Periods and fiscal years¶
Periods and fiscal years
A fiscal year corresponds to twelve months for a company. In many countries, the fiscal year corresponds to a calendar year. That’s not the case in others.
The fiscal year is divided into monthly or three-monthly accounting periods.
Open ERP’s management of the fiscal year is flexible enough to enable you to work on several years at the same time. This gives you several advantages, such as creating three-year budgets, and statements straddling several calendar years.
Defining a period or a fiscal year¶
To define your fiscal year use the menu Financial Management ‣ Configuration ‣ Financial Accounting ‣ Periods ‣ Fiscal Year. You can create several years in advance to define long-term budgets.
First enter the date of the first day of your fiscal year and the last day. Then to create the periods click one of the two buttons at the bottom depending on whether you want to create twelve 1-month or four 3-month periods:
- Create monthly periods ,
- Create 3-monthly periods .
Closing the end of the year¶
To close the end the year, use the menu Financial Management ‣ End of year processing ‣ Close a Fiscal Year. A form opens asking you for the essential information it needs to create entries to start the following year.
When the year is closed you can no longer create or modify any financial transactions in that year. So you should always make a backup of the database before closing the fiscal year. Closing a year isn’t obligatory and you could easily do that sometime in the following year when your accounts are finally sent to the statutory authorities, and no further modifications are permitted.
It’s also possible to close an accounting period. You could for example close a monthly period when a tax declaration has been made. When a period is closed you can’t modify any of the entries in that period. To close an accounting period use the menu Financial Management ‣ Configuration ‣ Periodical Processing ‣ End of Year Treatments ‣ Close a Period.