Loading

Closing the Financial Year

Closing the financial year moves every profit and loss balance for the year into retained earnings with one journal, and closes any period of the year still open. The next year then opens with balance-sheet accounts only. The close is previewed first, held to the same checks as a month end, and can be undone if the accounts change.

Where to find it

Admin Panel → Finance:

  • Ledger & Finance — the Periods tab: Year-end close and Reopen year, in the Financial years table

Architect Panel → ERP - Finance:

  • Ledger & Finance — the same console for architects

Before you start

  • An account must carry the role Retained earnings (year-end close) on the chart. Without it the dashboard warns that the year cannot be closed. The UK template sets it.
  • The year must have ended. Until then the Financial years table shows Year-end close after and the date, and the months are closed one by one on the Close tab.
  • Close the year's months first where you can. The year-end close closes any still open, and holds each of them to its close checks and tasks.

Closing the year

  1. Choose the company and book at the top, open Periods, and find the year in the Financial years table.
  2. Press Year-end close….
  3. Check the Retained earnings account. It defaults to the account with the retained earnings role.
  4. Tick Lock the periods as well if the accounts are final.
  5. Read the preview: the profit or loss for the year, which account it moves to, the period it posts into, and the closing journal line by line with the retained earnings line and totals.
  6. If periods are not ready, the dialog lists them under Not ready to close. Put them right on the Close tab, or tick Close it anyway and give a reason; it is recorded against each period with what was closed over.
  7. Press Close the year. The table then shows the year as closed with a link to its closing journal (type YE).

Reopening a year

If an adjustment is needed after the year is closed, press Reopen year… on that year and give a reason. The closing journal is reversed and the year's last period is reopened, so the profit and loss balances come back. Later years must be reopened first. Post the adjustment, then close the year again: the new closing journal includes it.

Reading figures around the year end

  • On the Trial balance tab, tick Before the year-end close to see the profit and loss balances as they stood before the closing journal.
  • The dashboard's Profit year to date is before any year-end close, so it still shows the year's result afterwards.
  • The income statement and the ERP Analytics revenue and profit measures leave the closing journal out, so the month holding the close does not show the year reversed.

What goes wrong

  • "No account has the Retained earnings role": set the role on the Chart of accounts tab.
  • "The year has not ended, so it cannot be closed yet": wait for the last day of the year to pass.
  • Reopen refused: a later year is closed. Reopen that one first.

Worked example

A company with a 31 March year end closes March on 7 April. Its auditors finish in June. The controller opens Year-end close… for 2025/26; the preview shows a profit of 182,400.00 moving to 3100 Retained earnings in period 12, and every period passes its checks. They tick Lock the periods as well and close the year. In July a late audit adjustment arrives: they unlock period 12, reopen the year with the auditors' reference as the reason, post the adjustment and close the year again.

Recommendations

  • Close the year once the accounts are agreed, not on the first day of the new year.
  • Lock the periods when the accounts are signed, so a change needs a deliberate unlock.
  • Give every reopen a reason the auditors will recognise; it is kept in the period history.
  • Use Before the year-end close when you need the year's trial balance after closing.