Year-End Close

This guide covers the fiscal year-end close process — the final step in the annual accounting cycle that seals all periods, posts retained earnings, and prepares the ledger for the next fiscal year.

Overview

Year-end close is a one-time, irreversible operation per fiscal year. It:

1. Validates all regular periods are already SOFT_CLOSED
2. HARD_CLOSEs every period in the fiscal year (no further posting possible)
3. Calculates net Profit & Loss for the year
4. Posts a retained earnings journal (DR Current Year Earnings → CR Retained Earnings)

DANGER

Year-end close cannot be reversed. All periods become HARD_CLOSED permanently. Ensure all adjustments are complete before proceeding.

Prerequisites

Before running year-end close, verify:

• All 12 (or custom count) regular periods are SOFT_CLOSED
• Adjustment periods (if any) have all entries posted
• FX revaluation has been run for the final period
• Intercompany elimination is complete
• All recurring journals have been executed
• Audit adjustments are posted and approved
• Sub-ledger ↔ COA reconciliation passes for all control accounts

Running Year-End Close

1. Navigate to Accounting → Fiscal Periods → Fiscal Years tab
2. Locate the fiscal year to close
3. The system will show the current status summary (e.g. "Soft Closed: 12, Open: 0")
4. Use the row action or API to close the year

The close_fiscal_year procedure will:

• Validate all regular periods are closed
• HARD_CLOSE every period (including adjustment periods)
• Calculate net P&L from daily_coa_balance for all P&L accounts (account_sub_cat = 'PROFIT_AND_LOSS')
• Post a journal entry: DR CURRENT_YEAR_EARNINGS → CR RETAINED_EARNINGS
• Log the activity

System Tags Required

The retained earnings journal relies on two system tags being assigned to COA accounts:

Tag	Purpose
RETAINED_EARNINGS	The equity account that accumulates prior-year profits
CURRENT_YEAR_EARNINGS	The temporary equity account cleared at year-end

These must be configured in Administration → Financial Setup → System Tags and mapped to the appropriate COA accounts before year-end close can run.

Post-Close State

After year-end close:

• All periods show status HARD_CLOSED — no exceptions
• The retained earnings balance reflects cumulative profits/losses
• Current Year Earnings is zeroed out
• A new fiscal year (generated from the fiscal calendar) begins fresh with NOT_OPENED periods
• Opening balances for the new year are derived from the closing daily_coa_balance

Next Fiscal Year

After closing the current year:

1. Generate the next fiscal year from Fiscal Period Management → Generate Fiscal Year
2. Select the fiscal calendar and target year
3. Open the first period to begin the new cycle

Permissions

Permission	Description
CLOSE_FISCAL_YEAR	Execute the year-end close operation
GENERATE_FISCAL_YEAR	Generate a new fiscal year and its periods
VIEW_FISCAL_YEARS	View fiscal year status

Troubleshooting

"Not all regular periods are closed" — One or more periods are still OPEN. Close them individually first.

"Cannot resolve RETAINED_EARNINGS tag" — The RETAINED_EARNINGS system tag is not mapped to a COA account. Configure it in System Tags.

"Cannot resolve CURRENT_YEAR_EARNINGS tag" — Same as above for the CYE tag.

"SL-COA reconciliation failed" — Sub-ledger balances don't match the control account. Investigate and post correcting entries before retrying.