If you’ve been in the business world for any length of time, you understand how critical accounting periods are to a company’s finances. With NetSuite’s Accounting Periods feature, you have access to everything you need to set up and use accounting periods. In this guide, we’ll dive into the multi-layered world of accounting periods in NetSuite. We’ll start with a broad overview of accounting periods and walk through the process of setting them up and using them on transactions. But if your accounting periods are already set up and you’re just here for an answer to a specific question, skip on down to the last section of the blog for our list of accounting period FAQs. Let’s get started!
Overview of Accounting Periods in NetSuite
What exactly are accounting periods? Accounting periods are a defined span of time used to group and organize a company’s financial transactions. One of the key benefits of accounting periods is that they give you greater control over when transactions post to the GL. Without accounting periods, transactions will automatically post to the GL in real time. With the accounting periods feature in NetSuite set up, however, you can select which accounting period each transaction posts in. The Accounting Periods feature also provides reporting on periods and a simplified closing process at the end of each period.
Setting Up Accounting Periods in NetSuite
Before using accounting periods, you’ll need to set them up. To do that, you’ll need to do these three steps: (1) enable access to accounting periods, (2) create fiscal calendars, and (3) create new periods.
Enable Access to Accounting Periods
To enable access to accounting periods in your NetSuite account, log in to NetSuite as the Administrator and navigate to Enable Features. Here, you’ll find the Accounting Periods feature under the Basic Features section of the Accounting tab. Check the box and save the page to turn on this feature.
Create Fiscal Calendars
Technically, this is optional. You can create fiscal calendars only if you have the Multiple Calendars feature enabled, and this feature is available only for accounts with NetSuite OneWorld. But assuming you do have NetSuite OneWorld, that you have enabled Multiple Calendars, and that you do want to use fiscal calendars, you would do that by navigating to Setup > Accounting > Manage G/L, Fiscal Calendars > New. On this page, you’ll name the calendar, choose the first month for that fiscal calendar, and determine whether or not this will be the default fiscal calendar. When a calendar is the default, new fiscal years and periods will automatically be created according to this fiscal calendar. Though of course, you would always have the option of switching the fiscal calendar manually.
Create New Periods
Now, it’s time to create new periods. You can do this from the Manage Accounting Periods page, which you can access by navigating to Setup > Accounting > Manage G/L > Manage Accounting Periods. On this page, you can either create a single accounting period at a time or you can create all the accounting periods in a single fiscal year. By far, the quickest method would be to create an entire fiscal year at once.
Let’s look at an example. We want to set up the fiscal year with all its periods for 2024. We have four quarters in the fiscal year with three periods in each quarter, each representing a single month. On the Manage Accounting Periods page, select the button Set Up Full Year.
This will take you to the Accounting Periods for Full Year page. Here, you’ll choose the fiscal calendar you will be using for this year and the format of the period (either in months, four weeks, etc.). The Fiscal Year End field allows you to choose the year this fiscal year will apply to. In our example, we would enter 2024 in this field. The Year in Period Name dropdown allows you to determine which year the period will be named by. If your fiscal calendar begins in January, then the content of this field is irrelevant. If, however, your fiscal year begins in one year and ends in the next year, then you’ll need to decide whether to name the period by the beginning year or the ending year.
After entering this information, select Save. Instantly, you have an entire year set up, including its quarters and individual periods.
If you happen to have extra time on hand to kill, you could also create each year, quarter, and period separately. That’s what the New Year Only, New Quarter Only, and Base Period buttons at the top of the page allow you to do. If you decide to go this route, you’ll want to make the year first, then the quarters, and then the individual periods. This is important because on the quarter setup page you’ll need to choose which year the quarter belongs to (so it had better already exist!), and on the period setup page you’ll need to choose which quarter the period belongs to. The end result, however, is going to be essentially the same as the option for setting up the full year. The main use case for setting up your periods individually would be if you have complicated quarters and periods that don’t fall neatly into specific weeks or months.
The Manage Accounting Periods Page
So far, we’ve seen an overview of what accounting periods are and how to create them in NetSuite. You’ve also gotten a bit of an idea of what the Manage Accounting Periods page looks like. Let’s take a minute to quickly explain everything we’re seeing on this page. Refer to the following picture throughout this section:
Filter Options
We’ve already explained the use of all the buttons at the top (except for Close Multiple Periods, but that does just what it claims to do and we’ll take a look at it later on). Directly under the buttons there are a couple different filter options. If you use multiple accounting books and multiple fiscal calendars, you can select the ones you want to view here in the filter region.
Adjusting the View
In the list of accounting periods, you’ll notice that you can collapse all the quarters and periods to just display the fiscal years. Alternatively, expanding a fiscal year will display the associated quarters and periods. There are also Expand All and Collapse All buttons. To view either a fiscal year, quarter, or period, select its name.
The Closing Checklist
Now, let’s look at all those columns following the period names. Notice that each period has a checklist icon in the Checklist column. Selecting this icon will take you to a page detailing all the tasks that are necessary to close that period. This checklist will help you stay on track when closing periods, ensuring that you don’t miss any essential closing steps.
Period Close Icons
Back on the Manage Accounting Periods page, if you see a green checkmark next to a period in the Period Close column, that tells you that all the period close tasks have been completed and the period has been closed. When a period is closed, the A/P Transactions, A/R Transactions, and All G/L Transactions columns will display an orange lock. This icon communicates that all these types of transactions have been locked in these periods and cannot be edited by users who don’t have advanced permissions. And if there is a check mark in the column Allow Non-G/L Changes, that means users can still edit non-posting transactions in this period.
Accounting Periods and Transactions
Now we’ve seen what accounting periods look like once they’ve been neatly closed and all the related transactions have been locked away. But how do you connect transactions to accounting periods in the first place? When you’re in the current accounting period (or a recent or future unclosed period), what does selecting those periods look like on various transactions?
First, it’s important to note that you won’t find a Posting Period field on non-posting transaction forms. And actually, if you’re curious about whether or not a transaction will post to the G/L, the presence or absence of the Posting Period field on the transaction is a pretty good giveaway. So, for example, you won’t be able to connect a purchase order to a specific posting period. A vendor bill, on the other hand, is definitely a posting transaction and would have a Posting Period field.
On transactions that contain the Posting Period field, you’ll be able to see a dropdown of all the periods that are still open, whether those are present, past, or future periods. As long as a period has not yet been closed, it is available for selection on transactions.
Some FAQs of Accounting Periods in NetSuite
Knowing how to set up accounting periods and understanding how accounting periods relate to transactions is all important. But we understand that additional questions will come up from day-to-day in an accountant’s life. So here are some of the “how to” questions you may encounter as you work with accounting periods in NetSuite.
How to edit or delete an accounting period in NetSuite?
Suppose you just want to edit or delete an accounting period. On the Manage Accounting Periods page, select the name of the period you want to edit or delete. This will take you to the Base Period page. To delete the period you selected, hover over the Actions dropdown and select Delete from the dropdown list. To edit any elements of the period, like the period name, start or end dates, and whether or not the period is an adjustment period, simply make your changes and then save the page.
Of course, editing or deleting a closed period or a period that already has transactions posted to it will make things more complicated. When a period has been closed, you will not be able to edit the start or end dates of the period. You also cannot delete a period if it has been closed or if it has transactions posted to it. To delete an accounting period that meets either of those criteria, you would need to open the period and/or change the accounting period associated with the transactions.
How to close an accounting period in NetSuite?
As we’ve mentioned, NetSuite provides a handy close checklist for you to follow. You can access this checklist from the Manage Accounting Periods page. The checklist includes things like locking A/R and A/P for that period. Depending on the features you use in your account, the list may be rather long and include things like creating intercompany adjustments and reviewing inventory activity.
To complete each task, you’ll select the icon in the Go To Task column. Note that some tasks have prerequisites that you need to complete first. Once every task has been completed, the Close task in the list will become available, you can select the link to mark that this accounting period is now closed.
NetSuite recommends that you work through the close checklist, but there is also a quick close option which would allow you to close periods with a single click. To use quick close, you’ll need to turn on the preference Allow Quick Close of Accounting Periods in Accounting Preferences. Then, the button Close Multiple Periods will become available on the top of the Manage Accounting Periods page.
How to reopen a closed accounting period in NetSuite?
What if you need to reopen a closed accounting period? Occasionally, you may find yourself in this position. If you need to make adjustments to G/L impacting transactions, then you’ll need to reopen the closed period first. To do that, locate the closed period in the Manage Accounting Periods list and select the checklist icon. Then, select the green arrow icon next to the Close task. On the page for this task, select the Reopen Period button at the top of the page. You will also need to provide a justification for reopening the period.
Note that reopening a period that has other closed periods following it will automatically reopen all subsequent closed periods as well. To close the period you reopened (and any following periods that also reopened), you will need to go through the regular closing process.
How to lock or unlock transactions in an accounting period in NetSuite?
You’ll remember from the discussion about closing accounting periods that you lock A/R and A/P transactions during the closing process. As you complete the steps to close a period, any A/R and A/P transactions that are associated with that period will be locked. What does that mean? When a transaction is locked, certain non-G/L impacting aspects of the transaction can still be edited. But to edit any G/L impacting aspects, you will first need to unlock the transactions in that period.
To unlock previously locked transactions, you will need to reopen the period (see previous point). Then, on the closing checklist, select the icon to go to the tasks for locking transactions. On this page, you can deselect either all your subsidiaries or just a single subsidiary in order to unlock transactions in that period. Then, click Submit.
Which roles can work with accounting periods in NetSuite?
The key permission you’re looking for here is Manage Accounting Periods. Users with either the Edit or Full level of this permission on their role will be able to create new accounting periods, while users with just the View level will only be able to view the accounting periods. Users who also have the Period Closing Management permission on their role can close periods.
Conclusion
Accounting periods in NetSuite are your secret weapon for maintaining financial order in your business. By understanding what they are, how to set them up, and how they influence various transactions, you’ll be well-equipped to navigate the financial landscape with confidence.
So there you have it – a comprehensive guide to accounting periods in NetSuite. If you’re ready for more in-depth NetSuite tutorials that will equip you along your journey to master NetSuite, subscribe to our mailing list below! We publish a new blog every week here on the website and you’ll receive that blog (along with some recommended previous blogs) right in our newsletter each week. See you there!