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.

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

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