Welcome to Lesson 8.3! In FastFund Raising, “Closing the Books” is a critical internal control procedure designed to protect the accuracy and integrity of your financial data. Whether you are preparing for an annual audit or simply finalizing a month-end reconciliation, locking your transaction history prevents accidental or unauthorized modifications.
In this lesson, we will explore the difference between a soft close and a permanent close, and the specific system rules that govern accounting periods in FastFund.
Important Note: If your FastFund Raising module is fully integrated with FastFund Accounting, the Books Closed process is entirely managed through the Accounting module. If you are using the stand-alone version of FastFund Raising, you will manage these controls directly within the fundraising system.
1. The Two Types of Books Closing
FastFund utilizes two distinct levels of closing procedures to give your organization flexibility during the reconciliation and audit process:
- Soft Close: A soft close acts as an internal control that prevents standard users from entering, editing, or deleting transactions in a soft-closed period. However, users with Company Administrator permissions can still bypass this lock to post or modify transactions. A soft close is highly useful when accounts have been reconciled but the financial statements are not yet finalized. It is also recommended when your annual audit begins; you can soft close the fiscal year so standard users cannot make changes, but the system administrator can still enter the auditor’s year-end adjusting entries.
- Permanent Close: A permanent close completely locks the system. Once the books are permanently closed, absolutely no transactions can be entered, edited, or deleted prior to the books closed date. Araize recommends using a permanent close only after your annual audit is completely finished and all year-end adjusting entries have been finalized.
2. System Rules and Timeframes
FastFund is designed to accommodate the realities of nonprofit accounting, which means you do not have to halt your daily data entry just because a previous period is not finalized.
- No Monthly Requirement: FastFund Raising does not require you to close the books at the end of an accounting period just to start recording transactions for the next period. You can seamlessly record new donations in the current month while leaving the previous month open for reconciliations and adjustments.
- The 24-Month Rule: FastFund allows you to keep the books open for a maximum of twenty-four (24) months. As a strict internal control, the system will completely prevent you from recording any transactions that are dated more than 24 months past your permanent books closed date.