Understanding Fiscal Periods

A fiscal year is a 12-month accounting period used for financial reporting. LedgerBuk tracks fiscal years and manages the year-end close process, keeping your books accurate and compliant.

What is a Fiscal Year?

Your fiscal year determines:

• When your accounting year starts (e.g., January 1, April 1, July 1)
• When financial statements are prepared (at year-end)
• How income and expenses are grouped for reporting

Note

Supported fiscal year start months (standard quarter boundaries only):

• January (1) — Calendar year (January 1 – December 31). Used by most businesses.
• April (4) — April 1 – March 31. Used in UK, India, Kenya government, Japan.
• July (7) — July 1 – June 30. Used in Australia, US state governments.
• October (10) — October 1 – September 30. Used by US federal government.

These are the only options available during onboarding and in organization settings. This keeps your fiscal quarters in clean 3-month blocks, aligned with standard accounting conventions.

Fiscal Period Lifecycle

Every fiscal year in LedgerBuk goes through three stages:

Status	What’s Happening	Can You Post Entries?	Can You Reverse?
Open	Normal operations	✅ Yes	—
Closed	FY ended, grace period active	✅ Yes	—
Locked (manual)	You locked during grace	❌ No	✅ During grace
Locked (auto)	Grace expired, system locked	❌ No	❌ Permanent

The lifecycle flows like this:

Open → (FY ends, automatic close) → Closed → (you lock, or grace expires) → Locked

Tip

Closing is automatic — LedgerBuk closes the period for you when your fiscal year ends. Locking finalizes the numbers, and that’s where you review and take action.

How You Can Tell

LedgerBuk shows different status badges so you always know what’s possible:

• “Locked — Reversible” (amber badge) — You locked it manually and the grace period is still active. You can reverse if needed.
• “Locked” (green badge) — The lock is permanent (either auto-locked or grace expired). The period shows “Permanent” instead of a Reverse button.

How It Works

Automatic Close

When your fiscal year ends, LedgerBuk automatically marks the period as Closed. No closing journal entry is created yet — it signals that the year has ended and a grace period has begun.

You’ll see a banner on your dashboard letting you know the period has been closed.

Grace Period

After closing, you have a grace period (default: 14 days) to review and finalize your books. During this time you can:

• Post entries freely — corrections, adjusting entries, and late transactions are all allowed
• Preview the closing entry — see exactly which accounts will be closed and the net income or loss
• Lock when ready — finalize the books early if everything looks good

This is your window to get the numbers right before they become permanent.

Locking

Locking is the decisive step. When you lock a period (or the grace period expires and it auto-locks):

1. The closing journal entry is created — zeroing Revenue, Expense, and Drawings accounts into Retained Earnings
2. The period becomes sealed — no more entries can be posted to that fiscal year
3. The financial numbers are final and audit-ready

Note

Because the closing journal entry is created at lock time (not at close time), it always reflects your final, corrected numbers — not a preliminary snapshot.

How LedgerBuk Handles Fiscal Years

Automatic Detection

LedgerBuk determines your current fiscal year based on:

1. Your organization’s fiscal year start month (set during onboarding)
2. Today’s date

Examples (assuming today is March 15, 2026):

• January start: Your fiscal year is FY 2026 (January 1, 2026 – December 31, 2026)
• July start: Your fiscal year is FY 2025-2026 (July 1, 2025 – June 30, 2026)

Managing Fiscal Periods

Navigate to Period Close from the sidebar to:

• View your current fiscal period status
• See days remaining until year-end or until auto-lock
• Preview the closing entry (revenue, expenses, drawings, net income)
• Lock the period when you’re ready
• Reverse a lock during the grace period
• View history of past periods

Dashboard Notifications

LedgerBuk shows banners to keep you informed:

Notification	When It Appears	Can Dismiss?
FY Ending Soon	Days before your fiscal year ends (default: 14, 7, 3, 1 days)	✅ Yes*
Period Closed — Awaiting Lock	After automatic close, during grace period	❌ No
Grace Period Active	After manual lock, during remaining grace	❌ No
Final Warning	Last day before auto-lock	❌ No

Note

*Dismissible reminders reappear at each milestone (e.g., dismiss at 14 days, it reappears at 7 days). The final day reminder cannot be dismissed.

Best Practices

1. Prepare early

   Start your year-end checklist 2–4 weeks before the fiscal year ends.

2. Reconcile all accounts

   Ensure bank accounts, receivables, and payables are accurate.

3. Use the grace period

   Post any adjusting entries or corrections during grace — that’s what it’s for.

4. Review the closing preview

   Check that revenue, expenses, and net income look correct before locking.

5. Lock when confident

   Lock the period once you’re satisfied. If you spot an issue after locking, you can reverse the lock during grace.

Next Steps

• Locking a Period — How to review and lock your fiscal year
• Reversing a Lock — How to undo a lock if corrections are needed