How to Perform Year-End Close in Business Central

In this video, Amanda Mayer walks users through year-end close in Business Central and highlights a few criticals steps.

Key Takeaways

• Before closing the year: Before closing an inventory period, ensure that all accounts payable processes are completed and reconciled. Once confident that everything is in order, proceed to close the inventory period to maintain financial statement accuracy. No further postings can be made once the period is closed.
• Conditions of closing: When reopening an inventory period, all subsequent periods will also reopen. The closed field prevents changing the year, ensuring that once a year is closed, it cannot be altered to a short or long year.
• Set up accounting periods: If you’ve done budgeting for the next year, accounting periods might already be set up. If not, you can create them manually or automatically, depending on your fiscal year structure.
• Financial statements: To close the financial statements, post the income statement balance to the retained earnings account. This process doesn’t require a current-year retained earnings G/L account, and you can use totaling accounts or add a line item for current-year retained earnings on your financial statements.
• Dimensions: When closing G/L accounts to zero based on dimensions, ensure all relevant dimensions are selected. Reopen any blocked G/L accounts and remove any new mandatory code requirements to complete the process, preferably during off hours to avoid data issues.
• Populate the journal: Before proceeding, ensure all steps are completed, then populate the journal without automatic posting. Verify the retained earnings value against the expected income statement amount to ensure accuracy, as discrepancies may arise from G/L account setup.
• Update G/L accounts: If a G/L account is incorrectly identified as a balance sheet account, it won’t be included in the close income statement process. To correct this, delete the journal entry lines, fix the G/L account, and rerun the process.
• Post and adjust: After posting, the retained earnings for 2022 will appear as a single line item in the chart of accounts, with a posting date that ensures accurate year-over-year reporting. If adjustments are needed after closing the year, simply reopen the period, make the necessary changes, and close it again.
• Correct entries: Closing a period does not prevent posting into that time frame; only the general ledger and user setup can do that. Ensure dates are properly set up and use specific batches for correcting entries, especially during audits or reviews.