Solve NetSuite Foreign Currency Cash Operations with the Prolecto Account Clearing Transaction Bundle

The article is relevant if you want to understand what the Prolecto Account Clearing Transaction Bundle offers and how it can help solve NetSuite cross-currency general ledger challenges.


In a number of previous articles, I have written about the Account Clearing model in the NetSuite system. The Account Clearing model is especially valuable when you are trying to conduct a transaction that needs to cross currency boundaries. Readers may wish to reference my previous articles to understand some of the many different use cases:

  1. How To Cross NetSuite Foreign Currency Boundaries with the Account Clearing Model
  2. How To: Multiple Foreign Currency Cash Receipt Settlement
  3. NetSuite Best Practice: Receive Local Currency for Foreign Currency Invoices
  4. Learn How To Accept Different Foreign Currency in NetSuite Cash Receipt Operations
  5. Best Practice: How to Pay a NetSuite Vendor Bill with Foreign Currency
  6. Best Practice: Account Clearing Method for NetSuite Electronic Payment Method Reconciliation
  7. How To: Transfer Foreign Currency Between NetSuite Subsidiaries

Automating NetSuite Cross Currency Account Clearing Operations

Naturally, our work with clients brings us to all kinds of situations. More recently, we worked with a client that has extensive foreign currency cash receipt operations. We initially set up the client to leverage NetSuite’s account transfer record to perform the transactional work. This solved their immediate challenges as NetSuite’s bank transfer transaction has a nice feature which allows you to enter a single amount of currency units from one account and transfer funds to another bank account in a different currency. The transaction will then calculate the exchange rate between the two amounts.

However, as the client sought to scale the accounting operation, NetSuite’s Bank Transfer structure is not powerful enough to build streamlined processing flows with any scaling in mind. The primary challenge is that

  1. it only allows for one amount on each side of the bank account boundaries, and;
  2. it is not programmable by the SuiteScript API or via CSV imports.

Solving the Challenge with a NetSuite Custom Transaction Type

Leveraging NetSuite’s relatively new capacity for producing a posting transaction type that is a “first class citizen” and thus can be used in important general ledger operations, we developed out the Prolecto Account Clearing Transaction that can be used in many account clearing operations.  Here are some key features:

  1. Control Amounts: enter the total amount of the foreign currency and the local (subsidiary) currency and it will confirm the transaction is in balance not only for traditional debits and credits but between currency amounts.
  2. Automatic Exchange Rate: using the control amounts, determine the overall transaction exchange rate.
  3. Deem Line 1 as Header: to get full advantage of header and line operations, deem the first line as a header. Think of this similar to an invoice transaction where the header account is accounts receivable (the debit).
  4. Deem Lines 2+n as Detail: lines 2 through the end of the transaction are effectively the detail. Similar to an invoice transaction with lines, these would be the credit side of the flows. The debits and credits are not strict — it just aides thinking.
  5. Line Level Reference Transaction Pointers: Here is one of the more powerful elements of the transaction. By referencing another NetSuite transaction on the clearing line, we can pull the underlying foreign currency amounts and underlying exchange rate information. This then can fill in the relative line information needed and help our cross reference audit and control work.
  6. Line Level Reference Transaction Updates: Going further, we can indicate that when the overall transaction commits to the database, and while respecting open periods and other controls, we can update the related transaction exchange rate.

To fully understand why we need the Line Level Reference transaction capacities is beyond the scope of this article. However, stay tuned to learn how we have designed a NetSuite Consolidated Cross Currency Cash Receipts system.

I suggest clicking on the image links to get a feel for the transaction types and the capacities offered.

Account Clearing Transaction Programmable API

With our Custom Account Clearing Transaction model, we can now fully program the work required to solve difficult challenges in integration work — especially those that involve bank treasure functions that cross currency boundaries in both Cash Receipt and Cash Payment models. We can now fully automate the import of information across currency boundaries. This is quite important when working with foreign exchange wire-house platforms that perform heavy cross-currency money movements.

With the capacities of the custom transaction and our library control logic behind it, we can help solve many of the challenges that are often done with journal entries but allow for better controls, referencing and ultimately financial reporting.

How to Get the Prolecto Account Clearing Bundle

The bundle is free of license charge for all Prolecto clients. The idea is that it can be used as a building block to streamline and automate cumbersome NetSuite accounting entries that may have traditionally been done with journal entries but need enhanced control and visibility. For prospective clients, we generally have a use case conversation for the applicability so we can estimate out the effort for implementation. Perhaps you see an opportunity to streamline a cumbersome NetSuite accounting flow and you seek to get away from journal entries that demand spreadsheet manipulation before import? Let’s have a conversation.

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Marty Zigman

Holding all three official certifications, Marty is Southern California's NetSuite expert and leads a team of senior professionals at Prolecto Resources, Inc. He is a former Deloitte & Touche CPA and has held CTO roles. For over 25 years, Marty has produced leadership in ERP, CRM and eCommerce business systems. Contact Marty to set up a conversation.

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