Automating Cost Allocations in NetSuite
The Challenge: Allocating Intercompany Expenses Across Multiple Segment Combinations – Subsidiaries, Departments, Classes and Locations – Without Manual Intervention or Complex Workarounds
For finance teams in multi-subsidiary organizations, allocating expenses accurately can be a complex and time-consuming task— particularly when intercompany expenses need to be distributed across various segment combinations, including subsidiaries, departments, classes, and locations, without relying on time consuming manual intervention or intricate workarounds.
One company faced this exact challenge. With over 100 programs across two subsidiaries requiring cost allocations, they lacked a predefined breakdown, making standard allocation schedules in NetSuite insufficient. Instead, they relied on Excel-based allocations and manual imports into NetSuite—an inefficient and error-prone process that hindered scalability.
The Pitfalls of Manual Cost Allocation
Before implementing NetSuite’s Transaction Line Distribution, the company followed this tedious workflow:
Extracting transaction data from NetSuite.
Manually calculating allocation percentages in Excel.
Creating CSV files for import.
Uploading intercompany journal entries and verifying accuracy.
This approach led to:
Time-draining processes delaying month-end close.
Increased risk of human error, making audits and compliance a challenge.
Lack of scalability, making it harder to manage growth and expanding financial operations.
The Solution: NetSuite’s Transaction Line Distribution
NetSuite’s Transaction Line Distribution is designed to automate cost allocations, eliminating manual processes and streamlining expense management. This feature enables users to apply predefined distribution templates to transactions without needing fixed allocation schedules, ensuring accurate and scalable expense tracking.
How It Works
When creating a vendor bill or another financial transaction, users select a predefined distribution template that automatically applies the correct allocation.
Upon saving, NetSuite automatically generates an intercompany journal entry, ensuring seamless cost distribution.
Templates can be customized with key financial elements such as expense accounts, program classes, departments, locations, and weighted distributions.
Users can also make on-the-spot allocation changes directly on the transaction, without altering the original template.
The Business Impact: Faster, More Accurate Financial Operations
By implementing NetSuite’s Transaction Line Distribution, businesses can:
Automate Cost Allocations & Save Time
Eliminate manual data entry by applying predefined allocation templates.
Reduce accounting errors by automating intercompany journal entries.
Speed up month-end close with real-time transaction allocation.
Gain Flexibility for Dynamic Expense Allocation
Quick Distribution allows users to apply allocation rules instantly at the transaction level.
Supports tax distributions, ad-hoc allocations, and percentage-based cost splitting.
Apply Across Multiple Transaction Types
This feature supports:
Vendor Bills
Purchase Orders
Check Transactions
Credit Card Transactions
Expense Reports
Scale Seamlessly with Business Growth
Eliminates reliance on static allocation schedules.
Improves financial reporting accuracy across departments.
Streamlines intercompany transactions for businesses with multiple subsidiaries.
Why Finance Teams Need NetSuite Transaction Line Distribution
For organizations handling complex cost allocations, NetSuite’s Transaction Line Distribution is a game-changer. By eliminating spreadsheet-driven processes and automating intercompany allocations, businesses can increase efficiency, reduce errors, and scale financial operations seamlessly.
Ready to Simplify Cost Allocations in NetSuite?
If your finance team is struggling with manual allocation processes, it’s time to explore how NetSuite ERP can optimize your financial workflows. Contact Cirrus ERP today to see how we can help streamline your financial operations.