What is a Period Close?
The purpose of “closing” a period is to establish a set of numbers that do not change. In many cases, this is done for accounting purposes so that accountants can create a reliable set of financial numbers that do not change and that can be reconciled to a corresponding set of transactions.
When you close a period you establish a fixed number for your Accounts Receivable (A/R – also known as the money that is owed to you), charges billed (sometimes referred to as Gross Revenue), and receipts posted (payments and adjustments) for a given period (usually a calendar month).
Once a period is closed the numbers are “set in stone” and can only be adjusted in future periods. In other words, if you have closed the month of June on July 5th, and on July 6th you bill out a charge for June 30th, this charge will appear in your July period.