Financial Flow

Documentation of financial transactions in NetSuite - journal entries, period-end processes, and GL adjustments.

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In This Section

Page	Description
Journal Entries	Complete guide to all journal entry types

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Financial Transactions Overview

FINANCIAL FLOW OVERVIEW
═══════════════════════════════════════════════════════════════════════════════

                        ┌─────────────────────────────────────┐
                        │         FINANCIAL FLOW              │
                        │      (Non-Inventory GL Impact)      │
                        └──────────────┬──────────────────────┘
                                       │
       ┌───────────────────────────────┼───────────────────────────────┐
       │                               │                               │
       ▼                               ▼                               ▼
┌─────────────────┐          ┌─────────────────┐          ┌─────────────────┐
│ JOURNAL ENTRIES │          │   PERIOD END    │          │  ALLOCATIONS    │
│                 │          │   JOURNALS      │          │                 │
│ • Standard JE   │          │                 │          │ • Expense Alloc │
│ • Intercompany  │          │ • Closing JE    │          │ • Revenue Recog │
│ • Statistical   │          │ • Elimination   │          │ • Amortization  │
│ • Adjusting     │          │ • Consolidation │          │                 │
└────────┬────────┘          └────────┬────────┘          └────────┬────────┘
         │                            │                            │
         └────────────────────────────┼────────────────────────────┘
                                      │
                                      ▼
                        ┌─────────────────────────────────────┐
                        │           GENERAL LEDGER            │
                        │                                     │
                        │  • Account Balances                 │
                        │  • Trial Balance                    │
                        │  • Financial Statements             │
                        └─────────────────────────────────────┘

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Journal Entry vs Transaction GL

TWO WAYS TO POST GL
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TRANSACTION-BASED GL (Automatic):
─────────────────────────────────────────────────────────────────────────────
  Transaction (Invoice, Bill, Receipt, etc.)
        │
        ▼
  System automatically creates GL entries based on:
    • Account mappings on items
    • Default accounts on records
    • Posting preferences

  Example: Invoice automatically posts:
    Dr. Accounts Receivable
    Cr. Sales Revenue
    Dr. COGS
    Cr. Inventory


JOURNAL ENTRY-BASED GL (Manual/Scheduled):
─────────────────────────────────────────────────────────────────────────────
  Journal Entry (created by user or scheduled)
        │
        ▼
  Direct GL posting with:
    • User-specified accounts
    • User-specified amounts
    • Custom memo/descriptions

  Example: Accrual entry:
    Dr. Expense Account
    Cr. Accrued Liabilities

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When to Use Journal Entries

Scenario	Use Journal Entry?	Alternative
Record a sale	No	Create Invoice
Record a purchase	No	Create Vendor Bill
Accrue expenses	Yes	Standard JE
Defer revenue	Yes	Standard JE or Rev Rec
Correct GL error	Yes	Adjusting JE
Reclassify between accounts	Yes	Standard JE
Record depreciation	Yes	Standard or Scheduled JE
Intercompany transfers	Yes	Intercompany JE
Period-end adjustments	Yes	Adjusting JE
Record non-cash transactions	Yes	Standard JE

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GL Impact Comparison

Transaction Type	Creates GL?	Reversible?	Requires Approval?
Standard Transactions	Auto	Via Credit Memo/RMA	Per workflow
Standard Journal Entry	Yes	Via Reversing JE	Optional
System-Generated JE	Yes	Read-only	No
Statistical JE	No (statistical only)	Yes	Optional
Intercompany JE	Yes (both subs)	Via Reversing JE	Optional

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Next Steps

• Journal Entries - Complete guide to all journal entry types