Period End - What is a period end?
The period end dates the end of your financial year. The period (or month) end date is used to report your business activity
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The period end date is used to report your business activity at the end of a financial period. This can differ from country to country, or even from business to business. However, most financial periods occur according to the tax year, in order to better keep track of Self Assessment and tax filing.
Why use an accounting period?
Accounting periods provide your business finances with a clear structure of start and end dates that allow you to aggregate all of the financial information you have kept track of over the course of that period.
This information can then be used to generate reports, which provide a more cohesive view of the financial health of your business, both internally for management but also for shareholders and potential investors to gain an idea of how well the business is doing and better predict future profitability.
Time for reporting
If you base your financial periods on calendar months, then at the end of each month (the period end) you would run your profit & loss account along with your balance sheet in order to see how your business is doing.
Of course, these reports can be run any time during the period but at the end - once you have entered all your information, sales and supplier invoices, customer receipts, supplier payments, salary details etc. - it is useful to generate your reports in order to establish your company’s position at the period end.
Closing the period
Once this has been completed and you have created and viewed your reports (these are sometimes called “Management Reports”) you can close the period so that no further information can be entered in that period that could potentially distort the figures that were already reported to the tax authorities, for example.
Some companies base their periods on weeks and choose to end on the same day of the week, for example the Friday closest to the 31st. When this system has been adopted, some fiscal years will have 52 weeks and others 53 weeks.
Period end and Debitoor
In Debitoor’s larger plans, you can generate reports with just a click, including the profit & loss, balance sheet and VAT report. When your period has ended, you can close the VAT report to start again with a new period.
Your invoice numbers can also be customised to include the date and/or period. Check out our blogpost on our suggestions for your invoice numbers and learn how easy it is to update them in Debitoor.