Efficient financial management has always been a crucial aspect of any business, but the tools necessary for business operations have changed. In the context of accounting, the bound ledgers, manual labor, and calculators have been replaced by modern cloud-based solutions.
While financial tools have changed, the mission hasn't: manage your business's resources well, use them wisely, keep your financial operations in check, optimize your processes for more efficiency, and expand.
This guide discusses the steps necessary to open or set up an accounting period in NetSuite, which allows users to keep their financial operations running seamlessly.
An accounting period is a timeframe for which financial transactions are recorded in a systematic manner and later reported. Depending on the company's fiscal calendar and accounting policies, an accounting period can be a month, a quarter, or a year; the former two are used as segments of the time within the fiscal year for reporting and auditing purposes.
Accounting periods ensure that all transactions are recorded in the appropriate time frame, which allows for accurate financial reporting and analysis. This is important for maintaining the integrity of financial data, which subsequently impacts the efficiency of your business operations.
NetSuite, a cloud-based business management software, allows you to streamline your operations and improve your efficiency by helping you track your finances and operations. It allows businesses to leverage real-time data to increase business performance, make informed business decisions, comply with regulations, and meet reporting needs.
To successfully open and manage accounting periods in NetSuite, users need to enable this functionality.
To do so, go to Setup > Accounting > Manage G/L > Manage Accounting Periods. From there, you can set up the accounting period as a Full Year, marking at which month the fiscal year starts or ends.
However, there are options for you to set up periods one at a time, such as selecting the New Year-Only, New Quarter-Only, or Base Period option. In either case, enter the period name and select the first and the last date of said period. The same technique applies to both single accounting periods and quarterly periods.
It's worth noting that you can edit or delete an accounting period after it has been created and set up. You can't delete an accounting period after it has been closed, but you can edit and manage these periods.
Once the period is closed, it's considered complete, and no one can make any changes to the general ledger, which could subsequently impact changes to posting transactions for said period. If a closed period requires changes, it has to be reopened before those changes can be implemented.
To open the closed accounting periods in NetSuite, you must have the "Override Period Restrictions" permission granted by the system administrator. To reopen a closed accounting period, simply go to Setup > Accounting > Manage G/L > Manage Accounting Periods and click on the Checklist icon for the period.
Next, go to the Close Accounting Period page and click on "Reopen Period." Enter the text in the Justification field explaining why you're reopening said period, and click on "Reopen Period" once again. It's worth noting that you may need to redo the entire checklist of tasks to close the period you previously opened.
After you made all the necessary changes and edits to the company's freshly reopened accounting period, you can close it quickly using the Quick Close option, which expedites the entire closing process. With that said, Quick Close demands special permissions, ensuring that only authorized personnel are able to reopen and edit particular accounting period tasks.
Here are some frequently asked questions related to accounting periods in NetSuite:
Closing an accounting period in NetSuite means changing its status from "Open" to "Closed." This means that posting transactions for a particular accounting period have been completed, preventing anyone from posting to the general ledger for any dates that are included in this period.
Closing an accounting period is the final step in the process, following account reviews and reconciliation that otherwise ensure correctness and balance.
Once the accounting period is closed, the accountants won't be able to post any transactions for any dates included in said period unless they reopen. Reopening, however, requires special permissions from administrators, ensuring that only the authorized personnel have access and permissions to edit previously closed accounting periods.
Once the necessary edits and revisions to the accounting periods have been made, they can be closed again either manually or by using the Quick Close function, which also requires adequate permissions.
Period Checklist is basically a list of tasks accountants need to complete for a specific period if they want to close it. This includes reconciling and locking all the transactions within Accounts Payable, Accounts Receivable, Payroll (if enabled), and Lock All options.
Managing accounting periods takes a lot of responsibility because missteps pose a risk of significant financial repercussions for a business, which makes managing and closing accounting periods particularly stressful activities.
Fortunately, NetSuite automates the majority of data acquisition, entry, and management across the entire organization and its operational processes, including those associated with sales, services, employee management, and inventory management.
To reduce the bottlenecks and stress associated with your NetSuite accounting operations, consider outsourcing your accounting to an award-winning team of NetSuite accountants. Contact ScaleNorth to learn more.
