It's good practice to routinely close your books at the end of an accounting period so that previous transactions are not changed.This article will explain how a closing date will affect Acctivate.
When an accounting period ends its best practice to close the books with a date and password so that no previous transactions can be impacted. Rather this is done on a yearly, quarterly or monthly basis, it's important to know how setting a closing date will impact Acctivate.
When a closing date is set in QuickBooks, rather it be Desktop or Online, the closing date is synced back to Acctivate and stored in the database. When posting transactions, Acctivate will compare the transaction date to the closing date to determine if said transaction can be posted.
If the transaction falls outside of the accounting period, you will be unable to do the following:
- Post OR void sales invoices.
- Post OR void purchase invoices.
- Post any sort of inventory transaction (Balance Adjustment, Adjustment, Issue, Receipt, Landed Cost)
Please Note: You will still be able to pull up and view old orders, invoices etc. You can also view old journals and transactions using reports.
There are a few special considerations to take into account with a closing date:
- Receipts will not be able to be updated in a closed period if the invoice does not match the receipt. Acctivate will instead post a "Prior Period Adjustment" to reconcile the difference in cost between original receipt and what it should be. This will be posted as of the first day of the new period.
- Landed Costs for prior period transactions will be posted as of the first day of the new period. This results in the COGS of prior transactions not being rolled forward.
- "Blanket" POs are not compatible with frequently closed books, and you may see costing oddities. You should avoid using "blanket" POs that last between periods.
- If a journal is for some reason updated, a sync error will be logged.
Sometimes circumstances may call for updating a transaction in a prior period. When this happens, you have a few options:
- Remove the closing date and sync. Often times this will be the cleanest option if a journal needs to be re-calculated, or a transaction voided.
- Post an offsetting GL entry in QuickBooks to recalculate any transactions that have changed.
- Create a "reverse" transaction in Acctivate as of the first day of a period to balance out the original transaction. (So, if you cannot void a receipt for 2 quantities at $10 prior to period closing, create a negative receipt for -2 quantity at $10 as of the first day of the period.)
It's important to create a routine for closing your books and stick to it, to avoid any possibility of running into a closing date error. If you need tips on developing a closing date routine, check out this article.