Basics of Accounting Periods

Before starting

In this article we will cover the following topics:

• What is an accounting period?
• Principles of accounting periods 

What is an Accounting Period?

The accounting period is an interval of dates that the software uses to establish your accounts.

The entries made between the opening and closing dates will 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 be attached to another fiscal year
• On the other hand, an entry must be linked to a fiscal year

How long is a fiscal year?

The fiscal year is generally 12 months aligned with the calendar year, but exceptions exist.

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. 

Important! 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.

Principles of accounting periods

Basic rules

Accounting periods are governed by the following principles:

Duration

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 must 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 specific provisions you must follow:

• Maximum duration: For the 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 30, you can close your year on December 31 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 entry date.

Therefore, the start and end dates must cover the pre-registration period. Please do not hesitate to 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 1, and your pre-registration begins on July 1. 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. 

Statuses 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