Introduction to Fiscal Accounting Time Periods
(This discussion applies to the fiscal time periods, and is not necessarily relevant to special types of time periods.)
Time periods are used to define the date ranges of fiscal periods for Accounting and Sales Forecasting purposes. Time periods that are available for recording new accounting or forecasting entries are "open". When all accounting is completed after the end of a time period, it is customary to 'Close' the time period so that no more entries can be made to that period. This preserves the state of all data in that period and helps to avoid any accidental changes to periods which have been finished or audited.
Time Periods Control Posting to Accounts
Time periods control the posting to the past and the future:
- when a past time period is closed, no transactions can be posted to it.
- If a future time period has not been created yet, then no transactions can be posted to it either.
Thus, Forecasting will not work correctly if a forecast would span into a Time Period that has not been opened yet. When a future time period is created, it is automatically considered “open” and available for posting. This can be modified fairly easily if you want to control them further.
Using the Time Periods
Time Periods are configured as follows. To access Time Periods from the Main Navigation screen, proceed as follows:
Click: [Financials] Icon > [Configure] Tab > [Time Periods] button The "Time Periods" screen opens. To Add a New Time Period use the box at the bottom of this screen. Refer to the steps described at Time_Periods#Create_a_New_Time_Period.
Time Period Duration and Format
You can have as many time periods as you need, including fiscal years, quarter, month, bi-weeks. The time periods have beginning and ending dates but not times--all time periods are assumed to begin and end at exactly midnight of its date.
Correct Alignment of Time Periods
The beginning or ending dates for time periods of different durations are aligned, so that when two or more of them coincide (for example a month, a quarter, and a year) they will all begin on the same date. Also, the end of one time period is equal to the beginning of the next one. Thus, a fiscal year which spans the calendar year 2007 should begin on 2007-01-01 and end on 2008-01-01 (it would not end on 2007-12-31).
Create a New Time Period
Fill in the form as explained to add a new Time Period. It is best to enter the long duration period first, for example the year, and then follow with entry of the shorter periods, for example the quarter, working down to enter the shortest period last. When finished with the entries, check any existing Time Periods to make sure your new one fits into the alignment of all the dates, then remember to click [Create] to finish and save the new Period.
- Parent Period Id -- Select the existing Period which contains the one you want to add next. (For a new quarter, select the year that contains it.)
- Period Type -- Select the duration of the fiscal period
- Period Num -- If you are providing the Period Numbers enter it here, or leave it blank for a system provided number.
- Period Name -- Use your Time Period naming convention to enter a name of your choice.
- From Date -- look up the date for the start of the period making it consistent with the alignment of all your period dates. (Don't enter this manually, to avoid mistakes.)
- Thru Date -- look up the date for the end of the period making it consistent with the alignment of all your period dates. (Don't enter this manually, to avoid mistakes.)
Note: Remember that the end of one period is exactly the same as the beginning of the next period that follows, etc.
Click: [Create] to finish and save the new Period.
Closing a Time Period
Once an accounting time period, such as a fiscal year, has been fully reviewed and, if necessary, audited, you can close a time period to "lock" it, so that no changes to past time periods can be made. This is useful from a control perspective.
Closing a time period also records the final balances of the time period, so that the financial reports can use these balances instead of tabulating all the results each time they are run. This makes them run faster when there are
When you close a time period, the system will close all time periods ending at a certain date, including fiscal months, quarters, and years. A time period can only be closed if all the time periods prior to it have been closed. Once a time period is closed, you will no longer be able to post any transactions to it. Any attempt to post a transaction with a transaction date prior to the ending date of a closed time period will result in an error message.
Closing a time period will do the following:
- The posted balance of the REVENUE, INCOME, and EXPENSE accounts are cleared out and replaced with an offsetting increase or decrease in the retained earnings account to make sure that the trial balances are still equal. This means that the revenue and expenses accounts cleared to make a new start for the next time period, and the net of revenue and expenses are carried forward in retained earnings.
- The GlAccountHistory entities are updated for the time period with the final amounts. This is used to obtain the balances for reporting.
- The time period is marked closed.
To be able to close a time period, you must configure both a PROFIT_LOSS_ACCOUNT and a RETAINED_EARNINGS account for your organization. The profit loss account is the one for calculating net income or loss, and no entries will be posted to it. The retained earnings account is used to carry forward the net revenue and expenses of the time period.
Re-open a Closed Time Period?
Once a time period is closed the system will not let you re-open it or post to it. It is best to avoid a premature closing of Time Periods so that there is sufficient time and preparation to make sure that Closing is final.
WARNING Do not attempt to re-open a time period manually unless you know how the process works.
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