NetLease - NetSuite Accounting Preferences

Overview

By default, NetLease determines the transaction date for monthly entries based on the date of the associated schedule line. For instance, if an amortization entry is tied to a July 2025 schedule line, the transaction will be dated in July 2025.

The exact transaction date varies depending on the type of journal entry. Amortization, modification, closeout, and termination entries will default to the last day of the month (e.g., July 31). However, this behavior can be changed by adjusting the “Default Lease Transaction Booking Day” setting to use a different day of the month, such as the 15th.

Some transaction types follow different rules. Initial balance entries use the lease commencement date as the transaction date. Go-live entries are dated using the go-live date. Reclassification entries are booked on the last day of the corresponding accounting period.

Unless the native NetSuite accounting settings are configured appropriately, transactions dated within a closed accounting period will trigger an error, and the related lease journal entries will not be created.

To prevent this issue and allow the transactions to post, the following two settings must be configured:

1. Allow Transaction Date Outside of Posting Period – This must be set to Warn or Allow.
2. Default Posting Period When Transaction Date In Closed Period – Either First Open Period or Current Period can be selected; both options will allow the journal entries to be recorded.

Refer to the instructions below for steps to enable these settings.

Step-by-Step Process

• Navigate to Setup > Accounting > Accounting Preferences.
• Under the General subtab, review and update the settings in the General Ledger section as follows:
  • Allow Transaction Date Outside of Posting Period: Allows transactions to be dated outside the range of the selected posting period. This setting is required for recording historical transactions with dates in closed periods and should be set to Warn or Allow to ensure lease journals can post. 
  • Default Posting Period When Transaction Date In Closed Period: Determines how the system handles backdated transactions. Selecting Current Period will post the transaction to the current period, while First Open Period will post it to the earliest available open period. Either option enables lease journal posting, but First Open Period is recommended.

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• If any settings were modified, click Save to apply the changes.

Illustrative Examples

To demonstrate how system behavior varies based on configuration and timing, consider the following examples: 

Assume the current date is August 4, 2025, and amortization entries for July 2025 are being generated as part of the period close process. 

• If the July 2025 accounting period is open, the system will post the transaction with a transaction date and posting period in July 2025.
• If the July 2025 period is closed and the "Allow Transaction Date Outside of Posting Period" setting is not enabled, the transaction will fail to post. NetSuite will return an error because, with this setting disabled, a transaction dated in July can only be posted to the July posting period, which is closed. Posting to an alternative period is not permitted unless the setting is enabled.
• If the July 2025 period is closed and the setting "Allow Transaction Date Outside of Posting Period" is enabled, the system will allow the transaction to proceed. The transaction date will remain in July, but the posting period will be determined by the "Default Posting Period When Transaction Date In Closed Period" setting. If both the Current Period and First Open Period are August 2025, the transaction will post to that period.

In a separate scenario, assume the current date is September 4, 2025, and amortization entries for both July and August 2025 are being generated. The July 2025 period is closed, while August 2025 is open.

• If "Default Posting Period When Transaction Date In Closed Period" is set to Current Period, the July transaction will have a transaction date in July and a posting period of September 2025, since September is the current period. The August transaction will have both a transaction date and posting period in August 2025.
• If the setting is configured to First Open Period, the July transaction will retain a transaction date in July, but will post to August 2025, the earliest available open period. The August transaction will again post with both a transaction date and posting period in August 2025.