How do I close the year in Business Central?

Audience: End-users

Purpose: Describe the process to post the year end retained earnings close.

At the end of the fiscal year, the previous year's net income will need posted to the retained earnings account. These steps will take you through the process to create and post this entry. This article assumes that you use the calendar year as your fiscal year.

1. Create the new year.
   • Click the Lookup button [].
   • Search for Accounting Periods.
   • Determine the last created period, such as December 2023.
   • Click Process -> Create Year.
   • Enter the following fields:
     • Starting Date:  This should be the first period of the new fiscal year.
     • No of Periods: Enter the correct number of periods to create for the year (usually 12).
     • Period Length: enter 1M for periods that mirror the calendar months.
   • Click OK. Verify that the New Fiscal Year  box is checked for the start of the near year (January - assuming fiscal year is calendar year).
   • 
   • Repeat this process one year at a time if multiple years need to be created to catch up.  Verify that the New Fiscal Year box is appropriately checked.
   • The prior year does not need to be closed at this time, but must be closed prior to creating the year end journal entry.

1. 1.  
2. Close the prior year.
   • Click the Lookup button [].
   • Search for Accounting Periods.
   • Click Process -> Close Year.
   • You will be asked to confirm the year to be closed.  Click OK.  Closing the year does not prevent posting to the prior year, however, you will no longer be able to adjust the periods.
   • Repeat the closing for additional years, however, do not close the new year.
3. Create the year end journal entries.
   • On the home screen, click Finance then Chart of Accounts.
   • Click Process, followed by Close Income Statement.
   • Select the Fiscal Year Ending Date.
   • Select GENERAL for the Gen Journal Template.
   • The Gen Journal Batch should be YE CLOSE.  Create the batch if needed.
   • Enter your Retained Earnings Account to make closing entries.  (In the Cronus sample chart of accounts, this is 30110).
   • Select Dimensions to close.  In general, select all Dimensions to close.
   • 
   • Click OK.
   • You will receive a prompt that the year end journal entry has been created.  Click OK.
   • Navigate to Finance -> General Journals.
   • Open the YE CLOSE batch.
   • Review the year end journal entry, if needed.
     • Validate that there are not any Balance Sheet accounts included in the entry. This would indicate the Income/Balance type is set incorrectly to Income Statement on the GL Account Card.
     • Validate that there are not any Income Statement accounts missing in the entry. This would indicate the Income/Balance type is set incorrectly to Balance Sheet on the GL Account Card.
   • When ready, click Process then Post.
   • Repeat this process for additional years if needed to catch up.