Time Periods
Time periods are used to define the date ranges of fiscal periods for accounting and sales forecasting purposes. 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. Thus, a fiscal year which spans the calendar year 2007 should begin on 2007-01-01 and end on 2008-01-01.
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. 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.
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:
- 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.)
- 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.
- The time period should be marked closed.
- 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.
There is a Community Reference on this topic, available at this URL: Re-open a Closed Time Period?
WARNING: If you try this solution, please test it on a non-production system that is like your Production set-up, in case the results are not satisfactory.
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