The accounting period is a fundamental part of accounting. It covers an interval of dates that the software uses to establish your accounts. The entries made between the opening and closing dates will therefore be used to establish the accounts for the year indicated.
As long as the fiscal year is not closed, the entries are relatively independent of an accounting year:
- The date of the entry can be changed, and it can therefore be attached to another fiscal year.
- On the other hand, an entry must necessarily be linked to a fiscal year.
A period cannot be deleted as long as there are entries linked to it, as these would then be "orphaned". You must first modify or delete the entries, then delete the fiscal year.
The fiscal year is generally 12 months aligned with the calendar year, but there are exceptions.
For example, a sports club, whose memberships follow the school system, can close on August 31. On the other hand, a first fiscal year can exceptionally be more or less than 12 months.
This article discusses the following:
- Principles of accounting periods (add shortcut links)
- Creating an accounting period in the software (add shortcut links)
- Modifying or deleting an accounting period (add shortcut links)
Principles of accounting periods
Accounting periods are governed by the following principles:
Duration: As a general rule, an accounting period lasts 12 months. Occasionally, you can also decide to have a shorter accounting period
Continuity: Even if you do not have any activity in certain months, you are required to have continuity between the different fiscal years. Thus, as soon as one fiscal year closes, another one opens automatically.
Duration of the first accounting period
If you have recently established your organization, there are certain provisions you must follow:
Maximum Duration: For a first accounting period, the maximum duration of your fiscal year cannot exceed 24 months.
Minimum Duration: There is no minimum duration. If you start your activity on November 30th, you can close your year on December 31st of the same year.
First fiscal year and pre-registration
When you open a pre-registration, for example via a membership form, the date on which the member registers will also define the date of the entry.
It is therefore necessary that the start and end dates cover the pre-registration period. Do not hesitate to exceptionally extend your fiscal year to make it start earlier.
If the registration date does not belong to any fiscal year, the entry will not be created in the accounts.
For example your first fiscal year is supposed to start on September 1st and your pre-registration starts on July 1st. In order for the entries to be attached to a fiscal year, you start the fiscal year on July 1, while keeping a closing date of August 31 of the following year.
The status associated with an exercise
Depending on the current period, the software will indicate that the fiscal year as :
Open: the fiscal year-end date has not yet passed, or a previous fiscal year with the status "in closing" has not been closed.
In closing: the year-end date has passed, but the closing has not been done.
Closed: the year-end date has passed, and the closing has been performed.
Create your accounting period
The creation of an accounting period is the first action performed in the accounting application. This period determines the time frame used to establish your annual accounts.
How to create an accounting period?
The creation of an accounting period will be done from the Accounting > Settings >Periods. Click on + New Accounting Year, then enter a start date and an end date for your accounting period.
It is also possible to work on several accounting periods at the same time. However, it is advisable to work on one or two accounting periods maximum.
To set up new accounting periods, click on + New Accounting Period and enter as many periods as necessary. The entries entered will be added directly to the correct period according to the dates entered at the time of entry.
In order to ensure the continuity of the accounting, the start date of a new fiscal year must be the day following the closing date of the previous fiscal year. In addition, you cannot create a new accounting period prior to a fiscal year with the status closed or in closing.
Record previous fiscal years
If you have already managed fiscal years before using the software, here is how to import your history and make the transition into Springly.
Set up the opening balance
It is recommended to set up the opening balance in order to indicate the main balances at the last closing, i.e. the state of your accounting just before the beginning of the current fiscal year.
It is generally advised not to re-enter the years that have already been closed, and to simply enter the initial balance from the Accounting > Settings > Opening Balance.
Entering entries from previous years
If you think you need to go back to previous years, closed or not, it is possible to manually fill in all the entries concerned. To do this, you must create the previous accounting period and then enter the accounting entries.
For example, you are in 2018, and wish to record an entry on the accounting period 2017, you just have to fill in, during the entry, the entry with a date in 2017.
Modify or delete an accounting period
Modify an accounting period
Sometimes the dates of the accounting period need to be changed for different reasons. Go to the Accounting > Settings > Periods and change the start/end date of your fiscal year.
The modification of these dates will only shift the accounting periods in time. The entries concerned will then only be attached to another fiscal year.
Example: Your accounting period runs from January 1st to December 31st. You have entered an accounting entry on May 5th. If you enter a new start date of June 1st, the entry of May 5th will no longer be taken into account in this fiscal year but in the previous fiscal year.
Factors to take into account
There are a few key points to take into account when modifying your accounting periods:
Continuity between fiscal years
To modify the start or end dates of a period, there has to be continuity between the fiscal years.
For example: you have two accounting periods: one from 01/01/2019 to 12/31/2019 and another from 01/01/2020 to 12/31/2020. If the new fiscal year 2020 start date is 01/02/2020, then the fiscal year 2019 end date should be 31/01/2019.
Non-modification of a closed fiscal year
If you have closed a fiscal year, and you wish to modify the dates of this fiscal year afterward, you must re-open this fiscal year. We invite you to consult this article to cancel an accounting closing.
Obligation to attach an entry to a fiscal year
If an entry is independent of a fiscal year and is attached to a new accounting period after modification, it must still belong to a fiscal year, whatever it is.
It will therefore not be possible to modify an end or start date of a fiscal year if this pushes entries outside the accounting periods created in the software.
Delete an accounting period
It is possible to delete an accounting period. However, the operations to be carried out will not be the same depending on the case.
Deleting exercises and related entries
You want to start from scratch because the entries entered were "test" entries. It is possible to reset the accounting to delete all the accounting data and settings. To do this, contact our support service via https://support.springly.org/en-us/
Deleting a period will not delete the entries of the fiscal year because the entries are independent of the fiscal years.
If you want to delete all entries belonging to a fiscal year, go to Accounting > Settings > Mass Cancellation or deletion of accounting entries.
Click on Mass Deletion Entries with respect to the date, choose the date range, and click on Delete these Entries. This will irreversibly delete all entries within that date range.
Delete an accounting period created by mistake
You have created an accounting period by mistake, and you want to delete it. From the Accounting > Settings > Periods, click on the cross in front of the accounting period you want to delete and save.
If an error message appears, it is likely that entries exist in the period you are trying to delete. You can either delete the entries or extend the period to the next year to cover the date of the entries. If you choose to modify the dates of the entries, please see this article on edit/delete an entry.