Closing an accounting period means "locking" it. It freezes your accounts, generates financial statements (e.g., statement of financial position, profit and loss), and opens a new period. This allows you to present your financials at a general meeting or share them with third parties (accountants, local authorities, etc.).
Springly makes the closing process straightforward. To help everything go smoothly, a few checks are worth doing beforehand. In this article, we'll cover:
Preparing for your closing
Since closing happens at the end of the accounting period, preparing ahead of time will make the process much easier when the time comes.
Throughout the year
If your bookkeeping isn't kept up to date regularly, the closing process can quickly become time-consuming.
We recommend completing the following tasks at least once a month:
- Record your book entries (or even weekly, depending on transaction volume);
- Run your bank reconciliation;
- Follow up on overdue receivables;
- Monitor your cash flow: calculate your net cash position;
- Reimburse volunteer expense reports.
Prerequisites for closing
To close an accounting period, its status must be closing, meaning:
- The end date has passed;
- The previous accounting period has been closed.
You can work on multiple accounting periods at the same time, regardless of whether their status is "open" or "closing". Periods must be closed one at a time, starting with the oldest.
Checks to complete before launching your accounting period closing
Before closing an accounting period, it's standard practice to run a series of checks to ensure the financial statements you produce are as accurate as possible.
The goal is to confirm that your books are in order.
The checklist below guides you through the recommended control points.
- Check your opening balance if this is your first accounting period in the platform;
- Verify the accuracy of your cash accounts:
- Run your bank reconciliation to review bank transactions and catch any missing entries or duplicates;
- Confirm that the theoretical balance of your petty cash account matches your actual cash on hand. Your petty cash balance should never be negative — having more outflows than inflows is a red flag. See petty cash best practices for guidance;
- Validate your e-wallet using the trial balance we generate automatically.
- Expenditures and Revenue: start by comparing balances between the current year (N) and the prior year (N-1). This helps you spot any unusual or exceptional items and make adjustments using your advanced options:
Please note: These checks are optional and are here to guide you. The only blocking check is a negative petty cash balance — we prevent you from moving to the next step in that case, since a physical cash box simply can't go into overdraft 🙂
Happy closing!
Learn more
We recommend the following articles to get a better understanding of how the closing process works:
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