Can you help me understand what’s the use of the closed column tick box available in the accounting periods?
My example accounting periods are from Jan 2014 up to Dec 2014. The management wants to close the accounting periods from January 2014 up to September 2014. In NAV, you can tick manually the “CLOSED” function but it has no effect when you post new entries, it will still allow you post entries. So what’s the use of having such?
Is there any work around for this? This is what I said to the accountant, " the system has no such closed function per month same what Close Year function does but you can limit your transactions and entries by having a limitation on posting date range by setting up from to dates either in GL Setup or User setup". This still do not satisfies the Accountant.
Any suggestions would be helpful.
As you rightly said, close accounting period does not restrict users from posting entries into that period. It is more for closing the accounting statements where in amounts from income statement is posted into retained earnings account.
Restricting the posting in a period can only be done by using either User set up for specific users or General Ledger setup for all users
You can tick manually the closed function. So, manually closing the one single period doesn’t do anything?
Yes. The user is still allowed to post in “closed” period(s), both if closed by running period-closing batch job or ticking the checkmark manually.
The only way to prevent postings is setting allowed posting dates from & to values (globally in GL Setup or per user in User Setup). Normally, only a limited number of users are given rights to change this setup, therefore, method is effective enough.
Thanks Modris for your answer.
Actually, I suggested already the GL and User setup to restrict users from posting outside the date range but the accountant wants to have it “when she does the closing per period (month) she wants that the profit for that month will carry over to the next month as retained earnings from the previous month”
But as you said, there is no restriction on the close period function in NAV unless defined in the GL or User Setup through from to dates.
Let me ask one question, Is this kind of requirement a standard practice in accounting?
Well, that is strange - normally it’s done once at the end of financial year, not every PERIOD of FY…
Totally restrictive limitations to postings would cause problems. Normally, when the FY is closed, balance sheets, P&L etc etc of the FY are all prepared and AFTER that the auditors come - internal or external, that depends on company’s rules or country’s accounting regulations.
Almost always auditors find something to be adjusted slightly, by occasion corrections might be rather serious. NAV doesn’t have by design that special audit period as some other ERP systems do, the only way to post such corrections is to enter them in already “closed” FY’s periods.
Closing a period only prevents user from changing the Starting Date.
Some companies do not use calendar-months - in one company for instance the year starts a 01 Jan, but second period starts after the weekend closest to the change of month (in 2014 = 03 Feb); this is made manually. But cannot be done for at closed period :)]