Lock the month once reconciled: 4 rules
In the bank reconciliation lesson, each reconciliation started from the balance approved the month before. If an approved month's books later change, someone usually edited an entry or backdated one. A period lock prevents that: once reconciliations are approved, nothing dated in that month can be added, edited or deleted. Later mistakes are fixed in the current period, never in the locked month: an entry dated today citing the original, or a credit or debit note for an issued invoice. Here are 4 rules.
Example: a caterer and a locked month
A small caterer supplies daily lunches to a contractor's site at an agreed SAR 19 a meal and files VAT quarterly. The owner approved and locked June on 6 July; the second-quarter return followed on 28 July. On 4 August the customer flagged June invoice 1048, for 600 meals at SAR 22, and the meat supplier sent a late June bill.
Rule 1: lock on approval day, by one person
Lock each month the day its last reconciliation is approved; any delay invites backdated entries. One named person locks it, usually the owner or finance manager, and the system logs who and when. Entries dated inside a locked month are refused, even from full-permission users.
The lock is an internal control you choose, not a tax rule. Issued e-invoices differ: Annex 1 of the e-invoicing implementation controls from the Zakat, Tax and Customs Authority (ZATCA) bars e-invoicing software from letting issued e-invoices or notes be altered or deleted, a ban enforced since 4 December 2021.
Rule 2: fix it now, never rewrite the old month
Ordinary entries get a correcting entry dated today citing the original's number, date and reason. Issued invoices get a credit or debit note under Article 54 of the VAT Implementing Regulations: credit when tax charged was too high, debit when too low, each clearly referencing its invoice. See credit and debit notes.
| Mistake | Don't | Do |
|---|---|---|
| Overcharged invoice | Edit, or delete and reissue | Credit note for the difference |
| Undercharged invoice | Edit the price | Debit note for the difference |
| Late supplier bill for a locked month | Backdate it | Record it today, noting its month |
Rule 3: reopen rarely, on 5 conditions
Reopening is sometimes cleaner, say when missing documents surface before filing. Then require:
- One authorised person: whoever locked it, or their superior.
- A written reason first, naming document and amount.
- A time limit, say 24 hours, then automatic relock.
- A log of who reopened, when, and every changed entry.
- Re-approval of affected reconciliations before relocking.
Monthly reopening signals a mistimed lock, not a faulty rule.
Rule 4: check the tax effect on a filed return
Locking cannot correct a return. Article 63 of the VAT Implementing Regulations (official Arabic text) turns on which way the error ran:
- Too much declared: deduct the excess in any later return, within 5 years of the end of that period's calendar year.
- Too little, by SAR 15,000 or more: notify ZATCA within 20 days of becoming aware, by correcting your earlier return.
- Too little, by less: you may add it to your return for the discovery period.
Here tax was overstated, so no 20-day notice applies: the credit note cuts output tax by SAR 270 in the third-quarter return it was issued in. Check large cases with your tax adviser.
Running it from WhatsApp
Accountant: Change invoice 1048 to SAR 19 a meal
System: June is locked, and issued invoices cannot be edited even after reopening. Credit note dated today against invoice 1048: SAR 3 × 600 meals, SAR 1,800 plus SAR 270 VAT. Issue it?
Accountant: Yes, send it
System: Credit note 213 sent; customer balance down SAR 2,070.
Owner: And the meat supplier's bill? Reopen June and post it there
System: Reopening touches June's approved figures, July's opening balance and your second-quarter return filed on 28 July. Reason, and how many hours? Or I can record it today, noting it covers June.
Owner: Record it today
June stayed as approved, so every July reconciliation opens where June's ended. See invoicing over WhatsApp.
Checklist for a locked month
- Was the month locked on approval day, by one named person?
- Is every correction dated when made, citing its original and reason?
- Were issued invoices corrected by note, never edited or deleted?
- Did each reopening have a reason, time limit, log, re-approval and relock?
- Is any filed-return shortfall checked against SAR 15,000 and 20 days?