Period end processing closes the current financial period, moving completed
transactions into history, deleting expired transactions, and updating
everything by telling the system that it is a month older now. This starts the
new period.
You cannot post transactions to a period that has been closed so it is
important to ensure that you have completed all transactions for the current
month before running the period end.
Stock, Sales Order Processing and Sales period ends are normally run on the
last day of the financial period. Purchase period end can be left until you have
received all supplier invoices and credits for the current period, and Nominal
period end can be left until you have posted all the required nominal journal
entries. Period end dates allow for future transactions to be posted as the
system will determine which period they relate to based on the posting dates
you enter. This means that you can keep periods open beyond the last day in
your financial period and still post transactions to the new month. When you
close the month they will be moved from future to become current
transactions.
Reporting is usually done at period end to determine the company
performance for the month and year to date.
The order in which you must run the period end routines is as follows:
Period end is considered of vital importance in sound financial control and
auditability. It enhances performance management, encouraging monthly
sales, cost and profit figures to be derived from the system. These can be
used in month on month comparisons and analysis, and aid in financial
forecasting.