AgilLink is designed as ‘financial-period based’ accounting system; which means that all periods can be closed, but at the same time any data existing in open periods is included in reports. So why close financial periods at all? What are the benefits to closing?
When financial periods are closed, the system consolidates all the information contained in the various journals (many), into a simple GL balance (one) at the financial period close date. This many to one is very important.
The primary reason to close financial periods is preventing additional transactions from entering the accounting system in a period which the accountant/bookkeeper has already reconciled. You might have already published reports for that period and attempting to post a journal into a close period will result in an error.
Close financial periods when all expected journals/transactions are posted. If an exception case comes up and you must enter a journal in a period previously closed, it is a simple process to reopen, enter the required transaction, and then close the period once again. This is the best practice.
The second reason to close financial periods is that system performance suffers greatly when many past periods remain open over a long period of time.
Most of the financial reports are GL balance-driven, and it is not necessary to go through every journal, instead looking at the fewer balances, unless you have not closed the period. Since there may be hundreds or even thousands of journals within a period, not closing negatively affects system performance. When the system goes through many journals, you wait longer for your reports.
By closing financial periods you not only keep your books in good order, but your productivity in the system is also improved. Win-win!