Closing a book is a concept within bookkeeping & accounting coming from its early days in history. Physical books were used to write down each transaction and meant that at some point these books reached their last page. To solve this, closing entries were recorded on that book and opening entries on a new book, so new entries could continue with their correct balance values.

Early 19th-century German ledger

From the closing of books derived the concept of closing a period. If a book would be closed after a fixed period one could measure performance on a time base. Ever since that concept became a standard it has become an exciting moment to find out how an entity performed, to learn about its new position and to share this through standard reports.

Still using physical books, closing a period also often meant closing a book as in the image above the last page of a period was signed of with its closing entries and/ or totals to start a new period in a new book with those numbers.

Concepts, so strongly rooted in bookkeeping & accounting that many systems inherited these concepts.

But what if a book has no more physical limitations, and entries can be endless?

Continuous Balance Values

The most significant difference with a traditional book or system is Bkper's concept of Continuous Balance Values. The balance values on Bkper are updated and audited (closed) on every posted transaction. So, each posted transaction updates the position as well as the performance up to that moment.

The position of permanent accounts close any previous period at midnight and non permanent accounts are zeroed at midnight. So the midnight balance values initialize their position for any coming period. (Midnight is defined by the use of the timezone of the book)

This automatically implies that the balance values of permanent accounts are carried on to a new (financial) year and that non permanent accounts start the new year with a zero balance value.

The running balance of the Citi bank account, in the image above, resembles the concept of a continues balance value, where the closing value of one day is the starting value for the next day.

Since there is no limitation to the number of transactions on a Bkper Book, there is no more need to close a book. One simply continues to record transactions on the same book for as long as needed.

Closing a Period

Different than closing a book is the concept of closing a period, naturally leading to the question how to close a period on Bkper, especially since balances are updated and audited on each posted transaction.

The great news is, there is no specific action required to close one period, in order to open another period. Again, one can simply continue to record transactions on the same book for as long as needed.

Note: Locking a period below

Reporting a period

So, with an endless book of transactions, Continuous Balance Values and no closing date how do you report a period in Bkper?

Since the balances are closed on each posted transaction and each midnight closes the previous period, it lays implicit in the design of the system that a (dynamically) selected time range reports the performance and the closing position of that period.

Learn how to use Dates and Periods for reports in the Query Guide.

To understand this difference in concept it's good to illustrate this with an example:

The Saas Startup sample book holds transactions from January 2018 till February 2020. Therefore this book holds the reference of 2018 and 2019 to report.

The date (range) chosen to report a position (balance Sheet) for 2018 would be:

on:12/31/2018

and for 2019 it would be:

on:12/31/2019

The date range chosen to report the performance of a period (profit & loss) for 2018 would be:

after:01/01/2018 before:01/01/2019

and for 2019 it would be:

after:01/01/2019 before:01/01/2020

Locking a Period

To make sure that no spontaneous, malicious or erroneous modifications are made in a reported or audited period a lock date can be set on each book. Once a lock date is set, no more modifications or transactions can be recorded before that date. Only book owners and editors can change the lock date to an earlier date. This is the option that resembles the closing of a period in Bkper.

Did this answer your question?