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How to close a period in NetSuite

Creating, managing and closing periods in NetSuite

Introduction

Effective financial management relies heavily on robust processes for creating, managing, and closing accounting periods. For businesses utilising NetSuite, mastering these processes is key to maintaining data accuracy, ensuring regulatory compliance, and upholding financial integrity. This blog will take you through the essentials of period management in NetSuite, offering step by step guidance, best practices, and tips for troubleshooting common challenges.

Why period management is crucial

Accounting periods serve as the backbone of any financial system. They provide the structure for recording transactions and generating reports, ensuring that financial activities are organised and traceable. Poor period management can lead to misstatements in financial reporting, unauthorised transactions, and compliance risks. With NetSuite's robust tools for managing accounting periods, businesses can streamline their workflows while safeguarding financial data.

Creating accounting periods in NetSuite

The first step in period management is setting up accounting periods. NetSuite allows you to define fiscal years, quarters, and months to match your business's reporting calendar.

Here’s a step by step guide to creating periods in NetSuite:

Step 1: Enable accounting periods (one-time setup)

  • Go to Setup > Company > Enable Features and under the Accounting sub-tab, ensure that Accounting Periods is checked
  • Save your changes

Step 2: Access the manage accounting periods page

  • Navigate to Setup > Accounting > Manage Accounting Periods

Step 3: Set up a fiscal year

  • Click New Fiscal Year
  • Enter the fiscal year name (e.g. 2025) and the start date. NetSuite will automatically populate the fiscal period dates
  • Choose whether to allow adjustments before saving the fiscal year

Step 4: Define quarters and periods

  • You can review or customise individual period names and dates based on your reporting structure
  • Save changes to finalise the fiscal year, quarters, and periods

Managing open periods

Once you've created accounting periods, managing their status is essential to maintain the integrity of your data. Here's what you need to know:

Opening, closing and locking periods

  • Accounting periods can be marked as open, closed, or locked depending on your operational needs:
    • Open Periods are free for all users post transactions into
    • Locked Periods allow for for final adjustments prior to the period being closed. Only users with specific permissions can make changes to transactions in locked periods
    • Closed Periods don't allow any further changes that affect the general ledger to be made to transactions posted within them
  • Navigate to Setup > Accounting > Manage Accounting Periods, locate the period you want to manage, and click its status to update it

Restrict posting to open periods

  • Ensure transactions are posted only to open periods. This minimises errors and prevents backdated entries from disrupting prior reports

Set posting preferences for your NetSuite instance

  • Go to Setup > Accounting > Accounting Preferences to specify how users are able to post transactions outside of open periods

Handle adjustments

  • For legitimate, after-the-fact adjustments (such as audit entries) ensure proper approval workflows are followed before reopening a period

Best practices for managing open periods

  • Implement role-based permissions Restrict access to sensitive period statuses based on user roles. Only users with appropriate permissions should be able to modify period statuses
  • Conduct period reviews regularly Before closing a period, review outstanding transactions, reconciliations, and reports for any discrepancies
  • Utilise scheduled workflows Automate certain accounting tasks, like recurring journal entries, to ensure entries are posted to the correct periods without manual intervention

Closing accounting periods in NetSuite

Closing an accounting period is the final step in period management. It ensures that once reports are generated, no further entries can be made to that period.

Follow these steps to close a period:

Step 1: Complete the period close checklist

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For each period, NetSuite provides a Close Checklist that includes key tasks like:

  • Reviewing open sales and purchase orders
  • Finalising bank reconciliations
  • Running depreciation for fixed assets
  • Consolidating financial reports (if applicable)

Step 2: Perform final reviews

  • Generate and review financial statements like balance sheets and income statements
  • Verify that all month end journal entries are posted

Step 3: Close the period

  • When all items in the checklist are complete, you can mark the period as Closed
  • Once closed, no further edits or new transactions can be posted to that period

Audit trail

  • NetSuite automatically records actions taken on periods, creating an audit trail for compliance and internal reviews

Tips for troubleshooting period close issues

  • Review the close checklist If you cannot close a period, verify that all required tasks in the checklist are marked as complete
  • Check permissions Ensure you have the necessary permissions to manage the period status
  • Investigate outstanding transactions Run reports to identify and address uncleared transactions, such as unapproved journal entries or pending reconciliations
  • Leverage NetSuite support tools Use saved searches or reports to pinpoint discrepancies that could prevent a seamless close

The bigger picture: financial integrity through period management

Proper management of accounting periods in NetSuite goes beyond compliance, it reinforces the accuracy and trustworthiness of your financial records. By closing periods regularly and adhering to consistent workflows, businesses are better positioned to make strategic decisions, respond to audits, and maintain stakeholder confidence.

Final thoughts

NetSuite’s accounting period functionality offers a powerful framework for managing your financial timeline. By following the steps and best practices outlined above, you can streamline your workflows, which allows your accounting teams to focus on strategic initiatives rather than time consuming manual fixes. Remember, maintaining financial integrity starts with disciplined period management.

Master these principles, and you’ll be well on your way to better organisational financial health.