Period locks and closing the books
What locking prevents, how to handle activity that arrives after a lock, when reopening is justified, and how year end differs.
ConceptFor Bookkeepers, Firm staff, Business owners
What a lock does
A locked period refuses new postings dated inside it. Attempts are rejected rather than silently allowed — a manual entry is refused at save, and a machine posting becomes an exception with a period-locked reason.
What this protects:
- Statements you have already issued stay reproducible.
- Tax returns filed from those statements stay supportable.
- Reconciliations you locked stay valid.
- Comparative reporting stays stable, so last year's figures do not move.
When something arrives late
| Situation | What to do |
|---|---|
| Immaterial expense for a closed month | Record it in the current open period. Note the true period in the memo. |
| Material item you should have accrued | Record in the current period and consider whether the closed period's statements need to be reissued. That is an accounting judgement. |
| Error found in a closed period, not yet reported externally | Correct in the current period unless reopening is clearly cleaner. |
| Error found in a period covered by a filed tax return | Speak to your tax preparer before touching anything. The fix may involve an amended return. |
Year end
Year end is a monthly close with more scrutiny, plus the roll-forward: revenue and expense accounts close to retained earnings, and the new year starts with balance sheet accounts carried forward and P&L accounts at zero.
Additional year-end work:
- Physical verification of inventory and fixed assets, where they are material.
- Confirming loan balances against lender statements.
- Reviewing prepaid and accrued balances in full rather than by exception.
- 1099 preparation and W-9 gaps.
- Providing your tax preparer the trial balance, the general ledger, and the year's supporting documents.
Common questions
Yes. Locks are per legal entity, so one entity can be closed through June while another is still open for July.
It is an administrative permission and should sit with very few people. Every lock and reopen is recorded with an actor and a timestamp.
See alsoUsers, roles, and who sees whatThe audit trail and chain verification
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