Accounting Periods

Last updated: June 20, 2026

An accounting period is a window of time you eventually close to lock the books, so that once a month or a year has been reported, its numbers can no longer drift. Closing is also when the system does its period-end housekeeping, rolling profit into equity and revaluing foreign balances.

What you will learn
  • What closing a period does
  • How backdate prevention protects reported figures
  • What year-end close transfers
  • How prior-period corrections are handled

Anatomy of the screen

A period close works through a set of stages:

  • Period – the date range and scope: an interim close, or a full fiscal year-end.
  • Currency – multi-currency revaluation, where enabled.
  • Provision – period-end provisions and adjustments.
  • Checklist – pre-close checks to confirm the period is ready.
  • Summary – the resulting close.

How it behaves

Locking and backdate prevention

A period runs Open, then Closed (locked), and can be voided to re-open. Once closed, nothing can be posted with a date inside it, a rule enforced on every posting and every reversal. This is what makes a reported period trustworthy: the figures you signed off cannot quietly change.

Year-end close

A fiscal year-end close transfers the profit-and-loss balances into retained earnings, resetting income and expense to zero for the new year while the balance sheet carries forward. An interim close locks the period without that transfer.

Housekeeping at close

Closing also posts foreign-currency revaluation on open balances and reverses prior-period provisions, so the new period starts clean.

Worked example

You close March. An invoice that arrives in April cannot be dated back into March, it must fall in April, keeping the March accounts you reported intact. At year-end, the close rolls the year's profit into retained earnings and the new year opens fresh.

Edge cases and good practice

  • Interim versus year-end. Use interim closes to lock months as you go; reserve the year-end close for the profit-to-equity transfer.
  • Correct with adjusting entries. A late correction to a closed period is handled with a dated adjusting entry in an open period, not by reopening history.

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