Overview
Year-end closing is more formal than month-end closing. It usually involves final management review, accountant review, retained earnings, tax records, backup, and restrictions on editing prior-year transactions.
Important: Always create a verified backup before year-end closing. If an external accountant reviews the year, complete their adjustments before final close.
Prepare The Year
- Complete all monthly closing steps for the final month of the fiscal year.
- Confirm all sales, purchases, payroll, inventory, banking, and tax entries are posted.
- Review open documents that should not remain open into the new year.
- Confirm fiscal year settings and closing permissions.
- Back up the database before final adjustments.
Review Balances
| Area | Year-End Review |
|---|---|
| Trial Balance | Confirm debit and credit totals agree and unusual balances are investigated. |
| Retained Earnings | Confirm profit or loss is moved according to QBM and accountant requirements. |
| Bank | Complete reconciliation through the year-end statement date. |
| A/R and A/P | Review old open balances, write-offs, unapplied payments, credits, and statements. |
| Inventory | Review physical counts, valuation, negative quantities, serials, lots, and obsolete items. |
| Fixed Assets | Post depreciation, disposal, and asset additions where used. |
| Tax | Review VAT/tax returns, tax liability, and supporting transaction reports. |
Archive Reports
Before locking or closing the fiscal year, export or print the final report package required by management or audit.
- Trial Balance
- Profit and Loss
- Balance Sheet
- General Ledger detail
- A/R and A/P aging
- Bank reconciliation reports
- Inventory valuation and stock reports
- VAT/tax reports
- Fixed asset reports where used
Closing Actions
- Post final accountant-approved adjustments.
- Run final financial statements and compare them to the accountant's expected balances.
- Close or restrict the fiscal year according to company policy.
- Confirm users cannot accidentally change prior-year transactions unless they have permission.
- Create and store a final post-close backup.