> ## Documentation Index
> Fetch the complete documentation index at: https://help.agatabo.com/llms.txt
> Use this file to discover all available pages before exploring further.
# Financial Periods
> Understanding accounting periods and closing cycles
## Overview
**Financial periods** are defined time segments (month, quarter, year) used to organize accounting records and generate financial reports. Proper period management ensures accurate financial tracking and prevents errors.
## What is a Financial Period?
A financial period is a **specific timeframe** for which financial transactions are grouped and reported.
**Examples**:
* Monthly: January 1-31, 2026
* Quarterly: Q1 2026 (Jan 1 - Mar 31)
* Yearly: Fiscal Year 2026 (Jan 1 - Dec 31)
**Purpose**:
* Organize transactions chronologically
* Generate period-specific reports
* Track performance over time
* Lock historical data from changes
***
## Period Types in Agatabo
Organizations choose ONE period type at setup:
### Monthly Periods
* **Close frequency**: End of every month
* **Best for**: Active tontines with frequent transactions
* **Advantages**: Regular financial snapshots, timely error detection
* **Effort**: More administrative work (12 closings per year)
### Quarterly Periods
* **Close frequency**: End of every 3 months
* **Best for**: Medium-activity tontines
* **Advantages**: Less frequent closing, still regular oversight
* **Effort**: Moderate (4 closings per year)
### Yearly Periods
* **Close frequency**: End of fiscal year only
* **Best for**: Low-activity, small tontines
* **Advantages**: Minimal administrative burden
* **Effort**: Minimal (1 closing per year)
**Set at**: Organization creation (configured by system administrator)
**Change after setup**: Difficult (requires careful migration)
***
## Period Status
Each period has a status:
| Status | Description | Can Edit Transactions? |
| ---------- | ------------------------ | ---------------------- |
| **OPEN** | Current active period | ✓ Yes |
| **CLOSED** | Locked historical period | ✗ No |
**Only ONE period is OPEN at a time** - the current period.
***
## Period Closing
**Period closing** = Permanently locking a period's transactions.
### Why Close Periods?
**Data integrity**:
* Prevents accidental changes to historical data
* Ensures financial statements remain accurate
* Protects against fraud (can't alter past records)
**Audit trail**:
* Creates immutable historical record
* Required for audits and compliance
* Documents financial position at specific dates
**Performance**:
* Reduces database load (fewer active records)
* Speeds up report generation
### What Happens When Period Closes?
**Automatically**:
1. All transactions in period become **read-only**
2. System posts **closing journal entries**:
* Close temporary accounts (revenue, expenses) to zero
* Transfer net income to retained earnings
* Prepare accounts for next period
3. Period status changes to **CLOSED**
4. Next period becomes **OPEN**
**Example** (closing December 2025):
```
Before closing:
- December revenue: 500,000 RWF
- December expenses: 300,000 RWF
- Net income: 200,000 RWF
Closing entries:
Debit: Revenue 500,000
Debit: Expenses (reverse) 300,000
Credit: Retained Earnings 200,000
After closing:
- Revenue account: 0 (reset for Jan 2026)
- Expenses account: 0 (reset for Jan 2026)
- Retained Earnings: increased by 200,000
```
### Before Closing Checklist
All transactions recorded through period end
Bank accounts reconciled
Trial balance balanced (debits = credits)
Financial statements generated and saved
No pending corrections or adjustments
**Warning**: Closing is **permanent** for that period. Complete all fixes first.
***
## Current Period
The **current period** is the one open period where transactions are recorded.
**Examples** (assuming monthly periods):
* Date: June 15, 2026
* Current period: June 2026 (June 1-30)
* Status: OPEN
* All June transactions recorded here
**Rules**:
* Transactions dated in current period: Allowed ✓
* Transactions dated in closed periods: **Blocked** ✗
* Transactions dated in future: Usually blocked (some systems allow)
***
## Transaction Dating
**Transaction date** determines which period it belongs to.
**Example**:
* You record loan payment on July 5, 2026
* Payment was actually received on June 28, 2026
* **Which date to use?** June 28 (actual date)
* Transaction goes into June period (even if recorded in July)
**Best practice**: Record transactions with actual date, not entry date.
**Problem scenario**:
* June period already closed
* You discover unrecorded June 28 transaction
* Cannot record in June (closed)
* **Solution**: Record in July with adjustment note explaining it's a June transaction correction
***
## Fiscal Year vs Calendar Year
**Calendar year**: January 1 - December 31
**Fiscal year**: Any 12-month period (doesn't have to align with calendar)
**Examples**:
* Calendar: Jan 1, 2026 - Dec 31, 2026
* Fiscal: July 1, 2025 - June 30, 2026
* Fiscal: Apr 1, 2026 - Mar 31, 2027
**Why use fiscal year?**
* Align with business cycle (harvest season, busy season)
* Avoid year-end coinciding with busy period
* Tax optimization (in some jurisdictions)
**Agatabo**: Typically uses calendar year for simplicity, but can be configured for fiscal year.
***
## Reopening Closed Periods
**Can you reopen a closed period?** Sometimes, with restrictions.
**Agatabo policy**:
* Can reopen **most recent** closed period only
* Cannot reopen older periods (prevents data manipulation)
* Requires administrator permission
* Should be rare (emergency corrections only)
**When to reopen**:
* Discovered significant error in closed period
* Missing transaction that materially affects reports
* Regulatory requirement to correct
**When NOT to reopen**:
* Minor errors (post adjustment in current period instead)
* Convenience (trying to avoid adjustment entries)
* Regular practice (defeats purpose of closing)
**Process**:
1. Administrator reviews reason
2. Document why reopening is necessary
3. Advanced > Period Closing > Reopen Period
4. Make corrections
5. Re-close period immediately
***
## Comparative Period Reporting
**Comparative reports** show multiple periods side-by-side.
**Example - Monthly comparison**:
| Item | May 2026 | June 2026 | Change |
| ---------- | -------- | --------- | ------- |
| Revenue | 450,000 | 500,000 | +50,000 |
| Expenses | 280,000 | 300,000 | +20,000 |
| Net Income | 170,000 | 200,000 | +30,000 |
**Example - Year-over-year**:
| Item | 2025 | 2026 | % Growth |
| ----------------- | ---- | ---- | -------- |
| Total Savings | 10M | 12M | +20% |
| Loans Outstanding | 8M | 11M | +37.5% |
| Net Income | 800K | 950K | +18.75% |
**Use**: Identify trends, measure growth, spot problems early.
***
## Period Closing Timeline
**Monthly closing workflow**:
| Day | Task |
| -------------------- | ---------------------------------------------- |
| Last day of month | Record final transactions |
| Day 1-2 of new month | Download bank statements, begin reconciliation |
| Day 3-5 | Complete reconciliation, run reports |
| Day 5-7 | Review with treasurer/board |
| Day 7-10 | Close period, archive reports |
**Key**: Don't wait until day 20 to close prior month. Do it early while memory is fresh.
***
## Best Practices
**Close regularly**: Monthly closing is best for active tontines
**Close promptly**: Within 5-10 days of period end, not weeks later
**Don't skip periods**: If you skip, creates gaps in financial history
**Save reports before closing**: Export Balance Sheet, P\&L, etc. for archives
**Minimize reopening**: Use adjustment entries in current period instead
***
## Need Help?
Detailed closing procedures
Step-by-step checklist