How to run an amortisation schedule in NetSuite

Introduction

Accurate financial management is essential for businesses to thrive, and managing amortisation schedules is a critical part of this process. An amortisation schedule provides a detailed repayment plan for loans or deferrals, showing how payments are divided between principal and interest. For businesses that deal with prepaid expenses or deferred revenue, it helps systematically allocate costs or revenues over time instead of recognising them all at once.

If you're using NetSuite, you’ll find it equipped with powerful tools for handling amortisation schedules seamlessly. Follow this guide to set up and run an amortisation schedule in NetSuite effectively.

What is an Amortisation Schedule and why does it matter?

An amortisation schedule is a breakdown of each payment you make on a loan, showing how much goes toward the principal and how much is allocated to interest. Similarly, businesses use amortisation schedules for prepaid expenses, deferred revenue, and other financial transactions to ensure the gradual recognition of amounts over particular periods.

This process is vital for cash flow management, maintaining compliance with accounting standards, and improving expense visibility. NetSuite simplifies the process by integrating amortisation tools into its financial management suite, saving time and enhancing accuracy.

Step by step guide to running an Amortisation Schedule in NetSuite

Here’s a step by step outline of how to manage amortisation schedules in NetSuite:

Step 1: Activate the Amortisation feature

• Navigate to Setup > Company > Enable Features
• Go to the Accounting sub-tab and scroll down to the Revenue Accounting section near the bottom of the page
• Tick the checkbox next to Amortisation
• Save your settings

This ensures that NetSuite's amortisation functionality is available for use.

Step 2: Create an Amortisation Template

‍An amortisation template sets the guidelines for how amounts are allocated over time:

• Go to Lists > Accounting > Amortization Templates > New
• Provide a name for the template (e.g., "12-Month Straight-Line")
• Set the amortisation period, such as 12 months
• Choose the "Straight-Line" method or another method suitable for your needs
• Input the start date and establish any additional rules, like prorating if applicable
• Save the template

These templates ensure consistency and accuracy across multiple transactions.

Step 3: Apply the template to a transaction

‍You can now link the created template to relevant transactions:

• Navigate to Transactions > Purchases > Enter Bills (or another transaction type)
• Fill out the transaction details, such as vendor, amount, and items
• Open the Amortization sub-tab within the transaction and select the created template
• Set the start and end dates, then save your transaction

Using templates ensures that these transactions are correctly amortised.

Step 4: View the Amortisation Schedule

‍Once the template is applied, NetSuite will generate a schedule:

• View the transaction record and locate the Amortisation Schedule under the related records
• Open it to see how the amount is allocated across each instalment

This breakdown is easy to visualise and provides clarity on future expenses.

Step 5: Generate reports

‍To track all active amortisation schedules, leverage NetSuite’s reporting features:

• Go to Reports > Financial > Amortization Reports
• Adjust the filters by date, template, or related transactions
• Export the report if further analysis is required

These reports provide a high-level overview of your amortisation processes and help you catch inconsistencies early.

Tips for a smooth amortisation process in NetSuite

To ensure your process runs smoothly, keep the following tips in mind:

• Double check start and end dates to prevent mismatches
• Use well thought out templates to standardise your approach
• Review reports regularly to identify potential errors early
• Leverage NetSuite’s support resources when needed

Why choose NetSuite for amortisation management?

NetSuite’s robust amortisation tools simplify a process that is often tedious and error prone. Its templates eliminate redundant manual entries, while automated calculations save time and improve accuracy. Additionally, because NetSuite integrates amortisations with other financial processes, you gain a real time, centralised view of your financial health.

Managing amortisation schedules in NetSuite can be a straightforward experience that boosts efficiency and accuracy. By following the steps outlined here and using NetSuite’s reporting capabilities, you can ensure smooth handling of deferred expenses, revenues, and loan payments.