Close the Year

Here's what happens when you close the year:
  • The net profit/loss total is entered for the retained earnings account for each set of books.
  • Retained earnings are added to the prior year fund balance account.
  • The beginning balance of the retained earnings account is set to zero.
  • The Current column advances to the new fiscal year. A new Future column is created for the next year in the Actuals and Budgets sections of the COA.
  • In the Actuals and Budgets sections, the fifth oldest year of information is deleted.
  • In income and expense accounts, the new actuals are set to zero.
  • In asset and liability accounts, the total of the first month of the new fiscal year is set to the ending balance from the prior year.
  • In the Initial Setup window, the fiscal year is advanced.
Note: You don't need to close the last month. It's automatically closed when you close the year.

There are a few things you need to do to close the fiscal year.

Back up your data

  1. On the File menu, click Backup / Restore / Archive > Backup Data.
  2. Enter a reason for the backup, such as "Backup before closing the year".
  3. Select a backup method, and enter or select any relevant information.
  4. Click Start Backup.
  5. After your data is backed up, you can print the backup information for your reference.

Establish next year's budgets

Before you close the year, you can establish new budgets based on your existing budget or actual totals. If you're not ready to do this now, you can enter them later.

Close the fiscal year

You can close the period after all transactions have been entered or corrected, all of your reports for this period are correct, and you're ready to lock the period.

CAUTION: Print financial reports and make modifications or adjusting journal entries before you close a period. After that, transactions from the closed year can only be modified by voiding it, which creates a reversing entry in the current fiscal year.
  1. On the Transactions tab, click End of Period.
  2. Click Close Fiscal Year for Ledger.
  3. If you haven't backed up your data, click Yes to make a backup.
  4. It's a good idea to run the Fix Data Discrepancies process at this time. Click Yes, then click Fix Data.
    • If any issues are found, print them for your reference. Close Close, then click Yes to address the issues.
    • Otherwise, click Close, then click No to continue.
  5. Click Yes to close the fiscal year.
  6. Click OK.

Once you close the year, you can enter transactions for the new fiscal year.