What closing does
When you close a fiscal year the system:
- works out, for every balance-sheet ledger, its balance at the end date of the year you close (all entries up to that date), and the year's profit or loss, with and without the value of the closing stock;
- keeps those figures as the carried balances of the next year, so the next year's trial balance, balance sheet, profit and loss and opening trial start from them (Check the books with trial balance and ledger reports);
- makes the next fiscal year the active one and the closed year inactive, from that moment;
- creates numbering series for the new year if the new year has none yet (Document numbering for sales).
It does not post any voucher, change any past entry or stop anyone from editing the old year. The old year's vouchers stay editable until you lock the closing (Lock a closed year). Customer and supplier statements are not changed: the party ledgers simply continue.
Close the year
Open Company setting (menu Company Settings) and choose the Financial year closing tab. You need the right to close a financial year. The page is a six-step wizard. The first five steps are reminders; the last one does the closing.
- Read Basic information
- Read Bank reconciliation
- Read Inventory adjustment and valuation
- Read Financial statements
- Take a Backup
- Close the year
The list below the form shows each closing: Closed financial year, Opened against Closed, Closed start date, Closed end date, Profit, Loss, Profit without stock value and Loss without stock value.
| Area | Change |
|---|---|
| Ledgers and vouchers | Nothing is posted, edited or deleted |
| Reports for the new year | They start from the carried balances and the carried profit or loss |
| Active fiscal year | The new year becomes active, the closed year inactive |
| Numbering | Series for the new year are created if there are none (Document numbering for sales) |
| The old year | Still editable until the closing is locked (Lock a closed year) |
Change, repeat or delete a closing
| You want to | Do this |
|---|---|
| Bring late entries of the old year into the carried balances | Edit the closing, keep the years, and save again with Close typed. The figures are worked out again. The lock is cleared by this (Lock a closed year) |
| Undo a wrong closing | Delete the closing (type Delete). Read the warning below first |
| Stop edits to the old year | Lock the closing (Lock a closed year) |
The delete box says a closing can be deleted only within 5 days of the closing and only while the new year has no data. Do not rely on those limits and do not delete a closing without asking your support contact first. A deleted closing removes the carried balances, so the new year's reports then include the whole history again.
What to check afterwards
- Open the Opening Trial for the first day of the new year: the Difference in Opening Trial must be zero.
- Open the trial balance as at the new year's first day and compare it with the old year's closing balances.
- Check that the Active year on the fiscal year list is the new one (The fiscal year).
- Make an entry in each area you use to confirm numbering works (Document numbering for sales).
Common questions
Nobody can sell after I closed the year.
You closed before the new year started, so the new year is already active but its first day has not come. Wait for the first day, or make the previous year active again on the Fiscal year screen (The fiscal year) and close on the first day.
The new year's numbers start with the old prefix.
Closing copies the old year's series with the same prefix and the suffix - and the new year's code. Check the suffix; edit the series if you want a different one (Document numbering for sales).
I entered a bill dated in the old year after closing and the balance sheet did not change.
The carried balances were worked out at closing. Edit the closing and save it again with Close typed; the figures are worked out again.
The profit shown is not what I expected.
The closing shows the profit with and without stock value. Check the stock valuation and the closing stock ledger.
Can I close the same year twice?
A year already closed is not offered. Delete the closing to close it again.