Improve your cost accuracy with inventory period closing
Avoid potential stock and cost miscalculations with our latest update, which increases the accuracy of cost calculations with closed inventory periods.
To aid you in keeping your accounting data more accurate and precise, we are excited to introduce Katana’s inventory period closing. This update helps you avoid changes to previous periods which could lead to numerous recalculations and potential mistakes in your costs.
Continue reading to learn more about why this improvement is essential for any business.
Why is the inventory period closing crucial?
All companies have some form of a closing period, where accountants wrap up and review earnings and expenditures for the preceding fiscal cycle. However, depending on the business, there can be differences in the regularity of these processes.
The process of closing at the end of a month helps businesses collect financial accounting information, reviews, and reconcile records each month. For some companies, this process is a reporting requirement to assist in keeping accurate records throughout the year.
Other businesses put off closing each month or even choose to close at the year’s end. In these cases, there is usually significantly more time spent preparing reports within tight deadlines.
When using software like Katana, inventory period closing can help improve the accuracy of past data. Changes to older inventory records can consequently influence the current inventory and costs numbers. Unless the period is closed and changes limited, every time someone makes a change, these numbers are recalculated.
Even if you’re unfamiliar with this kind of workflow, we’re sure you’ll see the benefits of implementing period closing as it helps keep your numbers more precise.
How it works in Katana
In Katana, the current and previous month are considered open inventory periods while everything before that is an automatically closed inventory period. If a period is closed, you can no longer make changes to the following:
- Purchase orders
- Sales orders
- Manufacturing orders
- Stock adjustments
- Stock transfers
These limitations help you avoid numerous cost recalculations triggered by inventory changes and provide you with an accurate picture of current stock. You can find more details about this update in our Knowledge Base article.
Manually closing an inventory period
Although Katana will automatically close inventory periods for you, we know companies have their own regional-specific rules depending on local regulations. To counter this, you’ll also be able to manually change your closing date. Manual inventory period closing enables closing the period earlier than Katana automatically would and allows you to open up a previously closed period.
Happy inventory closing!