Year End Closing

To Close the Accounting Year select;

• File -> Year End Closing

The Year End Closing function is used to close the books for the current accounting year and reopen them for the new accounting year. (The ``accounting year'' can be either a calendar year or a fiscal year.)

The closing process will automatically complete the following steps:

1. Move the Current Year Opening Balances to the Prior Year Opening Balance for each balance sheet account.
2. Create new Opening Balances for the new year for all the balance sheet accounts.
3. Automatically calculate the current year's profit or loss and post it to the profit/loss account you select.
4. Move all Net Transactions for all accounts in the general ledger from the Current Year column to the Prior Year column.
5. Reset the Current Year Net Transaction column for each general ledger account to zero.
6. Save the current year's journals in an inactive status.
7. Create and open new, empty journals for the new year.

Before closing the year you must have at least one general ledger account of the ``Retained Earnings'' type available. This is the account into which the year's profit or loss will be automatically posted. You may have more than one account of this type. At closing you will be asked to specify the Retained Earnings (profit or loss) account to be used. A good idea is to have one account for each year's profit or loss. This allows you to see at a glance each year's profit or loss.

The closing process consists of three windows. You may terminate the closing process at any stage before selecting the ``FINAL REQUEST!'' button on the third window. Each window explains the process and the steps you are taking. On the second window you will be asked to select the account into which the profit or loss will be posted. You may either enter a valid account number or double click to select the account. As stated above, the account number must be of the ``Retained Earnings'' type.

The third window (see below) is the final Year End Closing window. When you make the final request to Close The Current Year, the year will be closed. After the year is closed you will no longer be able to access any of the current year's data or prepare reports using the General Ledger report menus. (All files are still accessible directly through PostgreSQL.) Therefore, you should print and/or save any reports for the current year before closing the year. You should also review these reports for accuracy and make any adjustments or changes to the books before closing.

You should make a complete backup of the database, as described in the previous section, as the last step before closing the year. The closing process can not be reversed once it is completed. However, if you have a backup of the database from just before closing you can restore the closed database by following the steps in the previous section.

Figure: Year End Final Closing Window