If your organization operates across multiple legal entities, countries, or business units, NetSuite OneWorld's subsidiary management is essential. Subsidiaries allow you to maintain separate books for each entity while providing consolidated reporting at the parent level. This guide covers everything you need to know to set up and manage subsidiaries.
What Is a Subsidiary in NetSuite?
A subsidiary represents a distinct legal entity, division, or business unit within your organization. Each subsidiary can have its own:
- Base currency and additional currencies
- Chart of accounts (shared or specific)
- Tax registrations and compliance rules
- Address and contact information
- Fiscal calendar and accounting periods
Step 1: Plan Your Subsidiary Hierarchy
Before creating subsidiaries, design your hierarchy. NetSuite supports a tree structure with a single parent at the top and unlimited child levels. Common structures include:
- Geographic – Parent Company → Americas → Europe → Asia-Pacific
- Functional – Holding Company → Operating Co. → Sales Co. → Service Co.
- Hybrid – Combining geographic and functional divisions
Step 2: Create Subsidiaries
Navigate to Setup > Company > Subsidiaries > New. Configure:
- Name – Legal entity name (e.g., "YRK Consulting B.V.")
- Parent Subsidiary – Select the parent in the hierarchy
- Country – Primary country of operations
- Currency – Base currency for this subsidiary (e.g., EUR, USD, GBP)
- Edition – SuiteCloud edition (usually matches your account)
- Federal Tax ID – Tax registration number (VAT number, EIN, etc.)
- Address – Legal address for the entity
Step 3: Configure Multi-Currency
Each subsidiary has a base currency, but you can enable additional currencies for transactions with foreign customers/vendors:
- Go to Setup > Company > Currencies to view/add currencies
- Set exchange rates at Lists > Accounting > Currency Exchange Rates
- Configure automatic exchange rate providers for daily rate updates
- Set the consolidation exchange rate type (Average, Current, Historical) for each account category
Step 4: Set Up Intercompany Transactions
When subsidiaries transact with each other (e.g., one entity sells services to another), you need intercompany accounts and transactions:
- Intercompany Accounts – Create a pair of Intercompany Receivable and Intercompany Payable accounts
- Intercompany Preferences – Configure at Setup > Accounting > Accounting Preferences to auto-create paired transactions
- Elimination Entries – Set up elimination subsidiaries to remove intercompany balances during consolidation
Step 5: Configure Roles for Multi-Subsidiary Access
Each role can be restricted to one or more subsidiaries. This ensures users in the European subsidiary can't access or modify data belonging to the US subsidiary. Configure subsidiary restrictions on the role's Access tab.
Step 6: Run Consolidated Reports
Once your subsidiaries are set up, create consolidated financial reports:
- View individual subsidiary financials by filtering on a specific subsidiary
- View consolidated financials by selecting the parent subsidiary
- Currency translation happens automatically based on your exchange rate settings
- Elimination entries remove intercompany balances in consolidated views
Best Practices
- Get the hierarchy right from the start – Restructuring subsidiaries later is complex and time-consuming
- Use a shared chart of accounts – This makes consolidation much simpler
- Automate exchange rates – Manual rate entry is error-prone for high-volume multi-currency operations
- Test intercompany transactions thoroughly – Verify that paired transactions create correctly and eliminate properly
- Document your subsidiary structure – Create a clear diagram showing the hierarchy, currencies, and intercompany relationships
Planning a multi-entity NetSuite setup? Contact YRK Consulting for expert OneWorld configuration services.