In a nutshell, the periodicity assumption, otherwise known as the time period assumption, basically means that as a bookkeeper, you could report a company's financials in smaller chunks of time, like annually, quarterly, or even monthly. Think of a company's financial life like a straw. On the one end, is where the company started, on the other, the point where the business would end. Now, because the company's business activity is fluid, money coming in, money going out, it would flow through the straw like water. Now, from an accounting standpoint, looking at the entire financial life cycle of a company, doesn't do us any good. We use the periodicity assumption to cut this straw into smaller pieces, so we can look at what's going on at that particular period of time. In order for your clients to run a successful business, they need to know what is happening with their money. To do that, they need timely information. They can't wait until December to learn they're in the position to buy a new piece of equipment, that they needed for a job back in March. Think of it like a puzzle. If you're just looking at the big picture, you aren't really seeing how all those little pieces are connected and working together. Let's hear from another of my star Bookkeeping Boot Camp graduates. Well, the biggest thing that we want to make sure that clients do, is have reports that they understand. Not only the categories that they're in, but also the periods that we're looking at. It really is important to understand what that looks like for that particular client. Is it month to month comparisons for the last 12 months, even if it's through the middle of their fiscal year to last year or whatever. Also, it could be quarterly. We have some clients that budget quarterly because that makes more sense for them. What we want to do is understand, how they're looking at things in their business and then run reports to match that. We often will talk about, how would you like to categorize things in your chart of accounts, and they don't have any idea. But I say, how would you look at these numbers based on a budget? And then they're like, " Oh, well, we want to be able to see it by this, and this, and this." I'm like, "Awesome, let's get your chart of accounts mapping that way." Then, the next question is, and what periods do you look at? Do you look at it by month? Would it help you to see it month-to-month or quarter-to-quarter? We always want to look at it year-over-year, things like that. We really try to understand how the business owner runs their business. How they look at their numbers. What are the important things that they're trying to get from it and then match the reports to it. One other example would be, for example, a business owner who needs to do quarterly tax payments. While they might not from an operation standpoint, look at it by quarter, maybe they'd look at that by month, but periodically we need to run it by quarter. They then can take that to their tax planner, who would then be able to see how they're doing in that quarter to be able to understand what they're going do as far as tax estimates are concerned. Those are the types of things that we do. But again, it's about understanding your client. What their needs are, and then having those reports matched to that, so that they can make better decisions or whatever it is they need to do.