The Financial Month Closing feature ensures the integrity of your financial data by restricting changes to time entries, expenses, and services in closed financial periods.
This functionality is designed to help organizations avoid discrepancies in submitted revenue data, ensuring the accuracy of records once entered into external accounting tools.
The Financial Month Closing feature is available on the Ultimate subscription plan.
Why Use Financial Closing?
If you export revenue data from Productive into accounting tools for specific periods (e.g., month, quarter, or year), you need to ensure that the submitted data remains consistent. Financial Month Closing enables you to "lock" financial periods, preventing any modifications to:
Time entries
Expenses
Services with tracked time or expenses
Once a financial period is locked, only users with specific permissions (e.g., Admins) can make changes. Others can add new services but cannot edit or delete existing ones tied to locked periods.
Setting Up Financial Closing
To activate Financial Month Closing, follow these steps:
Navigate to Settings > Financial Month Closing.
Toggle the feature on for your organization.
Select a Lock Date — choose the day of the month when the previous month will automatically lock. You can set any day.
Examples of Lock Date Behavior
Today is the 5th, and the lock date is the 4th
Changing the lock date to the 6th will apply to the next month.
Today is the 5th, and the lock date is the 6th
Changing it to the 7th will apply to the current month and all future months.
Today is the 5th, and the lock date is the 6th
Changing it to the 4th will lock the current month immediately upon saving.
Revenue Recognition and Locking
The revenue recognition settings in Productive determine how revenue is allocated and when it is recognized for your budgets.
To ensure accuracy when locking financial periods, it's important to align your revenue recognition setup with recommended best practices.
If your current settings don't optimally align with the Financial Month Closing feature, you'll be notified by a yellow banner in both the financial month closing settings and the revenue recognition settings. This banner will guide you toward the recommended configuration.
Recommended Setup
To minimize discrepancies in your financial records when locking periods, especially if budgets span multiple months, follow these recommendations:
For Open budgets: Set the revenue recognition to Do not recognize. This prevents revenue from being prematurely recognized during the ongoing work phase, avoiding unintentional shifts in your financial records for periods that aren't fully completed.
For Delivered budgets: Set the revenue recognition to Delivery date. This ensures that revenue is recognized only after the budget is finalized and delivered, reflecting actual earnings rather than incomplete data.
By following these recommendations, you'll avoid prematurely recognizing revenue or leaving revenue unrecognized when periods are locked, keeping reports accurate and in sync with actual performance.
Month Overview
The Month Overview section displays all previous and current months, along with their lock/unlock status.
Each month is automatically added to the list at the start of the new month. From here, Admins or authorized users can manually lock or unlock specific months as needed by clicking on the padlock icon to the right.
What Happens When a Month Is Locked?
Once a financial period is locked, the following restrictions apply:
Time Entries
Existing time entries in a locked period cannot be updated or deleted.
New time entries cannot be created for a locked period.
Expenses
Expenses tracked in a locked period cannot be updated or deleted.
New expenses cannot be created for a locked period.
Services
Services with tracked time entries or expenses cannot be updated or deleted.
Bookings with Auto Tracking
Bookings with Auto Tracking enabled cannot be created, updated, or deleted for locked periods.
In each case, users attempting to make changes will see a generic error message: "Cannot update time entry/expense/service because the financial period is locked."
Permissions
Under the Financials permission set group in the Permission Builder, a new permission called Financial Month Closing is available. Users with this permission can:
Turn Financial Month Closing on/off.
Update the lock date.
Lock or unlock specific months.
The system permission equivalent for this feature is the Admin permission.
