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Transaction Amortization for NetSuite

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Summary

What is is

Ramp supports amortization for transactions with our NetSuite integration. We do this by automatically pulling in your already existing Amortization Templates they have configured in NetSuite and then allowing you to choose which transactions you want to amortize. 

 

Why we built it

Amortization provides our customers with lots of business value.

  1. Accurate Financial Reporting: By amortizing intangible assets over their useful lives, a business ensures that its financial statements more accurately reflect its operating performance and financial position. This systematic write-off aligns the expense recognition with the period during which the intangible asset is expected to contribute to the company's revenue-generating activities.
  2. Tax Benefits: For tax purposes, amortization serves as a non-cash expense that reduces the company's taxable income. By amortizing certain intangible assets, businesses can reduce their taxable profits, leading to lower tax liabilities.
  3. Budgeting and Planning: Understanding the amortization schedules of various intangible assets helps businesses in budgeting and financial forecasting. Knowing the future amortization expense can aid in cash flow projections and overall financial planning.
  4. Cost Allocation: Amortization helps in spreading the cost of intangible assets over several periods. This allocation ensures that a particular period isn't burdened with the entire cost, especially if the benefit from the asset is derived over multiple periods.
  5. Decision-making: Understanding the remaining value of an intangible asset (after accounting for accumulated amortization) can inform decisions related to asset disposal, renewal, or further investments.
  6. Compliance: Many accounting standards and regulatory bodies require businesses to amortize certain intangible assets. Properly accounting for and reporting amortization is essential for compliance with these standards.

How it works

The Details

Accounting Impact

We will sync the credit card expense as a Bill and a Bill Payment because NetSuite only allows you to set amortization templates to Bills.

*Main call out: bill payment should set payment account to Ramp Card account

    1. Bill
  1. Credit AP Account (Increases Liability)
  2. Debits Pre-paid expense account (increases Asset)
    1. Bill Payment
  1. Debit AP Account (Decreases Liability)
  2. Credit Ramp Card account (Increases Liability)

Amortization journals are then handled by NetSuite

    1. Amortization journals
  1. Debit expense account (Increase expenses)
  2. Credit pre-paid expense account (Decrease Asset)

FAQs

Do I need to have Bill Pay enabled?

No, this works independent of Bill Pay.

Where do I find the transaction?

Two main ways you can find the transaction:

    • On Ramp, navigate to the synced transaction and click the "View in NetSuite" button in the header. This will navigate you to the bill in NetSuite.
    • On NetSuite, go to Transactions -> Payables -> Bills -> List.
      • Find the relevant bill by searching for vendor, amount or other details of expense.

Do we support amortization for credit card transactions and reimbursements?

Just credit card transactions, reimbursements are coming soon!

Are we able to split an amortized credit card transaction?

This is not available today, but is coming soon!

What accounts are used in the bill for Amortization?

On Ramp, you specify a General Ledger Account, the amortization template, start date and end date. On the amortization template (on NetSuite), you specify other info including a Deferral Account and a Target Account.

Additionally, a General Ledger Account may have a deferral account specified within NetSuite (in the account page)

The General Ledger impact for the bill will be:

    • Bill
      • Credit AP Account (Increases Liability)
      • Debits Deferral Account (increases Asset)
        • Deferral account specified in Amortization Template (if it exists)
        • Otherwise, deferral account tied to Target Account specified in Amortization Template (if it exists)
        • Otherwise, deferral account tied to GL Account specified in Ramp (if it exists)
        • Otherwise, error will arise
    • Bill Payment
      • Debit AP Account (Decreases Liability)
      • Credit Ramp Card account (Increases Liability)
    • Journal Entires
      • Credits Deferral Account (Decreases Asset)
      • Debits Expense Account (Increases Expense)
        • Expense Account used is "Target Account" specified in Amortization Template (if it exist)
        • Otherwise, account specified in Ramp / on the bill that was synced over
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