The accounting cycle: the journey every period runs, from the day's transactions to the signed-off financial statements. It is mostly Finance, but everything you do all month feeds it.
- The five stages of the period, from posting to statements
- Why reconciliation and adjustments come before the close
- What closing a period locks, and what year-end transfers
The journey, step by step
Transactions post all month Finance
Every document, a sale, a bill, a payment, a payslip, writes a balanced journal to the general ledger as it is confirmed. Nothing is entered twice.
Reconcile Finance
Match the books to the bank statement, catching missing entries, duplicates and stray fees before anything is locked.
Adjust Finance
Post the accruals, provisions and corrections so the period reflects economic reality, not just cash movements.
Close the period Finance
Lock the period so its numbers can no longer drift; a year-end close also rolls the profit into retained earnings.
Read the statements Finance
The trial balance, profit and loss, balance sheet and cash flow, live to the date you choose and backed by the detailed ledgers.
Where it crosses modules
- Every module feeds Finance – sales, purchase, inventory and payroll documents all post journals here, so the close consolidates the whole business.
- Tax and multi-currency – the close also revalues foreign balances and surfaces the figures behind the tax return.
Common variations
- Interim versus year-end – lock months as you go; reserve the year-end close for the profit-to-equity transfer.
- Prior-period corrections – handled with a dated adjusting entry in an open period, never by reopening history.
- Multi-currency – period-end revaluation posts unrealised FX gains and losses.
Related
- Module: Finance
- Reference: Financial Reports, Accounting Periods