How to Close Book in NetSuite
Updated: Dec 10, 2021
When we finished reading a book, we would wrap the story to a conclusion and leave it closed. In accounting, it is not any much different.
The term “closing the books” is referring to an accounting procedure that occurs at the end of each month or year according to the designated company period, and at the end of each year. The word “books” in this activity means company’s record of financial transactions.
In a business, every financial transaction is recorded to later be reported in monthly or annually period. Closing the book helps ensure that the data input into accounting records are accurate so the reports would be secure from any errors. It prevents users from posting more entries to the sub-ledgers and general ledger for the previous year, providing a final position for the financial year. These whole processes from recording to finalising reports were usually done manually in a book or spreadsheets. That; before the era of Cloud ERP.
Why Automate The Closebook?
Thanks to technology, the close has been getting steadily faster according to Ventana Research. According to Floqast, in 2014 of companies surveyed 58% took seven or more days to close, and 28% needed eleven days or more. Only 29% were closing within four days. But in their 2019 survey, only 49% needed seven or more days, and nearly half (46%) were closing in four days.
With optimised process of digital accounting in Cloud ERP, policies and procedures have been standardised to simplify accounting through data captured in the field, streamline tasks by identification of dependency, and to make stronger upstream data integration. The automation also helps in boosting account reconciliation process up to 50%, match the transactions and reduce the possibility of late reconciliations and makes more accurate reports to avoid too many reconciliation rejections. Also, it is paperless.
Closing A Book in NetSuite
There are several important things to consider before closing the books in NetSuite. Before heading on to the process, it is important to prepare and double check if there are incomplete transactions somewhere. There are not many additional year-end tasks required in the system but there are a few considerations to make such as reporting process and record management. Overall, the NetSuite close process will become easy and painless after just a few months of getting the hang of it.
Managing Accounting Periods
Period Setup: A fiscal year and base periods must be created prior to entering transactions in NetSuite. A key selection when setting up a fiscal year is your period format. The three options are standard calendar months, 4 Weeks, and 4-4-5 Weeks.
Once your fiscal year is setup you can decide whether or not to allow for Non G/L Changes to transactions in a closed period. This checkbox selection is made on a period by period basis within a fiscal year. An Example of a Non G/L change is updating the memo field on a vendor bill.
When viewing your accounting periods on the Manage Account Periods page you’ll notice that a period will be in one of the three following states:
Unlocked: No restrictions on the posting of transactions.
Locked: Only users with the Override Period Restriction permission can create or modify transactions.
Closed: No users, including Administrators, can post or make G/L impacting changes to transactions.
3. Here’s some additional information in regards to locking and closing periods: