Period End Closing

The Period End Closing module allows you to close the fiscal year, ensuring that your financial records are accurate and up-to-date. At the end of the fiscal year, it is important to close the books. This process ensures accurate financial reporting, prepares the system for the new year, and allows for a smooth transition.

This process is critical for several reasons, including:

• Resetting P&L Accounts: The closing process resets your Profit and Loss (P&L) accounts to zero. This is crucial for accurate tracking of your business's financial performance in the new fiscal year.

• Transferring Net Income to Retained Earnings: Once the P&L accounts are reset, the net income is moved from the P&L accounts to the Retained Earnings account. This process reflects the accumulated earnings of the business over time.

• Ensuring Accurate Financial Reporting: Without closing the books, your financial statements will reflect cumulative earnings from previous years, making it difficult to understand current performance.

Closing Fiscal Year

Period End Closing involves selecting the essential details, such as the fiscal year, retained earning account, reference number, and posting memo. Once the details are entered, you can proceed to calculate the closing transactions and close the period.

To close the fiscal year, go to Menu > Admin > Accounting > Fiscal Year End

Selecting Accounting Period Criteria

To begin closing the fiscal year, select the accounting period you want to close from the "Accounting Period Criteria" dropdown option.

Entering Period End Closing Batch Details

After selecting the accounting period, fill in the closing details.

Entering Period End Closing Batch Fields

• Retained Earning Account: Choose the Retained Earnings account where the net income will be transferred.

• Reference Number: This field allows you to enter a reference number for the closing transaction. This reference number is useful for tracking and audit purposes.

• Posting Memo: This field allows you to add a posting memo to describe the closing transaction. This memo helps in understanding the context of the entry when reviewing the financial records.

After entering the details, click on "Calculate Closing Transactions". This will calculate the closing entries to move the net income into the retained earnings accounts and display the entries. These entries will include the transactions in the income and expense accounts.

Closing Transactions Fields

Field	Description
Posting Date	The field displays the date on which the closing transaction is recorded in the system. This is typically the last day of the fiscal period being closed.
Ref Number	This is an editable field that allows you to enter a unique identifier assigned to each transaction. This helps in tracing and tracking individual transactions for auditing and reconciliation purposes.
Account	This field shows the account associated with the transaction.
Description	This is an editable field that provides a brief explanation of the transaction. By default, this field will display "Closing Entry".
Debit	This field represents the amount that is being debited to the account.
Credit	This field represents the amount that is being credited to the account.

Once you have verified the transactions, click "Close Period" located at the top right corner of the screen to close the fiscal year.

Please note if you do not do the fiscal year-end process at the end of the period, The net income will not be moved to the retained earnings account and the balance sheet will show consolidated income from previous years.