How to : Create a New Posting Period in SAP Business One

Welcome to the session on How to Create a new posting period in SAP Business One. 

Your company must create new posting periods at the start of each fiscal year. The posting periods need to be defined within SAP so that transactions can be attributed to each fiscal period within the new year.  A fiscal year can line up with the calendar year or it can be offset based on your company needs. 

A few key points to consider:

1. The start of fiscal period can only be on the first of the month.

2. Create the oldest posting periods first to ensure no gaps or overlap in periods. 

3. Posting Periods cannot overlap with one another. 

4. Each transaction in SAP has a posting date that determines which corresponding period it is recorded to.

5. Once posting periods are created they can be modified but not removed.

6. If there are no fiscal periods setup for the current period the users will get an error message stating that the

"System date deviates from all company's fiscal years". It is important to create the periods ahead of time to avoid confusion. 

Creating a new period

To create a new posting period the financial administrator must go to the administration module, system initialization, and posting periods. Here you will see all the posting periods that already exist. Check to see whether or not the periods already exists.

Before we create a new period there are two options to consider: 

1. Create new periods with due date into the next financial year. 

This automatically sets the Due Date To date of the new posting period to the last day of the selected month to end of of the next fiscal year.

This is very helpful for documents that are due in future periods, for example, an AR invoice that is created on December 20th but only due on Janaury 20th in the next fiscal year.

We are going to select "Yes" and choose December.

2. Automatically update period status to 'closing period ' for existing periods x number of days after the new period starts. 

Automatically assigns the status Closing Period to periods that have already ended after a certai number od days. We are going to set this to "Yes" and the number of days to 14 days. 

To create the new posting period click "New Period" Button. 

• Enter the period code and period name. These are often the same and usually the fiscal year. 
• Sub-Periods are created automatically by SAP Business One in the fiscal year based on your selected type of sub-period. The four available sub-periods are: year, quarter, month and day. You define the sub-periods based on the company business need: 
  • A Year has one sub-period.
  • Quarters have four sub-periods.
  • Months  contain twelve sub-periods.
  • And Days can have any number of sub-periods.
    
    Using your selection, the system automatically creates the corresponding number of posting periods. A reason for defining sub-periods will be the ability to lock a past period so that no additional postings can be made by any user. 
• The Posting Date, Due Date and Document Date Range is automatically determined by the start of the fiscal year date. Since we selected the "Create new periods with "Due Date" in the next financial year it is going to set the fiscal years due date to the end of the next fiscal year. 

Once we click Add SAP will create each sub period based on our selection criteria. 

Now we can see all the posting periods we just created. Let's look at a single posting period. 

If we were to post a transaction to January 15th 2022 it will fall into 2022-01 period because the posting date range is January 1st 2022 to January 31st 2022.

Any transaction posted to this period can have a due date up to December 2023. This can be modified if required.

Any transaction posted to this period can have a document date (also known as tax date) up to January 31st, 2022.

The default status for the newly created posting period is "unlocked".

This can be changed manually to any of the following: 

• Unlocked. This is the default status for new period creation. This status allows all users to post any type of transaction.
• Unlocked Except Sales. This status allows authorized users to post all types of transactions except for sales documents. This period status is often used at month- end time.
• Closing period. This status allows authorized users to post all types of transactions. Users that are not authorized for this period status cannot post any activity to this period status. In the posting period setup screen, you can determine the number of days, after the period has expired, to automatically change the period status to this status. This is commonly used at month-end or year-end time.
• Locked. This status prevents all users from posting any activity to this period status. The status archived is set automatically and cannot be manually set. It is set by the data archive wizard and no transactions or documents can be posted.

This concludes the session on creating a new posting period in SAP business one. Thank you for your time.