Set up Intercompany Loans and configure subsidaries for NetSuite clients

Set up the NetSuite OneWorld integration so Payroll can send journals and read your subsidiaries, chart of accounts, and locations.

1. Log in to your payroll platform.
2. Click on to Business.
3. Click on Settings.
4. Click on Integrations.
5. Select NetSuite / NetSuite OneWorld.
6. Click Connect and enter your NetSuite tokens/credentials.
7. From the Subsidiary drop-down, select the main subsidiary to use for the integration.
   Important: For NetSuite OneWorld, you must select a subsidiary here. If this field is blank, the Intercompany Loans section in Payroll will not load correctly.
8. Click Save.

For more detail on connecting, see Connecting to NetSuite & NetSuite OneWorld.

Import the chart of accounts and tracking dimensions (locations, departments, classes) so you can map them to Payroll.

1. Remain in Business > Settings > Integrations and open your NetSuite integration.
2. Use the available import options to bring in:
   • Chart of Accounts
   • Locations
   • Departments
   • Classes (if used)
   • Subsidiaries (for NetSuite OneWorld)
3. Wait for the import to complete, then review that the accounts and dimensions you expect are available in Payroll.

Link your NetSuite locations, departments and classes to Payroll locations so journals include the correct dimensions.

1. Log in to Employment Hero Payroll.
2. Click on ‌Business.
3. Click on Settings.
4. Click on Locations.
5. Edit a location.
6. Use the NetSuite fields to:
   • Select the corresponding NetSuite Location.
   • Select the relevant NetSuite Department and Class (if used).
7. Click Save and repeat for other locations.

For more detail, see Assigning NetSuite Locations, Departments and Classes to Payroll Locations.

Make sure NetSuite has the intercompany loan accounts that Payroll can use when creating intercompany journals.

1. In NetSuite, go to Lists > Accounting > Accounts.
2. Either:
   • Create new accounts to use as your Intercompany Loan accounts, or
   • Identify existing accounts that already serve this purpose.
3. Ensure each account:
   • Is of an appropriate type for intercompany balances (as advised by your NetSuite consultant).
   • Is active.
4. Save the account.

Tip: Your NetSuite/finance team should confirm the correct account types and naming conventions before making changes.

Confirm each intercompany loan account can be used by the subsidiaries that will appear in your payroll journals.

1. Open an intercompany loan account in NetSuite.
2. In the Subsidiaries field:
   • Select the specific subsidiaries that should use this account, or
   • Select the parent subsidiary and tick Include Children if you want child subsidiaries to use the same account.
3. Save the account.
4. Repeat for any other intercompany loan accounts you will use.

Why this matters: If a subsidiary is not listed on the account, NetSuite will reject journals that try to post to that account for that subsidiary (for example: Invalid account reference key X for subsidiary Y).

Tell Payroll which NetSuite accounts to use when an employee is paid from one subsidiary but works in another.

1. Log in to Employment Hero Payroll.
2. Click on ‌Business.
3. Click on Settings.
4. Click on Chart of Accounts.
5. Scroll to the Intercompany Loans section (available for NetSuite OneWorld integrations).
6. For each Source Subsidiary and Destination Subsidiary pair shown:
   • Select the appropriate NetSuite Intercompany Loan account.
7. Click Save.

The list of subsidiary pairs is based on:

• The subsidiary selected on the NetSuite integration tile, and
• The subsidiaries assigned at pay schedule and location level in Payroll.

For a public overview, see Setting up NSOW and Intercompany loans.

Before you configure anything, it helps to understand where subsidiaries are controlled:

• Integration tile (Payroll > Settings > Integrations)
  Sets the main subsidiary used for the NetSuite OneWorld integration.
• Pay Schedule (Source Subsidiary)
  Defines the “from” or source subsidiary for all employees paid in that pay run.
• Location (Destination Subsidiary)
  Defines the “to” or destination subsidiary for the employee’s work location.
• NetSuite GL accounts
  Control which subsidiaries can post to which accounts.

If an employee is paid from Subsidiary A (source) but works in a location mapped to Subsidiary B (destination), Payroll will generate intercompany entries using the mapped Intercompany Loan accounts.

Each pay schedule can specify which NetSuite subsidiary will be used as the source for journals created from that pay run.

1. Log in to Employment Hero Payroll.
2. Click on ‌Business.
3. Click on Settings.
4. Click on Pay Schedules.
5. Edit the pay schedule you want to configure.
6. Scroll to the NetSuite/NetSuite OneWorld section.
7. From the Source Subsidiary drop-down, select the subsidiary that should be used for this pay schedule.
8. Click Save.

Best practice: Use a separate pay schedule for each subsidiary. Mixing employees from multiple subsidiaries in the same pay run can lead to complex intercompany journals that may not be supported by the integration.

Each payroll location can be mapped to a specific NetSuite subsidiary. If that subsidiary differs from the pay schedule’s Source Subsidiary, intercompany loan transactions are triggered.

1. Log in to Employment Hero Payroll.
2. Click on ‌Business.
3. Click on Settings.
4. Click on Locations.
5. Edit a location.
6. In the NetSuite section:
   • Select the Subsidiary this location belongs to.
   • Confirm the mapped NetSuite Location, Department and Class if applicable.
7. Click Save and repeat for all locations.

Example: If a pay schedule’s Source Subsidiary is “AU” and an employee’s location subsidiary is “NZ”, the journal will include intercompany lines between “AU” and “NZ” using the Intercompany Loan accounts you mapped earlier.

If the Intercompany Loans mapping area in Business > Settings > Chart of Accounts is blank or fails to load:

1. Check the NetSuite integration tile:
   • Confirm a Subsidiary is selected on the integration itself.
2. Ensure you have imported:
   • Subsidiaries
   • Chart of Accounts
3. Confirm that intercompany loan accounts in NetSuite are active and assigned to the relevant subsidiaries.

Once these are in place, return to the Intercompany Loans section and reload the page.

This status usually means Payroll expected intercompany loan mappings, but none were configured.

1. In NetSuite, confirm that:
   • Intercompany loan accounts exist, and
   • They are assigned to the correct subsidiaries.
2. Log in to Employment Hero Payroll.
3. Click on ‌Business.
4. Click on Settings.
5. Click on Locations.
6. Click on Chart of Accounts.
7. Click on Intercompany Loans.
8. Map each relevant Source Subsidiary and Destination Subsidiary pair to the appropriate NetSuite account.
9. Save and re-export the pay run.

You may see NetSuite errors similar to:

• Invalid account reference key X for subsidiary Y
• The subsidiary in the first line is restricted to From Subsidiary
• Or messages indicating debits and credits do not balance for each subsidiary.

1. In NetSuite, open the GL account mentioned in the error (if specified).
2. Check the Subsidiaries list on that account:
   • Make sure the subsidiary from the error message is included (or covered by a parent with Include Children ticked).
3. In Employment Hero Payroll, review:
   • Pay schedule Source Subsidiary.
   • Location subsidiary assignments.
4. If an employee has earnings across locations that belong to different subsidiaries in the same pay run, consider:
   • Adjusting their locations, or
   • Splitting them across separate pay runs so each run only involves one source subsidiary.

If the error persists, your NetSuite/finance team may need to review the full journal and adjust NetSuite’s intercompany configuration.

If you are looking for further ideas, try our community.

Hero Connect is currently only available for HR-only and HR+Payroll customers. Hero Connect is not yet available for Payroll-only customers. .

NetSuite requires intercompany journals to have at least four lines: one debit and one credit for each subsidiary involved. If your payroll journals span multiple subsidiaries in a single pay run, make sure your NetSuite configuration and Intercompany Loans mappings can support this, or consider splitting pay runs by subsidiary.

Employment Hero controls how payroll data is structured, but NetSuite controls whether journals are accepted. For complex multi-entity structures, we recommend working with your NetSuite implementation partner or finance team to confirm account and subsidiary setup before turning on intercompany loans.