How to correct errors from previous years

What is it for?

When you discover an error from a previous period (for example, a December 2025 invoice that only turns up in 2026), the product records the correction with the date of the error, its nature and the lines to correct. The fiscal officer decides whether the error is material. After the decision, the product chooses the counterpart account and creates the correcting journal entry as a draft, in today's open period.

When to use it?

• When the error is from a previous period and can no longer be corrected in that period itself (which is closed or already filed).
• To keep a trail: who recorded it, who decided, when and why.
• Do not use it for errors in the current month: correct the original journal entry. The screen refuses them (see “Common problems”).

Where to find it?

Accounting › Close › Close the month, in Supporting lists, Corrections of previous years errors. The list is called Error corrections (NCRF 4); when empty, it says “No error corrections”.

Before you start

• The Accountant records the correction. The Fiscal officer (Certified Accountant / Tax manager) decides on materiality: the Accountant does not see the Decide materiality button on the form. After the decision, Generate entry is available to both (tested with both). The Fiscal officer can also do the last step, Post.
• Know the partner (customer or supplier) of each line on a partner account: without it the journal entry is not generated (see “Common problems”).
• The lines use the balance sheet account that was wrong, such as 2211 General suppliers: expense and income accounts (6 and 7) do not appear in the search. The other side of the journal entry is automatic (the Counterpart account).
• The example is the electricity invoice of 15/12/2025 (€500.00) from Energia Norte, SA, never recorded, discovered in 2026.

How to use it

1. Open Accounting › Close › Close the month and, in Supporting lists, Corrections of previous years errors. Click New.
2. Fill in: Short description (Fatura de eletricidade de dezembro de 2025 por registar), Date of the period of the error (15/12/2025: any date in the period in which the error was made), Nature of the error (Wrong amount, Wrong account, Wrong period (cut-off), Omission or Other; in the example, Omission) and, in What went wrong, what was wrong and how it was discovered. Original entry only if there is a journal entry with the error. The Date of the correcting entry (today) must be in an open period and the Journal is already filled in (Adjustment entries).
3. In the Corrections tab, Add a line: Account 2211 General suppliers, Partner Energia Norte, SA, Description and Credit €500.00. The Counterpart shows what is needed to balance (€500.00). Save. The correction is in To decide.
4. With the Fiscal officer profile, open the correction and click Decide materiality. The window shows the Suggested threshold, if the company has set one (see “Important notes”). In The error is? choose Material or Not material and write the Reason for the decision, at least one short sentence. In the example, Not material.
5. Click Record decision. The state changes to Decided, and the form shows Materiality, Decided by, Decided on and the Counterpart account: 6881 Corrections relating to prior periods.
6. Click Generate entry. The state changes to Entry generated and the form shows the Correcting entry, as a draft.
7. Open the journal entry and check the lines: credit of €500.00 on 2211 General suppliers (partner Energia Norte, SA) and debit of €500.00 on 6881 Corrections relating to prior periods, in the Adjustment entries journal, dated today. Click Post when you agree (in the example, AJU/2026/00001).

If the error is material

The path is the same; the counterpart account changes. In step 4, choose Material. The generated journal entry credits the same account and debits 561 Retained earnings, outside the period's results. In the example of a €50,000.00 error (AJU/2026/00002): debit of €50,000.00 on 561 Retained earnings and credit of €50,000.00 on 2211 General suppliers.

Expected result

• A correction in Entry generated, with the decision and the balanced correcting journal entry, as a draft. Nothing is posted until you post it.
• Not material, after posting: in the ledger, 6881 shows €500.00 debit. The expense goes into the current period's result, not 2025's: in the income statement, Other expenses goes from -€2,500.00 to -€3,000.00 and the Net result of the period from -€59,331.84 to -€59,831.84. Review the result simulation, if you had already done one.
• Material, after posting: the period's result does not change. 561 shows the €50,000.00 debit and, in the balance sheet, Retained earnings goes down by that amount.
• The debt to Energia Norte, SA stays on 2211, and the balance sheet's Suppliers line goes up.

Important notes

• Material or not. According to the on-screen text, a material error is corrected through retained earnings (account 56), with restatement of the comparatives; a non-material error is corrected in the period's results (accounts 6881/7881). Only the certified accountant decides, never the system. The product only generates the journal entry: it does not restate the comparatives. Pending validation by a certified accountant: materiality criterion and restatement of the comparatives.
• Suggested threshold. In the company settings, in the Portuguese localisation tab, the administrator can set the Materiality threshold (%) and the base (by default, turnover). Zero turns it off. It is only an indication: “Error of 500.0 is ABOVE the suggested threshold of 383.93 (1.0% of 38393.0). The decision is yours.” The screen compares with the year of the error. Do not rely on it for years already closed: for 2025, the demonstration says “The base of the threshold is zero in the year of the error: there is nothing to compare with. The decision is yours.”, even though the income statement shows sales of €279,000.00. Do the comparison by hand.
• The decision is final. A Decided correction can no longer be changed or deleted (“A correction with a decision cannot be deleted: the decision of the certified accountant stays on record.”). In To decide it can still be edited and deleted.
• Do not use account 56 on the lines. The search lets you choose 561, and Record decision accepts it, but Generate entry then refuses it. Since the correction already has a decision, it is left without a journal entry and cannot be corrected or deleted. Record another correction, with the right account.
• The product does not correct the original journal entry. It creates a new journal entry, today. VAT, withholding tax and the returns of the period of the error are not corrected here: tell the certified accountant so they can check whether a replacement return is needed.
• Lock dates. The date of the correcting entry must be in an open period: see lock dates.

Common problems

“Fill in the customer or supplier on the lines in a third-party account (2211) before going on: without it the correcting entry cannot be generated. Add the partner to the line and decide again.”

• Cause: a line on 2211 has no Partner (Invalid Operation message, when you click Record decision). The decision is not recorded and the correction stays in To decide.
• What to do: click Close and Cancel, fill in the Partner on the line, save and decide again.

“The error is dated 02/11/2026, which is not before the period of the correcting entry (03/11/2026). The NCRF 4 treats errors of PRIOR periods: for an error of the current month, correct the entry itself.”

• Cause: the Date of the period of the error is in the month of the Date of the correcting entry.
• What to do: correct the journal entry itself. If the error really is from another period, correct the date.

“Write the reason for the decision (at least a short sentence): the NCRF 4 leaves the judgement of materiality to the entity and the reason is what justifies it in an audit.”

• Cause: the Reason for the decision is too short (for example, “Teste.”).
• What to do: write a sentence with the reason for the decision.

“The account “561 Retained earnings” cannot be used on the lines: the counterpart (account 56 if material, 6881/7881 if not) is added by the system. For a material error the correction stays outside the results of the period (NCRF 4, para. 37). Use the balance sheet account that was wrong.”

• Cause: you clicked Generate entry on a correction with a line on account 56 (Invalid Operation message).
• What to do: this correction can no longer be changed. Record another one, with the balance sheet account that was wrong, and explain in the new one's What went wrong that the first was left without a journal entry.

“Some required fields are empty. Fill in the fields marked in red to be able to save.”

• Cause: you clicked Record decision without choosing Material or Not material or writing the Reason for the decision.
• What to do: choose one of the options and write the reason.

I do not see “Decide materiality”

• Cause: your profile is Accountant.
• What to do: ask the Fiscal officer to decide.