Companies can divide financial years into tracking periods if desired. We recommend the use of tracking periods to close the books at the end of each month.
General information on tracking periods
Through the Edit tracking periods button in the Financial years view, you can add, delete, close and open tracking periods within the financial year.
Use of tracking periods is not mandatory, but it provides your company with benefits such as the following:
- The information of balanced months does not change.
Balancing the books is easier, since you only have to track the open period instead of all receipts from the beginning of the financial year.
- Monthly opening balances from the balance sheet are displayed in the general journal and general ledger.
Adding tracking periods
Select the desired financial year in the Financial years view and click on the Edit tracking periods button. You can only add tracking periods to open financial years.
Tracking periods in a closed financial year are read-only, and you can close or open tracking periods only in the oldest open financial year.
You can add a new tracking period by clicking on the Add tracking period button. The default start and end dates of the tracking period are the first and last days of the following month. You can change the start and end dates by clicking on the date field and selecting the desired days from the calendar. Tracking periods can be of any length, such as one month or quarter, as long as they do not overlap. We recommend one-month tracking periods.
Clicking on the Create tracking periods button will create all of the financial year’s monthly tracking periods.
Deleting tracking periods
You can delete the selected tracking period by clicking on the Remove tracking period button. You cannot delete closed tracking periods.
Opening tracking periods
If you want to edit a closed tracking period, you can open it by clicking on the Open tracking period button. When you are done, you can close the tracking period by clicking on the Close tracking period button. The tracking periods of closed financial years cannot be opened, and tracking periods must be opened in order of latest to earliest. Opening a closed tracking period will delete its opening receipt.
Closing a tracking period
When the accounting of a tracking period has been completed and the period’s VAT summary generated, you can close the period. Closing the period will create an opening receipt for the day following the last day of the period, just as closing a financial year will create a receipt for opening the accounts. Receipts that do not constitute business transactions should be transferred to the next open period before closing the tracking period. If you are using tracking periods, you must always remember to check that the financial year’s profit or loss and balance sheet balance for the period being closed. If they do not balance, you must clear up the difference before closing the period. This procedure will also considerably lighten the work load at the end of the financial year.
After you have closed the period, you will no longer be able to save new receipts for it or to edit existing receipts without reopening the tracking period.
Note! You must remember to update the reporting database before closing the tracking period, so that the balances on the accounting reports will be up to date. This is done by clicking on the Update reporting database button. The function does not update the database used by the Graphic reports.
Clicking on the Close tracking period button will close the oldest open tracking period. If the financial year contains unfinished transactions, the program will notify you of this and list the unfinished receipts. Closing a tracking period will generate a tracking period opening receipt of the period’s business transactions for the following tracking period. You can add the information on the receipt to the general journal and general ledger by selecting Show the opening receipts for the tracking period.