How the Start & End Date of Your Period Set the Opening Balance & Closing Balance
When setting up a Period, among other things, you will be asked to set a Start Date and End Date for your Period. Other than aesthetically displaying when a respective Period started and finished, these dates also affect the royalty accounting process by setting the Opening Balance and Closing Balance of your statements. Only transactions that fall between this Start and End Date will be included in the statement.
Start Date - This sets the Opening Balance of the statements. Generally, this should be set to one day after the last Period's End Date, so that the statements' balances of one Period follow seamlessly onto the next.
End Date - This sets the Closing Balance of the statements. Any Transactions (such as Advances, Payments & Adjustments) falling after this date will not yet be reflected in this Period's statements.
Imagine we are creating a Period for the Accounting Period 2020H2, referring to any royalties earned in the last 6 months of the year 2020. A common way to set your Period Dates would be to set the Start Date to the 1st of July 2020 and the End Date to the 31st of December 2020. In the below example of a Contract's Transactions tab, the 2020H2 statement's Opening Balance is set to 25.83 and the Closing Balance is set to 3,636.41. The Advance is excluded from the Closing Balance, because it falls after the Period's End Date, and will only be deducted in next Period's statement.
In our second example, we are looking at the same Contract and the same Period, but this time we wanted all Transactions (such as Advances, Adjustments & Payments) that have been created up until the 31st of March to be reflected in our artists' Closing Balances. To do so, we set our Period's End Date to the 31st of March 2021. This time, because our Advance's payment date fell between the Start and End Date of our Period, it will be reflected in our artist's balance. The Closing Balance of this artist's 2020H2 statement is 1,662.24.