#51 | NetSuite Create Reversing Journal Entry

In this article, we are going to learn how to create a reversing journal entry in NetSuite. We are going to cover how to:

• Login to NetSuite
• Fill in the primary information
• Use for the reversing journal entry date
• Find the journal entry once you are done

I suggest you watch the video. It’s easier to understand if you are a visual/audio learner. The content below is the same as the video. It’s for those who learn by reading.

How to Create Reversing Journal Entry

The first thing to do is to log in to your NetSuite account.  Then go to the Transaction menu and select Financial.  After that, click on Make Journal Entries.  It’s actually the same process as making a normal journal entry.

After clicking on Make Journal Entries, you will be taken to a page that looks like this:

Fill in Primary Information

This is a blank journal entry form. The next thing we need to do is select our subsidiary which is the set of books that we are going to enter this in.  Then we are going to type comments in the Memo field, so that we can remember what this journal entry is about.  We will also enter the date of the journal entry, the posting period when we want the journal entry to post, and then the reversal date.

This looks exactly like creating a manual journal entry.  But we have to look further into what a reversal date and deferred entries are.  When you click the Help field, it explains what a reversal date is.  It says: “If this journal entry is intended to be reversed, enter the date for the reversing entry to be posted.”  That’s simple enough, just enter the date.

The next part is a little more confusing.  If the deferred date is checked, this field is mandatory.

Use for the Reversing Journal Entry Date

The next question is what is a deferred entry. When you look at the Help field for Defer Entry, it says: “Check this box to make the reversal a memorized transaction that automatically occurs on the date entered in the required Reversal Date field.  Clear this box to make the reversal and immediately entered transaction with the date in the Reversal Date field. This is a little confusing so we’ll look at an example transaction.

In our example, our journal entry date is March 31^st, and it’s going to post in the March 2016 period.  We’ve put the reversal date as April 1st when it’s the next reporting period, we want it to reverse. Now, let’s take a closer look at the defer entry click button.  By checking the deferred entry button, it means that we have to resubmit this reversal journal entry in order for it to post in the GL on April 1st.

In other words, if you don’t check the defer entry box, the system will automatically reverse this journal entry. By clicking defer entry, you basically have to re-approve or have to find that journal entry again in the April close to approve it.

Similar to creating a manual journal entry, we have to select our GL accounts.  In this case, we are going to select an expense because usually the expenses are the ones that need to be reversed for accrual purposes.  We’re going to pick Advertising expenses in this example.

Now, we are going to enter our debit amount, which in this case is $5,000.00.  You will also notice that the Memo field was carried over.  We’re not going to enter anything in the main field and for our department; we are going to pick Marketing.  Then for location, we are going to type in Boston for this sample.

Now, this is a simple journal entry, so we’re actually going to click on Copy Previous, which copies all the details from the previous line over for us.

Next, we are ready to enter the data for the credit line, but we have to first select our GL accounts for the credit line, which, in this case, is Current Liabilities. From the current liability category, we can then select Accrued Expenses.

To recap, the expense was advertising for the debit, and credit is accrued expenses.  We will delete the debit amount because it will automatically come up with the debit field. If we delete that and press Tab, it will automatically populate the credit field with $5,000.00, so that the journal entry is balanced.  After that, we have a journal entry that has $5,000.00 in the debit and $5,000.00 in the credit. You can now click Save.

How to Find the Journal Entry Once Done

After saving the journal entry, how do you find that reversing journal entry? How do you make sure that your reversing entry is actually in the system?  To do this, go to Transaction, then select Financial, then Make Journal Entries, and the select List.  You can open it on a new tab, so that you can see it easily

In the new tab, you can see the journal entry we just entered. You can also see that it was posted on April 1st, but it’s pending approval. It hasn’t posted yet.

Now, we can look at the details and make sure they are correct.  It should be the reverse of what we entered. It’s debiting the accrued expense, and it’s crediting advertising expense. It also says that it’s a reversal journal entry.  You can see the amounts and that journal entry is the exact opposite of what we entered because it’s a reversing journal entry.

That wraps up our training on creating a reversing journal entry on NetSuite. To recap, here’s what we have discussed;

• Login to NetSuite
• Fill in the primary information
• Use for the reversing journal entry date
• Find the journal entry once you are done