# Prepare entity accounting and close periods

Canonical HTML: [https://collty.com/help/commercial/prepare-entity-accounting-and-close-periods](https://collty.com/help/commercial/prepare-entity-accounting-and-close-periods)
Audience: Company and client finance roles, accountants and auditors
Reading time: 16 min
Updated: 2026-08-26T00:00:00.000Z

Move authorized source evidence into balanced journals, review statements and readiness, and close a legal-entity period without confusing operational analytics with statutory books.

## Keep operational finance and entity accounting separate

Finance Analytics explains project delivery, invoices, payments, costs and forecast from the current cabinet's operational perspective. Accounting is a separate legal-entity boundary built from balanced journals, a chart of accounts, reporting periods and explicit accounting access.

An operational invoice or payment does not become an accounting amount merely because it is visible in a project. The source must be mapped and posted to the correct entity, period, accounts, currency and accounting treatment. Source-to-journal trace preserves that path.

| Surface | Primary question | Authority |
| --- | --- | --- |
| Finance Analytics | What is happening across projects, teams, clients and payments? | Authorized operational evidence |
| Accounting | What is posted in one legal entity and reporting period? | Balanced journals and period controls |
| Plan P&L | What might happen under editable assumptions? | A separate planning layer; never an override of actuals |

## Use the cabinet and accounting role that owns the books

- Owner, controller and accountant roles can prepare entries only where the server grants that capability.
- Analyst and auditor roles read statements and trace without receiving posting or close controls.
- Project participation does not automatically grant access to a legal entity's books.
- The browser hides out-of-scope views, but server authorization remains the decisive control.

| Cabinet | Accounting boundary | Excluded data |
| --- | --- | --- |
| Team Studio | Partner-company entities explicitly available to the signed-in finance role | Unrelated client books and specialists' personal books |
| Project Workspace | Entities owned by the project-operating company or explicitly granted accounting access | Another legal entity's payroll, private margin and unrelated suppliers' books |
| Pro Workspace | Only an entity explicitly shared with the specialist identity | Company-wide payroll; personal earnings and payouts remain in Pro Workspace finance |

## Connect or import source evidence without inventing a connector

Sources & import shows only connection states returned by the accounting API. A source is not described as connected merely because Collty supports that source type.

Native Collty reconciliation requires an explicit ready billing identity and an explicit accounting perspective for the selected legal entity: payee for sales and receivables, or payer for purchases and payables. This boundary prevents personal, client and partner-company records from being mixed into the wrong books.

Reconciliation retries are idempotent: source records that already produced an accounting document or cleared payment are reused rather than duplicated, while partial failures remain visible for a controlled retry. External APIs and inbound webhooks can also be configured as controlled sources. CSV, XLSX, bank statements, trial balances and opening balances use an upload, validation, preview and posting sequence.

1. **Choose the entity and period:** Imports cannot choose a legal boundary implicitly.
2. **Upload the source file:** Select the real source type so validation applies the correct structure.
3. **Validate before posting:** Review accepted and rejected rows, dates, account mappings, duplicate warnings and debit-credit equality.
4. **Correct an unbalanced batch:** Do not post a plug or change a statement total to hide the difference.
5. **Post the reviewed batch:** The resulting journals become the source of actual statements and retain batch trace.

> **Good to know:** Opening balances are a balanced, validated batch. They are not free-form beginning totals typed directly into the balance sheet.

## Post transactions; do not type actual statement totals

Actual P&L, balance sheet, cash flow and trial balance are generated from posted journal lines. They remain read-only in the statement view.

Simple manual transaction creates equal debit and credit lines with a date, explanation, currency and two different posting accounts. More complex adjustments belong in a full journal workflow. Plan P&L remains editable because it contains assumptions, not posted actuals.

> **Good to know:** Changing an assumption can change a plan. Changing an actual requires a supported journal, reversal or correction with trace.

## Close a period through explicit controls

1. **Confirm source completeness:** Review native, imported, bank, payroll and manual-journal sources and resolve degraded connections.
2. **Review the trial balance:** Debit and credit totals must balance; empty or unbalanced status is not close-ready.
3. **Complete accounting reviews:** Resolve FX, revenue-recognition and consolidation readiness issues that apply to the entity.
4. **Review source-to-journal trace:** Investigate unexplained journals, rejected imports and unmapped source records.
5. **Close and lock with the authorized role:** Close records completion of the period workflow; lock prevents ordinary changes. Reopening or correcting a locked period follows server policy.

> **Good to know:** A green interface state does not replace management review, accounting judgement, local filing requirements or an audit.

## Treat foreign exchange as accounting evidence

Each entity has a functional currency and may have a different presentation currency. Transactions retain their transaction currency, source amount, applicable rate, rate date and resulting functional-currency amount.

Period review distinguishes transaction conversion, remeasurement of monetary balances and translation for presentation or consolidation. When currencies are not exchangeable, the responsible accountant must document the rate estimate and disclosures required by the entity's accounting policy.

> **Good to know:** A currency selector must not silently convert posted books with an unversioned display rate.

## Use a controlled revenue-recognition workflow

For customer contracts, record the contract, promised goods or services, performance obligations, transaction price, allocation method and satisfaction evidence. Recognition can occur at a point in time or over time according to the entity's reviewed accounting policy.

Variable consideration, contract modifications, principal-versus-agent conclusions and progress measures require versioned judgement and supporting evidence. An issued invoice is not automatically the same event as revenue recognition.

> **Good to know:** Collty can support an IFRS 15-aligned workflow. That wording does not mean the software, one contract or the entity's complete financial statements are certified as IFRS compliant.

## Consolidate only explicit group entities

Consolidation begins with a defined group, reporting period, ownership scope and presentation currency. Entity trial balances are mapped to the group chart before eliminations and translation adjustments are posted.

Intercompany balances and transactions require counterparties, matching evidence, elimination journals and review of differences. A project shared by two companies is not, by itself, proof of a consolidation relationship.

- Pin every run to entity and FX-rate versions.
- Keep elimination journals distinct from source-entity books.
- Expose unresolved intercompany differences instead of forcing the group to balance.
- Retain the run, mappings, adjustments and approver for repeatable reporting.

## Connect team compensation to the correct company books

Team Canvas stores the settlement responsibility for each member: employee payroll, company-paid contractor, client-paid contractor, owner without settlement or no financial settlement. Paid records also carry currency, cadence, rate basis, amount, employer tax and benefits, and effective dates.

An owner or controller can synchronize company-paid team terms into the selected accounting entity. The reconciliation deduplicates one person across projects, refuses conflicting team terms and does not turn client-paid specialists into company payroll or payables.

Team Studio and Project Workspace can show private payroll for an accounting entity owned by or shared with the signed-in company finance role. Posted payroll runs retain gross pay, employer cost, net payable, status, source and allocations across teams, processes and projects.

Pro Workspace never receives company-wide payroll. A specialist sees only their own authorized earnings, invoices and payout state.

> **Good to know:** Configured salary and contractor terms create forecast commitments, not actual P&L. Actual expense and cash require a posted payroll run, supplier document or other authorized accounting evidence.

## Describe standards support precisely

Collty describes product capabilities as standards-aligned or as support for a controlled accounting workflow. It does not state that the software is IFRS certified, and it does not let a feature-level checklist create an unreserved IFRS compliance statement for an entity.

Only complete financial statements that meet every applicable requirement can make the relevant compliance statement. The reporting entity, its management and professional advisers remain responsible for accounting policies, judgements, disclosures, local law and filing.

- Product help summarizes workflows in original language and does not reproduce licensed IFRS standard text.
- Embedding IFRS publications, taxonomy material or other licensed content in a product requires the applicable permission from the IFRS Foundation.
- Standard names and readiness labels identify scope; they are not audit opinions, legal advice or tax certification.
- The configured reporting basis, standard version, jurisdiction and effective date must remain visible and reviewable.

### Official references

- [IFRS Foundation: Accounting Standards Navigator and licensing](https://www.ifrs.org/issued-standards/list-of-standards/) - Official access and licensing information for IFRS Accounting Standards.
- [IFRS Foundation: IFRS 15 Revenue from Contracts with Customers](https://www.ifrs.org/issued-standards/list-of-standards/ifrs-15-revenue-from-contracts-with-customers/) - Official overview of the revenue-recognition model.
- [IFRS Foundation: IAS 7 Statement of Cash Flows](https://www.ifrs.org/issued-standards/list-of-standards/ias-7-statement-of-cash-flows/) - Official overview of cash-flow presentation and classification.
- [IFRS Foundation: IAS 21 The Effects of Changes in Foreign Exchange Rates](https://www.ifrs.org/issued-standards/list-of-standards/ias-21-the-effects-of-changes-in-foreign-exchange-rates/) - Official overview of functional currency, foreign-currency transactions and translation.

## Related guides

- [Read Connected Finance Analytics](https://collty.com/help/commercial/read-connected-finance-analytics)
- [Set Up Bank Details And Manage Invoices](https://collty.com/help/commercial/set-up-bank-details-and-manage-invoices)
- [Time Costs Invoices And Expenses](https://collty.com/help/commercial/time-costs-invoices-and-expenses)
- [Manage Project Expenses](https://collty.com/help/commercial/manage-project-expenses)
- [Private Workspaces And Access](https://collty.com/help/security/private-workspaces-and-access)