Intercompany accounts are how NetSuite recognizes what to eliminate. Create dedicated ones rather than reusing accounts that already hold third-party balances.

Go to:  Lists > Accounting > Accounts > New
  1. Create dedicated intercompany A/R and intercompany A/P accounts (these record elimination candidates only).
  2. Add intercompany revenue and expense accounts if you report internal activity separately.
  3. Check the Eliminate Intercompany Transactions box on each (and on item income/expense accounts used for intercompany items).
4

Set up representing entities

Representing entities are the intercompany customers and vendors that stand in for each subsidiary. Their consistent use is what drives NetSuite’s pairing logic.

Auto or manual:  intercompany customers & vendors (Represents Subsidiary)
  1. If prerequisites are met, let NetSuite auto-generate representing entities for non-elimination subsidiaries.
  2. Otherwise create intercompany customers and vendors manually, setting the Represents Subsidiary field.
  3. Prefix names with IC so they’re unmistakable, and lock down generic entities so users can’t pick the wrong one.
5

Record intercompany transactions

Two paths: paired sales/purchase orders for goods and services, and advanced intercompany journal entries for fees, allocations, and loans.

Go to:  Transactions > Financial > Make Intercompany Journal Entries
  1. For goods, enter an intercompany sales order using the intercompany customer; let NetSuite generate the paired purchase order.
  2. For fees and allocations, create an advanced intercompany journal entry — set the subsidiary per line and click Auto Balance.
  3. Confirm each line hits the right intercompany account and that the Eliminate box is checked.
6

Reconcile before close

Run reconciliation before you eliminate. Fixing mismatches first is far cheaper than unwinding a bad elimination after posting.

Go to:  Reports > Financial > Intercompany Reconciliation
  1. Run the Intercompany Reconciliation report for the period you’re about to close.
  2. Work the five sections — unlinked orders/returns, mismatched amounts, and the rest — drilling into each transaction.
  3. Correct unpaired or imbalanced transactions before running elimination.
7

Run elimination at period close

Elimination is the last task in the Period Close Checklist, and it has prerequisites — FX revaluation and consolidated balances must run first.

Go to:  Period Close Checklist → Eliminate Intercompany Transactions
  1. Complete Revalue Open Foreign Currency Balances and Calculate Consolidated Balances first.
  2. Run Eliminate Intercompany Transactions; NetSuite posts elimination journals to the elimination subsidiary (FX timing differences go to CTA-E).
  3. Review the Intercompany Elimination report to confirm source transactions and elimination lines, then mark the task complete.

A note on accuracy: NetSuite menu paths, feature names, and report behavior evolve between releases, and some specifics differ by edition (for example, Multi-Book elimination, advanced vs legacy intercompany journals, and inventory-profit handling). Always confirm each step against its official reference, and validate the full setup in Sandbox — remembering that Automated Intercompany Management can’t be disabled once enabled.


Where a basic setup ends and engineering begins

Everything above gets you recording and eliminating intercompany transactions cleanly. What sits beyond the standard setup — automating recurring management-fee and cost-allocation journals with allocation schedules or a scheduled SuiteScript, handling intercompany inventory profit that NetSuite doesn’t eliminate out of the box, enforcing entity selection with validation scripts, and adding a balance-confirmation workflow — is where engineering earns its place. It often means scripted allocations and SuiteFlow controls, not just configuration.

Intercompany touches your consolidated financials, so build it in a Sandbox, reconcile before every elimination, and confirm the elimination report before closing. For the full reasoning — the model, the accounts, and the common pitfalls — read the companion guide.

Back to the main article
Setting up intercompany in NetSuite? Our team designs the elimination structure, intercompany accounts, and entity controls, configures Automated Intercompany Management, and validates the close Sandbox-first — so your consolidated numbers tie out.
Talk to a NetSuite finance engineer

Documentation links point to the official Oracle NetSuite Help Center (docs.oracle.com). Exact menu paths, feature names, and report behavior vary by NetSuite version and edition — confirm each step against the linked Help Center page and validate in Sandbox first. Automated Intercompany Management cannot be disabled once enabled.