---
schema_version: "1"
id: 81369693cfa62c9b215b494af1ec25826a16c7cdcbb56cb126da5222a1f54df1
title: Importance of Legal Entity Accounting Period Closure
collection: admin
version: current
locale: en-us
portal_url: https://docs.salesforce.com/admin/current/en-us/ind/264-0-0/billing_legal_entity_accounting_period_closure_importance.md
canonical_url: https://help.salesforce.com/s/articleView?id=ind.billing_legal_entity_accounting_period_closure_importance.htm&release=264.0.0&type=5
source_site: help.salesforce.com
content_type: documentation
content_hash: ee038b57b6b9306a3e76f4008e5f3e7b28d1248d7267486214b6eff9d53ac6e8
description: Closing an accounting period, both at the legal entity level and the enterprise accounting period level, is a formal act that signifies all transactions within that period are posted from sub-ledger to your enterprise general ledger.
products:
  - Revenue Cloud
release: "264"
---
# Importance of Legal Entity Accounting Period Closure

Closing an accounting period, both at the legal entity level and the enterprise accounting period level, is a formal act that signifies all transactions within that period are posted from sub-ledger to your enterprise general ledger.

### Required Editions

<table class="slds-table slds-table_bordered slds-max-medium-table_stacked slds-m-bottom_small edition">
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          <td class="slds-cell-wrap" style="vertical-align:top;">Available in: Lightning Experience</td>

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          <td class="slds-cell-wrap" style="vertical-align:top;">Available in: <strong>Enterprise</strong>, <strong>Unlimited</strong>, and <strong>Developer</strong> Editions with
            Revenue Management (formerly Revenue Cloud)</td>

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            <p>The feature is available for the Invoice and Credit memo records, and their related
              records with <a href="https://help.salesforce.com/s/articleView?id=ind.revenue_licenses_areas_and_features.htm&amp;release=264.0.0&amp;type=5">the Revenue Cloud Advanced license or the Revenue Cloud Billing
                license</a>. </p>
            <p style="margin-bottom:0;">This feature is available for the Payment, Refund, and Debit Memo records,
              and their related records with <a href="https://help.salesforce.com/s/articleView?id=ind.revenue_licenses_areas_and_features.htm&amp;release=264.0.0&amp;type=5">the Revenue Cloud Billing license</a>. Contact your Salesforce account
              executive for more information.</p>
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Closing an accounting period is a critical step in the accounting cycle that ensures accuracy and finality of financial statements.

- Accurate transaction details: When accounting periods are closed, transaction records are updated to have the latest closing balances. These closing balances are copied as the opening balances for the next period.
- Prerequisite to close legal entity accounting period: Closing the previous period and creating next period is often a prerequisite for fully recognizing transactions in the current period.
- Prerequisite to close next period: Closing the current period is often a prerequisite for fully recognizing transactions in the subsequent period, maintaining a clean progression of financial cycles.

## Example: Streamlining Accounting Period Closure

[Continuing with Innovate Solutions Corp.'s journey,](https://help.salesforce.com/s/articleView?id=ind.billing_accounting_periods_explain.htm&language=en_US) after successfully assigning legal entities to accounting periods and the system associating the billing transactions with their accounting periods, they further streamline their accounting period closures.

- Streamlined Legal Entity Accounting Period Closure: At the end of the month, accounting teams close the legal entity accounting periods. A maximum of 3 Data Processing Engine (DPEs) definitions are run automatically based on the licenses your Salesforce org has, to close the legal entity accounting period.
- Accounting Period Closure: After all legal entity accounting periods for a period were closed across all legal entities, the accounting period itself is closed, indicating the accounting period is closed as well in there enterprise general ledger.

This comprehensive process significantly reduces time to reconcile and improves audit readiness for Innovate Solutions Corp.