The closing of a financial period is an accounting process carried out at the end of each financial period to ensure the accuracy of records and financial reports. This process involves several accounting steps aimed at evaluating financial performance and determining profits and losses. The Rewaa platform facilitates this process with the "Financial Period" feature, which allows you to set the duration of financial periods and close temporary accounts (revenues and expenses) at the end of the period. Below is a guide to closing financial periods easily.
Creating a New Financial Period
Navigate to:
Settings > Finance > Fiscal Year.
Add the following details:
Start Date of the Financial Period: (⚠️ Cannot be changed once set.)
Periods: Choose Monthly, Quarterly (3 months), Semi-Annual (6 months), or Annual (12 months). The end date is automatically calculated based on your selection.
Notes (Optional).
Click Save.
The financial period will be added immediately.
Edit Fiscal Year
Click the edit icon (🖊) next to the Fiscal Year.
Adjust the Periods(the end date updates automatically).
Add or modify notes as needed.
Click Save.
Closing a Financial Period
Click the three dots in the Filter column next to the period and select Close.
To close the current period, you must set up the next financial period:
Click Preparing for the next period.
Provide the following details:
Start Date: (⚠️ Cannot be changed once set.)
Periods: Choose Monthly, Quarterly, Semi-Annual, or Annual. The end date is calculated automatically.
Equity Account: Select an account to transfer profits or losses.
ℹ️ You can create a new equity account by clicking the (+) icon.
View revenue and expense details by clicking the arrow next to the account name.
Add Notes (Optional).
Click Save.
⚠️ After closing a financial period, no operations can be performed for dates within the closed period, such as creating, modifying, or deleting expenses, or conducting inventory audits.
The financial period status changes to Closed. A new financial period is automatically created and can be closed when its time frame ends.
Upon closing, the system automatically generates a closing journal entry for the closed period.
View the entry details under Accounting > Journal Entries.
FAQs
1. Can I close a financial period without enabling the accounting App?
Yes, the closing feature is available to all users. However, without the accounting module, you cannot transfer profits or losses to an equity account. You can only close the financial period.
2. Can I modify a closed financial period?
Yes, if you need to make adjustments or add transactions during a closed period, you can reopen it:
Click the three dots in the Filter column and select open.
Click Open a previous financial period.
The status changes to Open, allowing you to make edits or add transactions. Close the period again once done.
3. How can I check the status of financial periods (Open or Closed)?
Use the Status column in the financial periods table. Click the filter icon and select Closed or Open to view periods based on their status.