Accounting periods, also known as reporting periods, are periods of time for which a company or organization reports financial performance by generating, for example, their income statement or balance sheet. Typically, accounting periods refer to the company's fiscal year, which can contain several accounting periods, such as months or quarters.
For many companies the fiscal year doesn't align with the calendar year, for instance when the fiscal year ends on June 30 rather than December 31. For newly created companies, the fiscal year might even actually be longer than 12 months.
Business Central only requires accounting periods if you want to close an income statement, or run data compression tasks.
You can use accounting periods in reporting such as when you're reviewing posted entries on the Balance/Budget page where the reporting interval is specified. One of the options you might specify is to report by accounting period. You can also build a financial report that compares results for different accounting periods.
Note
Posting dates are controlled by the following fields on the General Ledger Setup and User Setup pages,
- Allow Posting From
- Allow Posting To
- Allow Deferral Posting From
- Allow Deferral Posting To
Accounting periods don't control posting dates.
Fields in an accounting period
The Accounting Periods page includes several important fields that control structure and status. The following table describes the fields.
| Field name |
Description |
Remark |
| Closed |
Indicates that the fiscal year is closed. |
This setting doesn't prevent posting. When you use the Close Year action, this checkbox is selected automatically. You only need to close accounting periods one time per year at year-end. |
| Date Locked |
Prevents changes to the start date of an accounting period. For example, changing 01/01/2026 to 01/05/2026. |
This setting affects structure, not posting. The checkbox is automatically checked when you use the Close Year action. |
| Inventory Period Closed |
If you use inventory periods, you should close them on a monthly basis. When you close an inventory period, the status flows into the Accounting Periods checklist and supports accurate inventory reporting. |
Creating a new fiscal year
You can create accounting periods in bulk by using the Create Fiscal Year batch job, or by doing so manually.
To clear the New Fiscal Year checkbox for a closed year, you must first clear the Date Locked checkbox.
Tip
The New Fiscal Year checkbox should only be selected for the first month of the fiscal year.
How to create accounting periods in bulk
Use the Create Fiscal Year batch job to divide a fiscal year into periods of equal length.
- Choose the
icon, enter Accounting Periods, then choose the related link.
- Choose the Create Year action.
- In the Starting Date field, enter the date on which the fiscal year starts.
- In the No. of Periods field, enter the number of accounting periods to divide the fiscal year into. There can be up to 365 periods in a year.
- In the Period Length field, enter a duration for each period. Duration identifiers include 1M for one month, 1Q for one quarter, and 1Y for one year.
- Choose OK.
How to create accounting periods manually
If the accounting periods in your fiscal year have different durations, such as the 4-4-5 calendar used in retail, you can manually set it up.
- Choose the icon, enter Accounting Periods, then choose the related link.
- In the Starting Date field, enter the date on which the fiscal year starts. The Name field shows the name of the month.
- Choose the New Fiscal Year checkbox to indicate that this period is the first in the year. Business Central uses this period to determine which periods to close at year-end.
- Repeat steps 2 and 3 for each remaining period.
Closing a fiscal year
Closing the fiscal year is one of the tasks for closing the books. After you close a fiscal year, the Closed and Date Locked check boxes are selected for all periods in the year. You can't reopen a year or clear the check boxes.
Note
You must always have at least one open fiscal year. Before you close a year, ensure that a new year is created. Also, after you close a year, you can't change the starting date of the following year.
- Choose the icon, enter Accounting Periods, and then choose the related link.
- Choose the Close Year action.
Posting entries to a closed fiscal year
Although a fiscal year is closed, you can still post general ledger entries to it. When you do, the entries are marked as posted to a closed fiscal year and the Prior Year Entry check box is selected. By default, the check box isn't displayed on the page, but you can add it. The next steps are to close the income statement accounts and transfer the year's results to an account in the balance sheet. Repeat these steps each time you post entries to a closed fiscal year.
Contributors
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Related information
Closing the Books
Closing Years and Periods
How to Work with Financial Reports
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