For our Asia-Pacific users, the term "Tenancies" is used, while our North American clients may be more familiar with the term "Leases". For more information on regional terminology, please refer to our Glossary of Regional Terminology.
Revenue recognition in NetSuite is a powerful tool that helps ensure compliance and accuracy in financial reporting by deferring and recognizing revenue over time. While most of the setup for revenue recognition happens in NetSuite itself, there are key elements Re-Leased customers need to configure so that invoices generated in Re-Leased integrate seamlessly with NetSuite’s Advanced Revenue Management (ARM).
Prerequisites (Configured in NetSuite)
Before enabling revenue recognition for Re-Leased invoices in NetSuite, ensure the following are already set up in your NetSuite environment:
- Advanced Revenue Management (ARM) enabled, including:
- Advanced Revenue Management (Essentials)
- Advanced Revenue Management (Revenue Allocation)
- Accounting Preferences configured for ARM (Revenue Arrangement and Plan update settings).
- Revenue Recognition Rule (e.g., Straight-Line Monthly) created.
- Service Item (e.g., Rent) with:
- Deferred Revenue Account assigned.
- Revenue Recognition Rule linked.
- Custom Fields for Start Date and End Date added to Sales Orders and mapped to ARM fields.
- Revenue Field Mapping configured to connect custom fields to Revenue Arrangement dates.
- Sales Order Form configured for tenancy/lease contracts.
Note: These configurations are typically handled by your NetSuite implementation partner. This article focuses on how Re-Leased interacts with that setup.
Setting Up Revenue Recognition for Rent Installments in Re-Leased
To enable NetSuite’s ARM for invoices generated by Re-Leased, each Rent Template in Re-Leased must reference the NetSuite Sales Order created for the tenancy/lease.
Required Fields in Re-Leased Rent Template:
| Field | Description |
|---|---|
| Sales Order ID | Internal NetSuite Sales Order ID for the tenancy. This must be entered manually in Re-Leased. |
| Item | The NetSuite Service Item linked to the Revenue Recognition Rule. |
| Start Date / End Date | The tenancy period dates, used for ARM scheduling. |
Note: Re-Leased does not currently automate the linking of Sales Order IDs. This must be manually added to each Rent Template.
One-Off Invoices with Manual Revenue Recognition
For ad hoc invoices (outside of recurring rent), you can still trigger revenue recognition if the following fields are populated on the invoice line in Re-Leased:
- Sales Order ID (matching an existing Sales Order in NetSuite).
- Item linked to a Revenue Recognition Rule.
- Start Date and End Date for the recognition period.
This ensures that even one-time charges can follow a defined revenue schedule in NetSuite.
Example: End-to-End Flow (Simplified)
- Create Sales Order in NetSuite: Set customer, item, tenancy/lease start/end dates, quantity (billing periods), and link to the Revenue Recognition Rule.
- Enter Sales Order ID in Re-Leased: In the Rent Template, paste the Sales Order ID into the Sales Order ID field. Ensure item and tenancy/lease dates match the Sales Order.
- Re-Leased Generates Invoice: Invoice syncs to NetSuite, linked to the original Sales Order.
- NetSuite Revenue Recognition Triggered: ARM creates Revenue Arrangements and Plans based on the Sales Order. Revenue is recognized evenly over the tenancy/lease duration.
Notes and Considerations
- The NetSuite Sales Order is the driver for revenue recognition — not the invoice.
- The item linked in the Re-Leased Rent Template must already have the correct Revenue Recognition Rule.
- If tenancy/lease dates or items change, updates must be made both in NetSuite and in Re-Leased to keep schedules aligned.
- Re-Leased currently supports a single Revenue Recognition Rule per invoice (line-level revenue recognition rules are not supported).
- For partial-month leases, slight variances in monthly recognition may occur; these are typically acceptable if documented for audit purposes.