Close the month

At the end of the month the parked vouchers are posted, the standing entries and allocations are run, adjustments are made, the trial balance is checked, and the period is closed so nothing more lands in it. The month then reads the same on every report from that day on.

Phase

Period end

Who

Accountants post; the chief accountant checks, closes the period and reads the statements

How often

Monthly

Screens

Batch Posting, Process Recurring Entry, General Entry, Process Allocation, Trial Balance, Financial Year, the statements

What it is for

Each module posts as it works, so the ledger is current all month. The close adds what no document creates (accruals, allocations, standing entries) and then locks the month.

The rule people get wrong: closing is a status on Financial Year, and it is refused while journal vouchers of the month are still parked. Post or delete parked vouchers first.

Before you start

• The month's operational closes are done in their modules:
  • stock costing and closing: Inventory Closing, see How do I close the inventory period?;
  • depreciation: How do I run depreciation?;
  • production cost: Production Order Periodic Settlement, see How do I settle production cost?;
  • bank reconciliation: Bank Reconciliation and Bank Transactions, see How do I post the differences found in the bank reconciliation?;
  • parked customer and vendor documents: Batch Posting in Receivables and How do I post parked documents? in Payables; parked service invoices are posted the same way, see How do I invoice a service order?;
  • withheld tax paid over: How do I pay withheld tax?;
  • payroll.
• Recurring Entry Templates and Allocation Rules are in place.
• The next month's Operating period exists, and next year's Financial Year before the last month of the year.
• The closer may edit Financial Year; the people posting late adjustments are named in a special condition if the period must stay closed to others.

The process at a glance

#	Screen	Who	What you do	What it creates
1	Batch Posting	Chief accountant	Fetch the month's parked vouchers, post the good ones, delete the rest on General Entry	Posted vouchers
2	Process Recurring Entry	Accountant	Till Date = last day of the month, Create, Save	One voucher per template due
3	General Entry	Accountant	Accruals, prepayments, corrections, dated the last day	Journal vouchers
4	Process Allocation	Cost accountant	Posting Date = last day, each rule, Save	One voucher per source account
5	Trial Balance (see Lists and reports)	Chief accountant	Date = the month, Posting Status Posted; check suspense and clearing accounts are nil	Nothing
6	Financial Year	Chief accountant	Edit, set the month's Period status Closed, add special conditions if needed	A closed period
7	Balance Sheet, Income Statement, Cash Flow Statement	Chief accountant	Read and export	Nothing

Steps

1. Open Batch Posting (General Ledger › Batch Posting). Date From and Date To = the month. Create; untick what must not post; Save.
   • Vouchers you untick stay parked and will stop step 6. Delete them on General Entry or post them later.
2. Open Process Recurring Entry (General Ledger › Recurring). Transaction Date = the last day of the month. Create, read the lines, Save.
   • Every repetition is dated the Till Date. A month skipped earlier is caught up on this date.
3. Post adjustments on General Entry (General Ledger › Controlling): accruals, prepayment releases, reclassifications, dated the last day, status Posted.
   • Reverse last month's accruals with Reverse on their voucher, Reverse Date the first day of this month.
4. Open Process Allocation (General Ledger › Allocation). Posting Date = the last day; pick each rule; Create; Save.
   • Only accounts with a debit balance up to the Till Date are allocated.
5. Open the Trial Balance (General Ledger › Chart of Account). Date = the month, Posting Status Posted. Check the suspense, clearing and inter-unit accounts.
6. Open Financial Year (General Ledger › Fiscal). Edit; set Period status Closed on the month. For the first or last month of the year, close the Opening or Closing period with it. Add a Special Condition for any journal or user who may still post. Save.
   • From now on every document dated in the month is refused, unless a special condition lets it through.
7. Read the statements: Balance Sheet, Income Statement, Cash Flow Statement.

What posts

Document	When	Debit	Credit
Batch Posting	Save	Parked vouchers become Posted: their own lines
Process Recurring Entry	Save	The templates' debit lines	The templates' credit lines
General Entry	Save, status Posted	The debit lines	The credit lines
Process Allocation	Save	Destination accounts, their share	The source account

Each is undone with Reverse on the toolbar of the document that posted. Closing the period posts nothing.

What happens

• The month's balances are final on every report.
• Documents of every module dated in the month are refused, except through a special condition.
• Parked journal vouchers cannot remain in a closed month.

Common mistakes

• "You cannot close Period ... because Park entries still exist." Step 1 left parked vouchers. Post or delete them.
• The recurring entries of two months landed on the same day. The process ran once for two months. Run it every month.
• A late supplier invoice is refused in the closed month. Date it in the open month, or add a special condition for its journal nature on the closed period.
• A special condition for a user group let everyone in. Only user conditions check the user. Use one line per user.
• The first month stays open after closing it. The Opening period shares its period number; close it too.

Related screens

• Batch Posting - posts parked vouchers.
• Process Recurring Entry - standing entries.
• General Entry - adjustments and reversals.
• Process Allocation - shared costs.
• Financial Year - closes the period.
• Lists and reports - trial balance and statements.
• How do I close the financial year?
• How do I see what customers owe? - check the customer balances before closing.
• Plan to produce - the production settlement at month end.