How to Close Your Accounting Period

Background

In youraccounting software, you will need to close your accounting period in order to reset your temporary accounts, or income statement accounts, and transfer the balance to an equity account, in order to carry forward the correct balances to the next accounting period. When you close an accounting period in your Patriot Software account, we will create a journal entry to bring all your temporary accounts to a zero balance, and close the remaining balance to your chosen equity account.

To Close Your Accounting Period in Patriot Software

You can easily create a closing entry for an accounting period in Patriot Software. Although this process is usually completed annually, you can close accounting periods at the frequency that works best for your business (weekly, monthly, quarterly, or annually).

Go to:Accounting > Financial Tasks > Close Period

If this is the first time you are closing an accounting period in Patriot Software, select both a start date and end date, and select an equity account to transfer any balances. This period needs to be one year or less.

Be sure to set your date range to include your earliest accounting transaction. If you enter a date range that excludes your earliest transaction, you will be shown a warning with your earliest transaction date, and will need to change your date range.

For all following period closings, the start date will default to the first day following your previous period close. You will only enter the period end date and select the equity account.

Viewing Previously Closed Periods

You can view all a list of all of your previously closed periods on the Close Period page.

When you close an accounting period, Patriot will create a journal entry to bring all income and expense accounts to a zero balance, and the remaining balance will be charged to equity. Click “View Details” to see the automatic entries that were made. You can also see these transactions on yourGeneral Ledger report.

Correcting a Closed Period

If you need to enter a new transaction within a closed period, you have two options:

Option 1 – Automatically Update The Closed Period:If you have a small amount of transactions to enter, you can enter each transaction, and we will recalculate the closing entry for that period for you without re-opening the period. At the time you enter the transaction in a closed period, you will be shown a warning, and can cancel or proceed. Your General Ledger Report will be updated, along with details of the closed period will be updated. There will only be a change to the entry if the transaction included an income or expense account.

Option 2 – Re-Open the Closed Period:If you have a larger amount of transactions to enter, you can re-open the closed period, and enter your transactions without seeing a warning each time. If you need to re-open more than one period, you must re-open the most recent first, then re-open prior periods in order. Be sure to close the periods again when you are finished entering your transactions.