Description
Create accounting periods as fiscal years, as well as manage monthly closes (both open and close) from this section. The fiscal period must be the same for all SoftLedger Locations, and this period is used for representing data in financial statements (e.g. Retained Earnings automation is calculated for this fiscal period through the close of the Accounting Year in this module). You can access and manage accounting years and monthly periods from this page under Admin section:
Actions on Accounting Periods Page
Add Accounting Year
The start date is required to be the first date of the fiscal year (e.g. April 1st if the fiscal year ends March 31st). The start date must be the same across the entire SoftLedger system:
This is the date the Accounting Year will start on.
Consecutive years may not overlap
Results from adding Start Date:
12 Monthly Accounting Periods are created
The first month in the period will start on the Accounting Year Start Date
All periods ledgers are unlocked when the Accounting Year is first created
Delete Accounting Year
To delete an Accounting Year that has already been created, click the Red Trash icon on the far right in the table.
You will not be able to delete an Accounting Year if any of the below is True:
If the Year is Closed
If any of the Year's Monthly Periods are Closed (or any of the Modules for that Monthly Period)
If there is both a Year after and a Year before the Year you are trying to delete (i.e. you can't delete out of order)
If any kind of transactions have been created within that Year
Close and Open Monthly Periods by Module
Within each Accounting Year, there are 12 Monthly Periods that each have the ability to close down Module (Tasks) within each of those Months. For example, you can Close the AR Task in January 2025 Month Period to make sure all Invoices in AR are Issued, and Lock the AR January 2025 Period. This is done as part of a monthly close process. See more details on this below.
Monthly Close Process
Once a month has been reviewed and all expected activity has been added and posted/approved/issued, you can close a monthly period in this module to lock this period and perform other close actions. See image:
Each monthly period consists of the below tasks and required condition for that task to be closed:
Financial
All Journal Entries within the month in the Financial Ledger must be Posted.
Accounts Receivable
All Invoices and AR Credits within the month in the AR Ledger must be Issued, and all AR Payments Approved.
Accounts Payable
All Bills and AP Credits within the month in the AP Ledger must be Approved, and all AP Payments Approved.
Inventory
Purchase Orders/Sales Orders/Stock Adjustments have been reviewed and Cost Basis is current and up to date through the end of the monthly period.
Crypto
Crypto Transactions have been reviewed and Cost Basis and Build Journal Process is current and up to date through the end of the monthly period.
Forex Rates
Ledger Accounts operating with posted currencies different to location reporting currency have been reviewed and set to Remeasure Forex=TRUE (in individual Ledger Account settings) when remeasurement by system is desired by user. See more details on Foreign Currency Remeasurement -->
Period
If all above tasks have been completed, close the accounting month to signify the close is complete.
Navigating the Monthly and Yearly Close Tasks
SoftLedger has made this module and close process as efficient as possible, so you can have ultimate flexibility to close and reopen, as well as close quickly and efficiently for many periods at a time.
Close/Open All Tasks
You can close all monthly period tasks, so long as the previously described requirements to close each task have been met, with the click of a button:
Troubleshooting
There will be guidance per task when you can/cannot close the task based on the requirements previously listed in this article. See example:
Result of Close Process
When each task is closed, the below details per module/task are true:
Financial
When locked you can no longer post journal entries to the Financial sub-ledger during this accounting period.
Accounts Receivable
When locked you can no longer post journal entries to the AR sub-ledger during this accounting period.
Accounts Payable
When locked you can no longer post journal entries to the AP sub-ledger during this accounting period.
Inventory
When locked you can no longer post journal entries to the Inventory sub-ledger during this accounting period.
Inventory stock adjustments during this accounting period will also be in "locked" status, meaning you cannot edit, create, or delete adjustments during this accounting period. This includes receiving from a PO and fulfilling from a SO.
If any Completed/WIP journals are in-accurate, you will not be able to close the inventory ledger.
Crypto
When locked you can no longer post journal entries to the Crypto sub-ledger during this accounting period
Crypto Transactions during this this accounting period will be put in "locked" status. Crypto Transactions during this period will not be able to be created, edited or deleted.
Forex Rates
Journal Entries to reflect foreign currency remeasurement impact have been produced and include "Forex Remeasurement" in the Journal Reference. See more details on Foreign Currency Remeasurement -->
Period
When locked, you can no longer toggle any other fields for this accounting period.
This will close out the accounting period.
All periods must be locked to close out/lock the accounting year.
Important Considerations
You can open and close the AR, AP, and Financial ledgers in non-chronological order, so long as the Year, Period, and Forex Rates tasks are unlocked for that same Period. This can be helpful for opening prior periods for small adjustments.
The Crypto and Inventory ledger will need to be opened and closed in chronological order (e.g. January, February, March, etc.).
To close the Forex Rates task, be sure that you have the default Unrealized Foreign Gain/Loss Account set in your individual Location settings under Financial>Locations.
The Retained Earnings booking is calculated and booked when closing the lock icon for the Year. Be sure to have the Retained Earnings default account selected in Settings>Accounts. See more details on Retained Earnings and Year Close here-->
Your accounting periods should begin to cover the oldest transactions you plan to bring in your system (e.g. if you have transactions back to January 2019, then you Accounting Years should start from the 2019 fiscal year).