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Period Thirteen

A thirteenth period is often used by companies as a placeholder at the end of the year for adjustments to the books before closing. These are often provided by the accountant. Examples might be debt write-offs or interest deductions or earnings from investments that aren’t reported until well after December (if that’s the end of the accounting year.) The bookkeeper enters these into the 13th period to keep them separate from any specific month. That way these entries don’t skew the income or expenses of those months. Once all those entries are made, the year is then closed.

A thirteenth period was much more common before computerised accounting systems, simply because it took so much longer to ‘balance the books’ (literally). Nowadays, many of our customers dispense with it altogether. However, for many businesses, the 13th period is still an important tool–because it -does- give you the flexibility to add entries to the year ex post facto without altering any individual month’s totals.

Simple Accounting supports up to ninety open periods per accounting year so a thirteenth period is easy to achieve by setting the Number Of Periods Per Accounting Year field to ’13’ in Setup|General Ledger. The important thing to remember when using a 13th Period is that when you run the Period Update on the last period of your accounting year you close that accounting year. So you should not run that Period Update until you have all your entries in place and are ready to move into the next fiscal year.

Last Revision: 01.30.2011

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