The quick answer
Go to Transactions → Financial → IC Netting → Balance Overview, pick the transaction currency, and find the subsidiary pairing with an amount under Available for Netting. Click New to open the Netting Workbench, select the payable and receivable transactions to net (or use Suggest Netting), and Save. That creates a Netting Statement; a user with Netting Settlement Approval approves it, and NetSuite generates four Netting Settlements, an A/P and an A/R one for each subsidiary, posting through the IC Netting Clearing Account.
Two subsidiaries that trade with each other build up payables in one direction and receivables in the other. Netting settles the overlap without a bank payment for the netted portion; whatever is left stays open for your normal intercompany settlement. The screenshots use sample data and a fictional operating company.
Before you start
Netting needs OneWorld with the Intercompany Framework feature on, and access to both subsidiaries. The subsidiaries have to be represented by intercompany customer and vendor records, because that's what makes their transactions nettable, and the intercompany preferences have to be set. NetSuite uses a system-generated IC Netting Clearing Account, an Other Current Asset account shared by all subsidiaries, for the settlements.
Your role needs the Netting Settlement permission to view and build a netting, and Netting Settlement Approval to approve the statement. If the IC Netting menu doesn't show in a custom center, it has to be added.
01 · Review open balances
Open Balance Overview and set Currency to US Dollar. Each row is a subsidiary, its counterparty and a currency, with the open payable and receivable balances under Balance Due and the amount NetSuite can net under Available for Netting. Larkfield East owes Larkfield West 6,500.00 and is owed 4,100.00, and all of it is eligible, so 4,100.00 is available. Available for Netting counts only nettable amounts, so credits or ineligible transactions can pull it below the smaller balance, even to zero.
Treat that number as a candidate. Transactions still have to be matched and eligible before any of it settles.
02 · Build the netting in the workbench
Click New in the Netting column; it only appears on rows where NetSuite found a nettable mutual balance. The Netting Workbench shows an Accounts Payable panel and an Accounts Receivable panel for the subsidiary and its counterparty, with a Summary of the maximum nettable amount and what's applied so far. Where the subsidiaries use different base currencies, check the Exchange Rate subtab too; a rate that differs from the transactions' rates produces gain or loss lines on the settlements.
Either tick transactions and enter the Applied amounts by hand, keeping the two sides equal, or click Suggest Netting. Suggest Netting works down the current display order until the smaller side is used up, so sort the panels first if you want the oldest transactions applied first. Here it applies 4,100.00 against the 6,500.00 payable and the full 100.00 and 4,000.00 receivables, and Differences reads 0.00.
03 · Create and approve the statement
Save. NetSuite creates a Netting Statement in Pending Approval with the netted amount and the transactions on each side. Its Netting Settlements subtab lists the settlements that approval will generate. A user with Netting Settlement Approval clicks Approve; the status changes to Approved and the four settlements are created and posted, provided the posting period is still open.
04 · Verify the settlements
Open a settlement. Applied To lists the related transactions and the amount applied to each, so you can trace the 4,100.00 back to the journal it settled; it's an accounting settlement, not a payment. GL Impact shows the accounting: the A/P settlement debits IC Accounts Payable and credits the IC Netting Clearing Account, and the A/R settlement does the reverse. Across the four settlements the clearing account nets to zero; in a multicurrency netting, look for realized or rounding gain and loss lines as well.
05 · Deal with what remains
Back on Balance Overview, the pairing shows 0.00 available and 2,400.00 of payable still open: the part of the 6,500.00 that had no receivable to net against. Work out why something is left, whether the balances were unequal, you chose to leave transactions out, or some weren't nettable, and settle the residual through your intercompany payment process if policy requires it. Netting doesn't do that part for you.
Common questions
What is the IC Netting Clearing Account, and why should it net to zero?
It's the system-generated account the four settlements post through. The A/P settlements credit it and the A/R settlements debit it, so for any completed netting it balances to zero in each subsidiary and at the consolidated level. A balance left in it means a settlement didn't post as expected; start from the settlements' GL Impact.
Why is Available for Netting lower than the intercompany balances?
It's the mutual amount that can settle, not the sum of the two balances. NetSuite takes the lower of the eligible payable and receivable amounts when both have the same sign, and anything unmatched, ineligible or offset by credits comes off first.
Why isn't an intercompany transaction nettable?
Netting needs matched intercompany transactions in the same subsidiary pairing and currency. A transaction drops out when it has no counterpart on the other side, is linked to several bills or invoices, or belongs to a relationship that doesn't meet the netting rules. A payable with nothing owed the other way can't be netted at all.
Does netting move cash?
No. It applies mutual payable and receivable balances through accounting settlements posted via the clearing account. Any residual is settled later through a normal intercompany payment.
Who can approve a netting statement?
A user whose role has the Netting Settlement Approval permission. Building the netting only needs the Netting Settlement permission, so the two steps can sit with different people.
What happens to the balance left after netting?
Only the matched amount settles; the excess payable or receivable stays open. Check the settlements and Balance Overview to see what's left, then net it in a later statement when a matching balance appears, or pay it the ordinary way.
Does netting work across currencies?
Balance Overview groups balances by subsidiary pairing and transaction currency, so two currencies never net together as one pairing. Where the subsidiaries' base currencies differ, the exchange rate on the workbench drives the settlement amounts and can create realized or rounding gains and losses on the settlement GL Impact.