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Managing Accounting Periods

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AVAILABLE FROM CRM.COM R10.0.0

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Navigating to Accounting Periods

 CONFIGURATION > FINANCE APPLICATION > ACCOUNTING PERIODS > MANAGE ACCOUNTING PERIODS

Using Accounting Periods

An Accounting Period is defined as the time frame in which financial transactions are posted. An accounting period in CRM.COM can cover either a month or a year, according to how it is set up in Accounting Period Settings and it can be either open or closed, but only one Accounting Period can be open at a time and it will always be the latest one. 

The first Accounting Period is automatically created by the system on setting up Accounting Period Settings while the rest of the Accounting Periods are created once the current accounting period is closed (via Closing Period process). Once an Accounting Period is closed it cannot be reopened and thus no more Financial Transactions can be posted against that period, because Financial Transactions can only be posted against open/current Accounting Periods and they can only be related with a single Accounting Period. 

Before closing the period you have the option to find all financial transactions that have been created within the time frame of the open period and if you wish, you can have them posted so that they will be included in the period you are about to close. This is done via the Accounting Period Posting process

In addition a utility, to identify erroneous data (financial transactions and accounts receivable) and correct them, is available and it can be executed before the closing period process as if any errors are found during the actual closing the process will not proceed. 

You can use the Correction process, in cases where the closing period is interrupted (i.e. the task is stopped via the scheduler) and there are open transactions


The Accounting Period is also responsible for Accounts Receivable Balance calculation as the closing of an Accounting Period will calculate the account's Opening Balance which is used in the balance calculation. 

Accounting Periods Validations & Restrictions

ActionRestrictionsValidationsAdditional Information
Create
  •  Mandatory Configuration Entities must be configured before you start using Accounting Periods.Check out Accounting Period Settings

 

Close
  •  You can only close Open Accounting Periods
  • Validate that  Accounting Period Settings  are defined
    • In cases in which no Accounting Period Settings exist, then the process cannot be initiated.
  • Validate existing Accounting Periods
    • There is at least one Accounting Period registered in the system and it is in open life cycle state. The process cannot be performed for already closed accounting periods.
    • The open Accounting Period's end date is in the past compared to the process run's performed date.
  • The process will be executed by the scheduler but it can only be executed directly or scheduled for the future. It cannot be scheduled to be executed repeatedly
  • Terminated accounts receivable will also be considered during the process run too but only as long as posted financial transactions were submitted against these accounts receivable and the financial transactions are not yet related to any Accounting Period. This means that these financial transactions might had been submitted against the accounts receivable prior its termination but the financial transactions will still have to be related to an accounting period.
  • Error Log is available to keep all the Accounts Receivable or Financial Transactions that could not be processed
Modify
  • You cannot modify an Accounting Period
  
Open
  • You cannot reopen a Closed Accounting Period
  
Delete
  • You cannot delete an Accounting Period
  

 

Accounting Periods Attributes

Fields followed by an * means that they are mandatory

Name

Description

Main Information
Number  The Accounting Period's number which it consists of the accounting period's month and year (e.g. 201601 for January 2016 if the accounting period is a monthly one or 2016 if it is annual)
NameThe Accounting Period's name which it consists of the accounting period's month and year (e.g. January 2016)
From dateThe first day of the Accounting period's month
To dateThe last day of the Accounting period's month
Life cycle state

The Accounting Period's life cycle state

  • Open
  • Closed
Closed dateThe date on which the accounting period was closed. This information is available only if the accounting period's life cycle state is set to Closed
Closed by Accounting PeriodThe Accounting Period which follows this Accounting Period. This information is mandatory only as long as this accounting period is in Closed life cycle state
Period closing performed by userThe User who initiated the Accounting Period Closing process that triggered this Accounting Period to be updated into Closed life cycle state.
This information is available only if the accounting period's life cycle state is set to Closed
Accounting Period Totals

Section with all the related information

  • Total Amount of Debits
  • Total Amount of Credits
  • Total Amount of Period
  • Total Number of Debit Transactions
  • Total Number of Credit Transactions
  • Total Number Of Financial Transactions
Period Transactions
Lists all financial transactions which were considered during the accounting period's closing process (i.e. related to the accounting period) is displayed in read only mode
Section is only visible for closed periods 
Financial Transactions
  • Number
  • Reference Number
  • Account Information
  • Type
  • Issue Date
  • Posted Date
  • Total Amount

Draft Transactions

Lists all financial transactions still in Draft state and created during the period's time frame is displayed in read only mode

Section is only visible for open periods 

Financial Transactions
  • Reference Number
  • Account Information
  • Type
  • Issue Date
  • Posted Date
  • Total Amount
Period Closing Error Logs
Accounting Period Closing Error LogsA list of accounts receivable which were not successfully processed during the Accounting Period Closing process run of the specified Accounting Period.
This list includes Accounts Receivables which have posted financial transactions with posting date within the Accounting Period's time frame, but these financial transactions are not related to the Accounting Period.
Log Information
Log Information

Includes the standard log information

 Posting Financial Transactions to include in Current Period

Before closing a period you will need to ensure that all financial transactions that should be included in the period are already posted, because only posted transactions will be taken into consideration, and once the period is closed you will no longer be able to post any transactions against that period.

Via the Accounting Period screen, of an open period you can find all the related Draft Financial Transactions that have been created within the time frame of the specific period, select the ones you want to include and post them

  1. Navigate to the Accounting Period screen
  2. Search for the Open Period and go to its data entry screen
  3. Go to the Draft Transactions Section
    All the eligible transactions will be available
  4. Select the ones you want to include by placing a check in their related checkbox
  5. Click on Actions > Post from the Actions menu

OPEN PERIODS DATA ENTRY SCREEN

 

Correcting data before closing an Accounting Period 

Once all the transactions to be included in the period are posted you can  then perform a check on the correctness of the financial transactions and accounts receivable, which will be taken into consideration by the closing process. This is achieved by the Accounting Period's Closing Validation Process which is responsible for retrieving and fixing erroneous information that affect an Accounting Period's Closing process. This erroneous information might be related to either Financial Transactions and /or Accounts Receivable and can be found in the table below.

It is recommended to skip this step and proceed directly to the Closing of the period as the system will run a check automatically before closing the period, and IF required you will be notified in order to run the Correction step.

 

It is not mandatory to execute the process before closing a period, however, on closing the period if any errors are identified, the system will not be able to proceed unless Accounting Period's Closing Validation Process is explicitly executed.

  1. Navigate to the Accounting Period screen
  2. Search for the Open Period and go to its data entry screen
  3. Click on Actions > Period Closing Corrections from the Actions menu
    The process will be executed and you will be notified once completed so you can proceed to the closing of the period 


Accounting Period's Closing Validation Process

Identified ErrorsCorrections
  • Find all financial transactions which are:
    • Not Posted and 
    • Have an accounting period
  • Their accounting period is set to empty
  • Find all financial transactions which are:
    • Not related to Accounting Period and
    • Posted and 
    • Their posting date is before the accounting period's start date (exclusive)
  • The appropriate accounting period is set on the financial transaction
  • The opening balance of the account is recalculated to include the FTs amount 
    • If the financial transaction is a debit, then the accounts receivable balance is increased by the same amount as the financial transaction's total amount
    • If the financial transaction is a credit, then the accounts receivable balance is decreased by the same amount as the financial transaction's total amount
  • Find all financial transactions which are:
    • Posted and
    • Their posting date does not fall within their related Accounting Period's time frame (including the related accounting period's start/end date) and
    • Their posting date is before the start date (exclusive) of the Accounting Period which is being closed
  • The appropriate accounting period is set on the financial transaction
  • Find all accounts receivable which are:
    • Not related to the accounting period being closed and
    • Have a creation date before the Accounting Period's start date (exclusive) and
  • The opening balance for the accounting period which is about to close is recalculated by using the following formula:
    • (Sum up all posted debit transactions) - (Sum of all posted credit transactions) which were submitted against the accounts receivable and have a posting date before the accounting period's start date (exclusive)
    • Set the opening balance, opening balance calculation date and accounting period on these financial transactions

 

Closing an Accounting Period 

Given that Financial Transactions and Accounts Receivable are correct then you can proceed with closing the Accounting Period.

  1. Navigate to the Accounting Period screen
  2. Search for the Open Period and go to its data entry screen
  3. Click on Actions > Close Period from the Actions menu
    CLOSE PERIOD ACTION
    1. From the modal select whether you would like to execute the process now or schedule it for some time in the future
    2. Click on Submit
    Once the process is submitted to the scheduler it will start running at the scheduled time. 
  4. When the process is completed:
    1. Accounting Period Totals tab is populated with the respective figures
    2. Current Period is closed
    3. The period is copied on all Financial Transactions posted within this period
    4. A New Period is created
    5. The opening balance of all Accounts Receivable is calculated

 

for business examples related to Accounting Periods

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