The Multi-Book Account (MBA) functionality is an interesting and powerful feature in NetSuite, but what you might find most exciting is that the module is free for all OneWorld customers. OneWorld customers can implement MBA to handle posting and reporting accounting impacts to parallel sets of general ledgers based on whatever business rules they require, without having to buy any additional modules. The entire functionality set is free*, however if you do not already have a Sandbox, you will need to purchase it to implement this module.
MBA's Simple Building Blocks
The Accounting Book record, shown below, is at the heart of the MBA module.
This record allows you to define secondary books to post to. These book records allow availability to one, several or all of your subsidiaries; you have complete control. You can also define the Base Currency this book will post to for each subsidiary, which can be the same base currency as the subsidiary you normally use.
Item Account Mapping and Global Account Mapping
These two records, seen below, are structured similarly: you pick the book they are going to post to and the subsidiary to which this rule applies. As you can only pick a single subsidiary for a mapping, if you need essentially the same rules across the board, you can easily create multiple similar mappings for each of your subsidiaries. Then it’s simply a matter of picking your Source and Destination accounts.
The difference between the two record types is that Item Account Mapping rules apply to the GL Impact generated by transacting items: Income, Expense, COGS, etc. The impacts have to specifically have been generated by a transaction using item records.
Global Account Mapping rules apply to all GL Impacts not generated by an item transaction.
MBA Use Cases
Now that we have covered the core components, let’s talk about the use cases where MBA can and cannot be used:
- Different Currency - MBA is great if you need to operate and report in different currencies. For example, you may want to operate in USD, but local statutory requirements require you to present financial reports in a particular country’s currency. In this case, you wouldn’t need to make use of the Mapping records – just declare a book in the correct secondary currency and you’re done! NetSuite will translate all transactions automatically in real-time.
- Minor GL Posting Adjustments - The Account Mapping rules allow you to post slightly differently in each book. But, be careful here: you can’t do vastly different postings. The Account Type must remain the same between the Source and Destination (or nearly… for example, you can make an Other Current Asset to an Other Asset). Also, your classifications (Department, Class, Location) will remain the same. Thus, a good use case for these types of slightly modified GL mappings would be to maintain separate GAAP and IFRS compliant books.
A further specialized use case we will be seeing more of is the use of a second book to help transition companies with Revenue Recognition needs to ASC606 / IFRS15 compliance. Under this scheme, NetSuite users will be able to keep their old rev rec engine posting to one book, and then implement their new rev rec rules via the Advanced Revenue Management module and have them post to the second book, ensuring a smooth transition threshold.
However, it is important to understand the limitations of the MBA module as there are still many scenarios it is currently not designed to cope with. There are limitations to what the books can handle.
Here is a short list of things you cannot use MBA for:
- Maintain separate calendar types by book. MBA does not have any functionality to alter how calendars work.
- Maintain separate subsidiary hierarchy. MBA does not allow you to have subsidiary differences between books.
- Maintain different COGS types. All Books must value COGS in the same way.
Otherwise, once you have set up MBA, day-to-day use is basically automatic. NetSuite will post to the other books as per the rules you defined without further effort on your part.
You can now select the book when viewing GL Impacts on transactions, as seen below.
You can also select the book when viewing financial reports.
Historical data management is the last point of complexity to consider. The module allows you to pick an effective start date for the booking of transactions to your new books. If you have any inventory, though, it will be mandatory for you to convert your entire account’s historical GL Impacts to your other books. Don’t worry, though – this does not require you to reopen periods. Quite the opposite. If you don’t have inventory, then you can pick the effective date you want books to start recording impacts.
Achieving a Successful MBA Implementation
While Multi-Book Accounting is a simple functionality that runs on auto-pilot once setup, it’s important to proceed carefully and get the set up sequence right. It is crucial for your accounting team to articulate clearly to the implementation team each required mapping to ensure a smooth implementation.
In the scope of things, a Multi-Book Accounting Certified professional can implement MBA in just a handful of hours; this is probably one of the fastest modules to set up in NetSuite. But, it has to be done right. Just like the Advanced Revenue Management module, NetSuite has set up a certification program to ensure only qualified partners are allowed to implement this module; getting things wrong can leave lasting issues.
And, of course, always at the forefront of implementation quality, Tribridge is MBA certified and happy to help you with your Multi-Book needs. If you feel your organization might benefit from Multi-Book Accounting, reach out to us and we’ll guide you through a discovery.
* There will be some professional services fees for installation.