Time Periods

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

When you close a time period, the system will ask you to close all time periods ending at a certain date, including fiscal months, quarters, and years. Closing a time period will do the following:

1. A net income will be calculated since the previous closed period of the same type (i.e., since the previous close fiscal quarter, if we are closing a fiscal quarter, since the previous close fiscal year if we are closing a fiscal year.) This net income will be DEBIT to the Profit and Loss account and CREDIT to the Retained Earnings account, unless this net income has already been posted to this time period. (This could happen if we're closing out a period with sub-periods which have already been closed, such as a quarter with months that have already been closed.)
2. All accounts should have an ending balance calculated and recorded for this time period. The ending balance of ASSET, LIABILITY, and EQUITY accounts should be carried forward from the previous period and added to their net activity during the period. The ending balance of other accounts is just their net activity during the period.
3. The time period should be marked closed.
4. The posted balance of the REVENUE, INCOME, and EXPENSE accounts should be 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.

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 must be a DEBIT side net income account, and the retained earnings account must be a CREDIT side equity account.

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.

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