Close month

In accounting there is a process that had to be made at the end of each month, you have to close processing of transactions, journal entries, and financial statements. This process is called “Closing the month”. EasyERP accounting software can help you do this task with only a few clicks. To enter the close month menu of the EasyERP tap on the corresponding button in the Accounting menu, as shown here:

close month main menu

If done so you will enter the close month menu of the EasyERP Accounting menu. Depending on the state of your current accounting database you can see a different picture. If you open up this menu first time you will see the following picture:

close month preview example

Before we continue telling you how to use the EasyERP Accounting close month instrument let us explain what does this action do, and what purpose does it serve.

As we have stated before EasyERP uses the accrual method of accounting. According to this method, it is imperative that the financial statements reflect only the transactions and journal entries that are relevant to the current month’s revenues and expenses, and end-of-the-month assets and liabilities. In other words, the monthly close must achieve a proper cutoff of each month’s financial activities.      This means that closing the month will acknowledge all the profits and expenses that were made during that month, and move the balance to income summary and complete a series of closing activities to ensure that all material transactions. These closing activities include:

  • Complete all customer invoicing;
  • Accrue any revenue that cannot be billed;
  • Ensure that all supplier invoices have been entered;
  • Accrue any expenses for which no supplier invoices were received;
  • Complete the bank reconciliation;
  • Calculate depreciation;
  • Calculate income taxes;
  • Verify the contents of all asset and liability accounts;
  • Complete the financial statements and review for errors.

The number of closing activities may be quite substantially longer than the list shown here, depending on the complexity of a company’s operations and the number of subsidiaries whose results must be consolidated. This actions should be done by the accountant before closing the month. You have to do this procedure before looking into any of the financial reports, that are provided in the EasyERP accounting software if you wish to receive correct data.

So to close the month in EasyERP press on the Close button at the top of the menu and this menu will open:

create close month menu

Here you can select which month you want to close. By default, the current month will be selected. After you have made the choice, press the Generate button to finish up the process.

EasyERP accounting software allows you to make updates to data of the time period that has already been closed. If you have done some changes of that type, don’t forget to reclose the month, in order to keep the accounting consistent.

To reclose the month you will have to do following steps. Select any month or months by checking in the box that is left to them. Reacting to your action, Close button will turn into Reclose button. As you may already guess, all that is left to finish is to tap that button.

closed month example

Also, you will be happy to know, that you can click on any month to see the closing balance of accounts that were active in the close month procedure.

summary close month