Once all revenue and expense items are recorded and all entries are adjusted, you can close the fiscal year.
When you close a fiscal year:
all revenue and expense transactions cease from posting to that year.
all open periods in that fiscal year are closed, and cannot be reopened until the fiscal year is reopened.
closing entries are generated (revenue and expense items are cleared, and their respective totals are summarized to the designated Retained Earnings account).
I want to read the GL Year-end Process white paper (with screen shots) to find out why I can't close my fiscal year, and how to fix things so I can.
Similar to when closing periods, fiscal years must be closed in chronological order: only the first open fiscal year (i.e., earliest) can be closed, and fiscal years cannot be closed until the fiscal year end date has passed.
You don’t have to close a fiscal year before a new one is started. You can start a new fiscal year while keeping the previous year open until it’s ready to close.
Note
If the Close Year button is not available it means that there are inventory transactions in the old fiscal year still waiting for an actual cost. Please read the Year-End Process white paper for assistance with filling waiting cost rows.
You CANNOT close a fiscal year if:
there are any inventory receipts that are not billed on purchase invoices in that year
there are any inventory receipts that are not billed on purchase invoices in the next fiscal year but are referencing (cost history table) the fiscal year you want to close
(this type of unbilled inventory receipt is marked with an asterisk *)
any inventory is waiting for an actual cost
(e.g. was sold into the negatives at year-end)
Caution
If you have turned on the company config option toPrevent Inventory Cost Cascade in Closed Periods please proceed carefully.
This setting will allow you to close a fiscal year with estimated cost rows even though that might not be your intention.
You might NOT WANT to close a fiscal year if:
there are any loadout tickets that are not billed on invoices in that year
agrē will allow you to close a fiscal year with unbilled loadout tickets, but your accountant will most likely prefer that you don't as unbilled inventory affects year-end accrual account balances.
To close a fiscal year
Navigate to General Ledger > Close a Fiscal Year.
The Close a Fiscal Year window opens.
In the Fiscal Year list, select the fiscal year to close and then click Prepare Year End.
The Close Fiscal Year window opens.
If this fiscal year is ready to be closed, the Close Year button is in full colour, the tabs are blank and a message at the top of the window indicates that you can successfully close this fiscal year.
Billing the loadout tickets on the Unbilled tab is optional, but recommended.
If this fiscal year cannot be closed yet, the window displays detailed information regarding the changes required to close the year. Once the changes are made, you can close the fiscal year.
If you have any remaining cost history (e.g., items sold into the negatives), the window displays detailed information regarding the estimated cost rows. If you want agrē to automatically adjust your inventory to allow the closing of the year, select the row that has cost history to use up and then click Use Cost History.
Click Close Year.
The Close Fiscal Year? window opens and prompts you to confirm the closure.
Click Yes.
agrē automatically closes the fiscal year, and closes any periods that were still open in that fiscal year.