When you are ready, there are a few simple steps to close the fiscal year in Business Central. A quick review of your chart of accounts, in the event that new accounts were added throughout the year, is a key first step. Ensure that Balance Sheet and Income Statement accounts are labeled correctly on the Account Cards.
The year end close process will close out Income Statement accounts and roll forward balances in Balance Sheet accounts.
1. Using the Tell Me, search for “Accounting Periods”
In this example, we are going to open new year 2022 and close year 2021
2. Create a new Year (if needed)
Go to Process >> Create Year
3. Close the previous Year
Go to Process >> Close Year
Review the notification
Click Yes if this is the correct Year you want to close
4. Next, Close the Income statement
This process will create a General Journal that will transfer all the Income Statement account balances to the Retained Earnings account
Using the Tell me, search for “Close Income Statement”
Select Close income statement
Fill out the information needed as described below
Fiscal Year Ending Date: The ending date of the Year you are closing
Gen. Journal Template: select GENERAL
GEN. Journal Batch: You can create a New Batch Called CLOSE and select it here
Document No: will be generated by system but you can override if you want
Retained Earnings Acc: Confirm this is your retained earnings account
Post to Retained Earnings: Select Balance – Do not select details as it will create a closing entry for every transaction that happened, and it will be difficult to review
CLOSE BY: Dimensions: if you are using Dimensions, Click on the 3 dots to select the Dimensions to close
Journal lines will be created in the batch you specified “CLOSE”
Go to General Journals >> Select the Batch, “CLOSE”
Notice that all closing entries dates start with “C” to identify them differently from the rest of the transactions in the GL
Review the Closing Journal and if the results are what you are expecting, post the Journal.
***If the results are not what you were expecting, and you think you missed any transaction entry or you want to make any adjustments before you close, you can delete the closing Journal, do the changes, and then run it again.
Note: If after you Close the Income Statement, you need to post additional transactions, you must run Close the Income Statement process again.
If you have any questions regarding the steps to close the fiscal year in Business Central please reach out to us.