The Promise vs. The Reality

NetSuite OneWorld promises seamless multi-entity consolidation. Add subsidiaries, configure eliminations, push a button, and you have consolidated financials across your entire organization. In theory, it's elegant and powerful.

In practice, most companies spend days each month wrestling with eliminations, currency conversions, and numbers that don't tie. The consolidated trial balance doesn't balance. Intercompany eliminations don't eliminate. Currency translation produces mysterious gains and losses. What should be push-button becomes manual reconciliation.

The problem isn't OneWorld—it's how it was configured. Consolidation complexity lives in the setup, and shortcuts during implementation create permanent monthly work.

The Mistakes Everyone Makes

Intercompany Transactions That Don't Eliminate

Company A sells to Company B. At consolidation, these transactions should net to zero—the revenue in A and the expense in B should eliminate to nothing from a consolidated perspective.

But they don't. Why not?

• The accounts don't match: A uses Revenue - Intercompany while B uses Cost of Goods - Purchases

• The amounts don't match: A recorded $100,000 but B recorded $99,500

• The timing doesn't match: A recorded in November but B recorded in December

• The elimination rules don't cover this combination

Result: hours of manual reconciliation every month, adjusting entries to force elimination, and consolidated numbers that require explanation.

Inconsistent Chart of Accounts

Each subsidiary evolved its own account structure. The parent uses a five-segment account number. One subsidiary uses four segments. Another uses different account names for the same concepts.

Mapping them together for consolidation requires complex rules, manual translation, and constant maintenance. What should be automatic requires human interpretation.

Currency Conversion Confusion

Multi-currency consolidation requires different rates for different accounts:

• Balance sheet assets/liabilities at current rate

• Equity at historical rate

• Income statement at average rate (typically)

• Some items at specific historical rates

When these settings are wrong, your foreign subsidiaries show gains and losses that don't make sense. Cumulative translation adjustment becomes a mystery account that nobody can explain.

Ownership Structures That Don't Match Reality

Minority interests, partial ownership, holding company layers, complex investment structures—OneWorld can handle these, but only if configured correctly.

Most implementations take shortcuts: 100% owned subsidiaries only, simple direct ownership, no minority interests. Then the business evolves, acquisitions happen, and the original structure can't accommodate the new reality.

Elimination Rules That Miss Scenarios

Elimination rules handle the common cases configured during implementation. But intercompany activity is more varied than anticipated:

• Management fees and allocations

• Shared services charges

• Intercompany loans and interest

• Transfer pricing adjustments

• Dividend distributions

Each scenario needs specific elimination rules. Missing rules mean manual elimination work at month-end.

Getting Consolidation Right

Standardize the Chart of Accounts

Yes, it's painful upfront. Mapping disparate account structures, converting historical data, retraining users who know the old codes.

But a unified account structure makes everything downstream simpler. The investment pays back every single month in faster closes, cleaner eliminations, and more reliable consolidated reporting.

When implementing standardization:

• Design the consolidated structure first

• Map each subsidiary's accounts to the standard

• Convert historical data systematically

• Provide mapping documentation for users

• Implement validation to prevent non-standard entries

Implement Intercompany Discipline

Intercompany eliminations work when both sides record matching transactions. That requires discipline—same accounts, same amounts, same timing.

Best practices:

• Use standard intercompany accounts across all subsidiaries

• Implement automated matching: when A records intercompany revenue, B automatically gets the corresponding expense

• Reconcile intercompany balances before consolidation

• Address mismatches immediately, not at month-end

Custom automation can create matching transactions automatically, eliminating the timing and amount discrepancies that cause elimination failures.

Document Currency Translation Rules

Create clear documentation of:

• Which rate applies to which account type

• How rates are determined and where they come from

• Treatment of CTA

• Period-specific rate requirements

Review this documentation with auditors before implementation. Currency translation is an area where auditors have specific expectations.

Test Elimination Scenarios Thoroughly

Don't wait for real transactions to discover your eliminations don't work. Build test cases:

• Standard intercompany sales

• Intercompany services

• Management fee allocations

• Intercompany loans and interest

• Dividend flows

• Transfer pricing scenarios

Test each scenario and verify elimination results before go-live.

Build Reconciliation Into the Process

Automated saved searches can flag intercompany imbalances before consolidation runs. Find problems early when they're easier to fix.

Reconciliation checkpoints:

• Intercompany accounts balance to zero before consolidation

• Due to/due from accounts match between subsidiaries

• Currency translation produces expected results

• Elimination entries net to zero

  
  

The Role of Custom Solutions

Native OneWorld handles standard scenarios. Complex or unique requirements often need custom development.

Automated Intercompany Transaction Creation

When Company A records an intercompany invoice, a custom solution can automatically create the corresponding bill in Company B—same amount, same date, linked accounts. No waiting for manual entry, no timing differences.

Enhanced Reconciliation Tools

Custom reports that compare intercompany balances across subsidiaries, flag mismatches, and route exceptions for resolution. Real-time visibility into intercompany health.

Complex Allocation Automation

Management fee allocations, shared service cost distributions, complex intercompany charges—these often require custom scripts to calculate and post correctly across multiple entities.

Minority Interest Calculations

For complex ownership structures with minority interests, custom calculations may be needed to properly allocate equity and earnings.

Bottom Line

OneWorld consolidation can be push-button simple—if the foundation is solid. Most consolidation pain comes from shortcuts during implementation that create permanent monthly work.

The question isn't whether to fix these issues—it's whether you fix them now or keep paying the monthly tax forever. Smart investment in proper consolidation setup, including custom automation where needed, pays back every close cycle.