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 In the context of accounting, the bound ledgers, manual labor, and calculators have been replaced by modern cloud-based solutions.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 outlines the steps to open or set up an accounting period in NetSuite, enabling users to keep their financial operations running smoothly.
An accounting period is a period of time during which financial transactions are recorded systematically 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 latter two are used as segments of the fiscal year for reporting and auditing purposes.
Accounting periods ensure that all transactions are recorded in the appropriate time frame, enabling accurate financial reporting and analysis. This is important for maintaining the integrity of financial data, which, in turn, 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 improve performance, make informed decisions, comply with regulations, and meet reporting requirements.
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, specifying the month the fiscal year starts or ends.
However, you can 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 and quarterly accounting 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 once it's closed, but you can edit and manage them.
Once the period is closed, it's considered complete, and no one can make any changes to the general ledger, which could subsequently affect posting transactions for that 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, 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 have 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 has been completed, preventing anyone from posting to the general ledger for any dates within that 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, accountants can't post any transactions for dates within that period unless they reopen it. 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 transactions in Accounts Payable, Accounts Receivable, and Payroll (if enabled), as well as the Lock All options.
Managing accounting periods is a significant responsibility because missteps can lead to significant financial repercussions for a business, making it a particularly stressful process.
Fortunately, NetSuite automates the majority of data acquisition, entry, and management across the entire organization and its operational processes, including 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.
