Accounting period close management in NetSuite is a structured process designed to ensure accuracy and compliance with accounting standards. Here’s an overview of how it is done:
1. Accessing the Accounting Period Close Feature
- Navigate to Setup > Accounting > Manage Accounting Periods.
- This page provides a list of accounting periods for the company, including their status (Open, Closed, Locked, etc.).
2. Defining Accounting Periods
- Accounting periods are created based on your company’s fiscal year setup.
- Ensure fiscal calendars are properly defined under Setup > Accounting > Fiscal Calendars.
3. Review the Close Checklist
Each accounting period comes with a Close Checklist, outlining the tasks required to close the period. Typical tasks include:
- Approve Revenue Commitments (for companies using revenue recognition).
- Revalue Foreign Currency (if multi-currency is enabled).
- Review General Ledger Exceptions.
- Post Adjustments.
- Close the Period.
4. Locking Transactions
- Before closing, lock transactions for the period to prevent new entries or changes.
- You can do this by marking the “Allow Non-G/L Changes” option under the period settings, depending on the level of restriction needed.
5. Completing Required Tasks
Tasks in the checklist must be completed or marked as done. Key tasks include:
- Reconcile Accounts:
- Use NetSuite’s Reconciliation Reports for cash, accounts receivable, and accounts payable.
- Run Final Reports:
- Generate trial balance, profit & loss, and balance sheet reports to ensure all accounts reconcile.
- Post Adjustments:
- Post any final journal entries for accruals, depreciation, or error corrections.
- Revalue Foreign Currency:
- Run foreign currency revaluation if using multi-currency.
6. Closing the Period
- Once all checklist tasks are completed, click Close Period.
- After closing, no transactions can be entered or edited for that period unless it is reopened.
7. Managing Period Exceptions
- Use Period Close Exceptions Reports to identify and resolve issues preventing period closure.
- Common exceptions include unapproved revenue arrangements, unbalanced journal entries, or incomplete transactions.
8. Reopening a Closed Period (If Necessary)
- Navigate back to Manage Accounting Periods.
- Click on the closed period and select Reopen Period.
- Reopening should be limited to cases where significant corrections are required.
9. Automating Notifications
- Set up alerts for the finance team to notify them of pending tasks or deadlines for period closing.
Key Features Supporting Close Management
- Close Checklist Automation: Automatically tracks task completion.
- Reports and KPIs: Real-time visibility into the financial health during the period close process.
- Audit Trail: Every action during the close is logged for compliance and audit purposes.
By following these structured steps, NetSuite ensures an efficient, accurate, and compliant accounting period close process