Station 7 of 10
The close and reports in SAP Business One
What you leave this station with
Running a period close step by step, reading the three statements and defending every number in them, and writing a query that produces a report that did not exist.
At the previous station you learned where the numbers come from. This station assembles them and closes them.
It is the station that turns you from a user into someone useful. Anybody who runs the cycles is replaceable by somebody trained for a week; anybody who closes a period and writes a report that did not exist is not.
The accounting period — a lock, not a button
A period in this product is an object with a state: open, closed, or fully locked.
Closing is not a formality; it is what stops an entry being posted into a month whose numbers were read and signed off. Anyone leaving periods open presents a report in March and finds it changed in April, without anybody having made a mistake.
The rule: keep one period open, and close it before you open the next. Working with three periods open at once accumulates errors instead of isolating them.
What precedes the statements — four reconciliations
A statement is not read before its sources are reconciled. Four reconciliations, done in order:
| Reconciliation | What it compares | What a difference means |
|---|---|---|
| Bank | The bank statement against the bank account | An uncashed cheque, or a movement never posted |
| Receivables | The ageing against the account balance | An unmatched invoice or receipt |
| Payables | Vendor statements against their balances | Usually the intermediate account balance |
| Inventory | The inventory report against the stock account | A movement posted with no accounting effect |
The third row takes you straight back to station four: the intermediate account between receipt and invoice is the first thing to examine when a vendor’s balance does not agree with their statement.
That is what it means for the path to be connected — no station is read on its own, and the effect of every decision appears three stations after it was taken.
Internal matching — the idea that gets missed
Besides the reconciliations above, there is matching between movements within a single account: this receipt settles that invoice, this payment settles that note.
Without it the balance stays right in total and the ageing is a lie in detail — an invoice settled two months ago shows as overdue, and an old receipt shows as unapplied.
Read that sentence twice, because it is the source of most “the report is wrong” complaints on live projects: the report is not wrong; the movements are unmatched.
The three statements — and what gets asked about them
The trial balance proves the ledgers balance. It does not prove they are correct. An account on the wrong side leaves the balance balanced.
The income statement is read with one question: does the cost in this statement belong to the revenue above it? — which is the whole of station five, and the gap between delivery and invoicing answers it.
The balance sheet is read by a reconciliation: does the stock account on it equal the inventory report? If it does not, the cause is at station six rather than here.
Notice the pattern: every question at this station is answered at an earlier one. The close fixes nothing; it exposes what was never controlled.
The reporting layer — and the difference station two already decided
The traditional reporting tool is available on both databases, and it is what is used to design invoices and customer documents with a prescribed layout.
The deep analytics and interactive analysis layer is available on the analytical database alone — exactly as set out in the table at station two.
The practical effect is immediate: what you are able to build in reports is constrained by a decision taken before you opened the system. Anybody promising a client an interactive analytical dashboard on the lighter database is promising what they do not have.
The query — the fastest skill that makes you useful
This was said at station one and again at station two. Here it is executed.
Standard reports cover the expected, and the client asks about the unexpected: which customers bought a particular item and have not come back in ninety days? Which vendors were late more than twice this quarter?
No standard report answers those, and the answer is a query of ten lines.
The skill itself does not need the product’s environment to be learned — it is learned on any free database and transfers whole, which is why it was the third item on the list of what to do before you have an environment.
More important than writing the query is understanding where you are writing. This product stores everything in tables: documents, entries and balances. Anyone who knows that an invoice line sits in one table and its header in another writes their query at the first attempt, and anyone who does not goes hunting for a button that does not exist.
What you actually do at this station
- Close a full month after running a purchase cycle and a sales cycle through it, with the four reconciliations in order.
- Leave one invoice unmatched deliberately, read the ageing, then match it and read again. The difference between the two readings is the lesson.
- Produce the three statements, and defend every number in them with a sentence that traces it back to its document.
- Write one query answering a question no standard report answers, and verify its result by hand on a sample.
- Design an invoice layout with a logo and tax details, because it is the first thing actually asked of you on any project.
The three commonest errors
One: leaving periods open. It looks like flexibility, and it ends with a report that changes after it was submitted.
Two: reading the trial balance as proof of correctness. Balancing proves the equation and does not prove the account is right.
Three: building ten reports before controlling their sources. A report does not create data; it moves it. A beautiful report over unreconciled data is more dangerous than no report at all, because it gets believed.
What close quality does to reading a company’s numbers is set out in the SAP Business One guide, and the general logic of the financial cycle — from the entry to the statement — is in the financial cycle and the close.
The acceptance test for this station
- Close a month with the four reconciliations, and document every difference and its cause.
- Explain the difference between a correct balance and a correct ageing, and why they diverge.
- Produce the three statements and defend every number by tracing it to a document.
- Write a query answering a question no standard report answers, and verify it by hand.
- Name two analytical functions unavailable on the lighter database, and what that means for what you promise a client.
What comes next
The numbers are correct and closed. The next station asks: are they legally acceptable? — localisation and e-invoicing, containing the question that changes a whole contract: who ships compliance, and who carries the responsibility when the regulation changes?