Introduction
Welcome to this guide, designed to guide business users on how to utilize the Period Closing Voucher feature in Empress. This is a critical accounting tool that signifies the end of a fiscal period, ensuring that all profits and losses have been accounted for and your ledger is balanced.
Significance of the Period Closing Voucher in Business Operations
The Period Closing Voucher is an essential part of your business accounting process, marking the conclusion of an accounting period. This could be annually, quarterly, or monthly, depending on your business operations. The voucher ensures that special entries such as depreciation, changes in asset values, deferred taxes and liabilities, and updates on bad debts have been accounted for. This results in a reset of your income and expense accounts to zero, preparing for a fresh start in the new fiscal period.
How to Navigate to the Period Closing Voucher List
To find the Period Closing Voucher list in Empress, follow this path:
- Start from the Home page.
- Click on Accounting.
- Go to Opening and Closing.
- Select Period Closing Voucher.
Creating a New Period Closing Voucher
Creating a new Period Closing Voucher is as easy as following these steps:
- Navigate to the Period Closing Voucher list.
- Click on New.
- Set a Posting Date.
- Select the appropriate account, usually ‘Reserves and Surplus’.
- Add any Relevant Remarks.
- Click Save and then Submit.
Understanding the Fields in the Period Closing Voucher
- Transaction Date: This is the date you create the Period Closing Voucher.
- Posting Date: This is the date the entry should be executed, typically the last day of your fiscal year.
- Closing Fiscal Year: This refers to the year you are closing your financial statement for.
- Book Cost Center Wise Profit/Loss: When enabled, this field records closing entries according to each income & expense accounting entry’s cost center.
What Happens After Submission?
After submitting a Period Closing Voucher, accounting entries are created that reset all your Income and Expense Accounts to zero. The balance of Profit/Loss is moved to the Closing Account. This should be a liability account such as Reserves and Surplus, any Revenue Reserve account, or Owners’ Capital account.
If the Book Cost Center Wise Profit/Loss option is enabled, the net profit & loss will be allocated based on the cost center of each individual transaction.
Recap
The Period Closing Voucher is an essential tool in business accounting, marking the end of a fiscal period and ensuring a balanced ledger for the commencement of a new period. This guide has guided you through the process of creating a new Period Closing Voucher and explained the significance of each field. Remember, if accounting entries are made in a closing Fiscal Year after a Period Closing Voucher was created for that Fiscal Year, you should create another Period Closing Voucher to balance your accounts. For any further assistance, remember to reach out to our support team.