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Why Changing Your Financial Period Names Isn't as Simple as It Sounds
- EH Lim
- Jul 3
- 3 min read
You're reviewing a January 2015 invoice, but your MoneyWorks accounting system now shows it filed under "October." The dates are correct, but something's off. A simple period name change would cause years of confusion.
The Original Setup
Let's say your company starts its financial year in April and runs through to March, since the shareholders registered the company in April; this means:
Period 1 = April
Period 2 = May
Period 3 = June
And so on...
Period 10 = January
Period 11 = February
Period 12 = March
This system works fine until, for whatever reason, the management decided to change the financial period from "April to March" to "January to December".
Making the Change of Financial Period Name
When switching the financial year from "April to March" to "January to December", Period 1 will now be January instead of April. From the Show menu of the MoneyWorks accounting system, you select the period name table, and rename the periods as:
Period 1 = January
Period 2 = February
Period 10 = October
Period 11 = November
Done! But here's where things get interesting.
What Happens to Old Records?
Here's the part that catches people off guard. Let's say you have two old invoices:
Invoice 1870 from January 2, 2015 (recorded initially as Period 10)
Invoice 1891 from February 4, 2015 (recorded initially as Period 11)
After you change your period naming system, the original period (Period 10 and Period 11) tagged in the invoices remains unchanged. However, now Period 10 refers to October, not January. And Period 11 means November, not February.
This renaming creates a peculiar situation—even though the actual invoice dates haven't changed—where the period of the January invoice changed from January to "October", and the period name for the February invoice changed to "November".
Why This Matters
You might wonder: "Can't I just update all the old records?" The answer is no, and here's why.
The period numbers are part of your audit trail—essentially, a permanent record of how the user initially processed the transactions. Changing these numbers would be like erasing part of your company's financial history. Auditors, tax authorities, and forensic accountants require access to the original digital records of your transactions.
Like the source documents, the digital data has to maintain its reliability.
The Practical Impact
What does this mean for your day-to-day operations if you decide to change the period name?
For new transactions, everything works smoothly with your new naming system. January invoices fall in Period 1 (January), February invoices in Period 2 (February), and so on.
For old transactions, please note that 'Period 10 from old records' refers to January, while 'Period 10 from now' refers to October. Your accounting software will still display the correct dates, but the period names may appear incorrect.
For reporting purposes: When reviewing historical reports, please note this change. A report showing "Period 10" activity could include both January transactions (from before the change) and October transactions (from after the change).
The Bottom Line
Although MoneyWorks allows the user to rename the period name, you should not use it when you have posted data. Rename the period when there is a mistake made at the beginning (when setting up the file), but not after you have officially rolled out.
Renaming the period doesn't erase the past. Your old records keep their original period numbers as part of the permanent audit trail. It's a digital footprint that maintains the integrity of your financial history.
The key takeaway? When you're setting up your financial periods, think carefully about your naming system from the start. However, if you do need to make a change later, be aware of the implications of posted transactions.
If you have posted transactions, you should start a new company file instead of renaming the financial period name.
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