Setting up NetSuite’s Multi-Book Accounting functionality requires selecting an “Effective Period.” Before the Effective Period of a book, no transactions can be posted in that book. The Multi-Book documentation and some of the screens in the NetSuite user interface may lead you to believe that you can’t post in any book before the Effective Period of the secondary book(s). In fact, you can! Read on to see what it looks like, and how you can safely cross the boundary (and get back alive).
We recently had a US-based client initiate operations in Ireland. They registered as a business, got a tax ID, leased office space, and started hiring people. Because the Ireland operations were cost-only – they had no plans to generate revenue in Ireland, now or ever – their accounting firm recommended that the Ireland entity be treated as a stand-alone subsidiary in NetSuite, with a base currency of USD. While most of the transactions would be Euro-denominated, for reporting and consolidation purposes, we wanted the base currency of the subsidiary to be US dollars.
In order to comply with local Irish reporting requirements, we used Multi-Book to create a secondary book denominated in Euros. The secondary book only applies to our Ireland entity.
When you create a secondary book, NetSuite asks you to select the Effective Period for that book. You may not post transactions in the book before the start of its Effective Period. You may not change an Effective Period after a transaction has been posted in the book.
Because our client was initiating operations in the country effective February 1, we chose February 2022 as the Effective Period for the Secondary Book. In hindsight, this choice made things more complicated than they needed to be, but at the time, our client’s leadership was highly focused on the risk of erroneous entries on the Ireland books.
The rollout was smooth: as soon as the January close was complete, we enabled the secondary book. Since the subsidiary was net new, we didn’t have any opening balances, and no Historical Transaction Processing (HTP). Smooth sailing through calm seas.
Sometime later, the accounting staff at this client contacted us and said, “We’re trying to open January and post some transactions, and we don’t seem to be able to. The Period Close checklist is still showing the period closed no matter what we do, and it’s making reference to the Secondary Book still being closed even after we open the period.”
Hmm, strange. These are ordinary US transactions, with no relationship to Ireland at all, much less the Secondary Book. Time to check the manual.
A quick review of the Multi-Book Guide showed us, “You cannot make general ledger impacting changes in an open accounting period that precedes the effective date of the secondary book.” It also says, “You cannot reopen a closed period prior to the effective period of this secondary book.”
It seems like, maybe, we just…can’t post to January now? Because the Secondary Book is, like, in the way or something?
I think most people who have done work have made a mistake like this, and can relate to the feeling I had in my stomach upon reading that. For those who haven’t: it felt bad, like the feeling of going to an amusement park, having a couple corn dogs or whatever, and then going on one of the rides. Kind of a sick-to-the-stomach feeling made out of bad decisions.
Right, then. OK. So we need to tell the client that we goofed. Probably going to have to delete all the transactions in the book, then delete the book, then post the January entries, then recreate the book, then re-create all the entries we deleted…[REDACTED] careless [REDACTED] NetSuite and [REDACTED] stupid accounting books! [REDACTED] weekend gone, [REDACTED].
Hang on wait, let’s just test it out here. It’s already broken, right?
OK, open periods, here we go:
Oh, that’s weird, look at the accounting period list. I tried to reopen January, and January looks closed, but February looks partially open?
Hmm, actually when I hover on January, it says the Primary Accounting Book is open too. Let’s switch the Accounting Book filter: Aha! January indeed was reopened.
OK, that looks better. Let’s post this entry:
What the…? It doesn’t show January! Back to the manual… oh. Here. It says, “Note that if you have enabled the Extended Accounting Period Close Process feature, you can reopen this period and post book-specific transactions. You cannot post book-generic transactions.”
OK, let’s try to post to January using a Book-Specific Journal Entry. (Book-Specific Journal Entries are just what they sound like they would be. A regular Journal Entry (or other transaction!) in a subsidiary with a secondary book will automatically create a matching transaction in the Secondary Accounting Book. If you create a Book-Specific Journal Entry, you’ll select one and only one Accounting Book to post to.
Anyway, let’s try it out:
Huzzah! Indeed, we can cross the Effective Period boundary and post transactions, but only if we use Book-Specific Journal Entries and select the Primary Book. The documentation seems to say that you just can’t do it, but as occasionally happens in life, if you just ignore the signposts and charge ahead, you can bash right through and do it anyway.
January postings made, January and February re-closed, client mollified.
Now, in general, you want to select the earliest possible Effective Period for your secondary book. And it’s worth noting that all of this work and testing was done in a NetSuite instance where the Inventory feature is not enabled. The Multi-Book documentation also appears to indicate that, in an Inventory-enabled environment, the Effective Period boundary is… firmer. YMMV.
Lastly, this client really had an “Easy Button” Multi-Book requirement, because the only legal entity that needed a Secondary Book came into being at the same time as the book itself. We didn’t have to get involved in HTP, which is a whole thing.
Note also that users who are posting a Book Specific Journal on the wrong side of the Effective Period Rubicon need to have “Override Period Restrictions” permission, even if A/P and A/R are opened in the period/book.
Crossing the effective period boundary is a quirky little thing, and the documentation is just ambiguous enough to be confusing (or I’m dim-bulbed enough to be easily confused). However, as I illustrated, it is indeed possible:
You can post to the Primary Book in a period before the Effective Period of the Secondary Books provided you post a book-specific transaction.
Also, in order to get an accurate picture of what’s going on, you need to use your Book filters in the Period Close Checklist screen. I hope this helps!
I rate this 6.4 out of a possible 10 NetSuite Estotericas (NSEs). What’s your highest NSE finding? Let’s know in the comments’ section below!
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