What it means
A period is the span of time a set of books covers, usually a month. Locking a period means setting the accounting system so nobody can post, edit or delete entries dated inside it. It happens after the month has been reviewed and signed off.
The effect is that a reported number stays reported. The March P&L you sent the board in April is still the March P&L in October.
Most accounting systems have a lock date or closing date setting. Entries dated on or before it are refused, or need an administrator to override. A sound process records who locked each month and treats any unlock as an exception that leaves a trail.
Anything found after the lock moves forward in time. A late bill is booked in the open month with a memo pointing back. An error is fixed with a reversal and a correcting entry, both in the open month.
In April, Acme finds an $800 software bill for March that was never entered. March is locked, so the bill is booked with an April date and a memo saying it belongs to March. March's reported expenses stay as they were, and April's are $800 higher.
Now suppose the missing bill had been large enough to change how a reader sees March. The fix would still start in the open month, and the CPA would decide whether March's statements need a formal restatement. The lock means that change can only happen as a deliberate decision.
Locking is the last step of the monthly close and the reason reversals exist. The audit trail records each lock and each override, so anyone can see when a month was finished.
Why it matters. Without a lock, last quarter can change after you reported it and nobody can say why. Investors notice when old numbers move.
The entry, worked
In April, Acme finds an $800 software bill for March that was never entered. March is locked, so the bill is booked on an April date with a memo pointing to March.
| Account | Debit | Credit |
|---|---|---|
| Software expense | $800.00 | |
| Accounts payable | $800.00 | |
| Total | $800.00 | $800.00 |
March stays exactly as reported, and April carries the cost with a memo explaining where it came from.
Common questions
What happens to an invoice I find after the month is locked?
It's usually booked in the current open month, with a memo. If the amount is material to statements you've already issued, those statements may need a formal correction, and your CPA should make that call.
Does GAAP require period locks?
No. GAAP's rule is about errors: a material error in statements already issued is corrected by restating them, with disclosure, under ASC 250. A lock is an internal control that stops anyone from overwriting a reported month in the meantime.
Who should be allowed to unlock a closed month?
As few people as possible, ideally an admin who didn't prepare the entries. Every unlock should have a stated reason and a re-lock, and both should show in the audit trail.
Where it comes up
The glossary entries, founder guides and lessons on this site that use the term and link here.
- PeriodA fiscal reporting windowGlossary
- Why startups should close their books every monthA monthly close turns a bank balance into numbers an investor, an auditor or a 409A firm will accept. What it is, and why it gets expensive to skip.Guide · 4 min
- Can you vibe code your startup’s accounting?AI coding tools build a finance dashboard in an afternoon, but not a closed, reconciled, GAAP-basis ledger. Where the line is, and how to stay inside it.Guide · 3 min
- Cash, accrual and cut-offCash accounting records when money moves. Accrual records when value moves. Every hard question in the rest of the course lives in the gap between the two.Lesson 8
- Closing the monthStatements are not the end. The close proves every balance against something outside the ledger, then locks the period so the numbers can't quietly change.Lesson 13
Read further
General information for US companies, not tax, legal or accounting advice. Check the specifics with a CPA before you act on them.