At the end of your financial year, you must close your accounting period to prepare for the next one. Most companies rely on their accountants to take this step for them.
Make sure the Accountant-Level access is enabled by pressing Your Profile > Preferences > Show Accountancy Information > On
Set the financial year from the Journal Entries page or the Chart of Accounts page:
- Press the three dots to the right on the screen
- Select 'Financial Years'
- Set the dates for the end of the current financial year
- Select whether it's the first year of trading
- Press 'Done' to save
Before committing to a year-end closing, make sure your accounting books are ready:
- Reconcile each month in your financial year before closing.
- Close the latest VAT period of your financial year from your VAT return page.
- We recommend you select 'Include Historic' to include Unclosed Entries upon closing the VAT period:
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Close the financial year from the Chart of Accounts page
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Click the three dots to the right of the screen:
- Select 'Financial Years'
- Click the 'Close Financial Year' Button
- Follow the onscreen instructions to close the end-of-year accounts:
Notes:
The year-end closing will set your 'Current accounting window' start date to the first date in the new financial year.
The closing procedure will balance all income statement accounts to 0.00 and post the difference between income and expenses to the retained earnings in your balance sheet.
The income statement on your first day of the new financial year will then be empty and your balance sheet will show the opening balance for the new year.
Closing a Financial Year is a permanent action and cannot be undone. Make sure to check everything is properly reconciled before closing the year.