The Implications of Accounting Period Closing in Springly

Ready to close your accounting period? Congratulations! This article walks you through the operations the software performs automatically at closing, including:

• Carrying forward end-of-period balances
• Result allocation
• Types of C/FWD entries generated

Let's dive in!

Carrying forward end-of-period balances

Following the principle of accounting period independence (each entry belongs to the period it relates to), closing links one accounting period to the next.

At closing, the end-of-period balances are finalized for each account.

The software totals all movements recorded in each account (debits, credits) and calculates the end-of-period balance. This balance is then carried forward as the opening balance for the next period.

This works just like your bank statements: the balance at the end of the month becomes the opening balance for the next period.

Carrying forward the end-of-period balance for account 512001:

This mechanism works through the automatic generation of C/FWD entries. It also determines the opening balance when you set up your opening balance.

You can find all C/FWD entries under Accounting > Documents > Journal by filtering by the entry type of the same name.

The software generates these entries as follows:

• Debiting all accounts that had a debit balance at the close of the previous period (and crediting account 890 "Opening Statement of Financial Position");
• Crediting all accounts that had a credit balance at the close of the previous period (and debiting account 890 "Opening Statement of Financial Position").

Here is an example of a C/FWD entry for a debit (positive) account 512:

To avoid inconsistencies, C/FWD entries cannot be deleted or edited. We also strongly advise against entering them manually.

Result allocation

As a general principle, every expense/revenue entry is tied to the accounting period it relates to.

When there is a timing mismatch, adjusting entries can be posted at period-end — for example, to record deferred revenue or an invoice not received.

At closing, result allocation works as follows:

• Revenue accounts (class 7) and expense accounts (class 6) are closed out;
• The result is calculated as the difference between revenues and expenses;
• The result is carried to the period's statement of financial position via an opening balance equity entry;
• The opening balance equity is posted to:
  • accounts 110/120 if the result is positive;
  • accounts 119/129 if the result is negative.

Allocation of a positive result:

Here is an example of an opening balance equity entry for a positive result:

Types of C/FWD entries generated at closing

Depending on the account, the format of the C/FWD entry will differ.

The goal is to make it easier to track entries in the next period by providing the right level of detail (balance/group).

There are three types of C/FWD entries generated at closing:

• group C/FWD entries;
• balance C/FWD entries;
• opening balance equity.

You're now fully up to speed on accounting period closing. Time to get started!