Close the fiscal year

At the end of a fiscal year, the revenue and expense accounts start again from zero, and the year’s profit or loss moves into equity. Axon Suite does this with one closing journal entry, dated on the last day of the year, that empties every income statement account into the retained earnings account you pick.

Example

A trading company ends its year with revenue of 900,000 and costs of 750,000. The closing entry debits the revenue accounts by 900,000, credits the cost accounts by 750,000, and credits the 150,000 profit to Retained earnings.

Get the year ready

Before you close the year:

• post or delete every draft journal entry dated in the year;
• close or lock every period except the last one (Soft closed is not enough);
• leave the last period Open, because the closing journal entry posts into it.

Close the year

1. Go to Finance ‣ Setup ‣ Fiscal periods and open the fiscal year.
2. Click Close year.
3. Read the Pre-close checks. When every check passes, click Continue.
4. Pick the Retained earnings account: the equity account the year’s result moves into.
5. Click Close year.

Axon Suite posts the closing journal entry and closes the last period. The year shows Closed in the fiscal periods list, and the closing entry appears in Finance ‣ General ledger ‣ Journal entries with the type Closing.

Caution

Pick an equity account in Retained earnings account. The list offers every posting account, and the year’s whole result lands in the one you pick.

Reopen a closed year

To correct a closed year, void its closing journal entry.

1. Reopen the year’s last period until it shows Open.
2. Open the closing entry from Finance ‣ General ledger ‣ Journal entries and click Void.
3. Keep a Date in the reopened period, and confirm.

The year shows Open again. Post your corrections, then close the year once more.

Messages you may meet

Message	What to do
The fiscal year still holds draft journals. Post or delete them before closing it.	Post or delete the drafts dated in the year.
Every period in the year is closed before the year itself can be.	Close every period except the last one.
Periods close and reopen in order, so the neighbouring period is dealt with first.	Reopen the last period of the year, so the closing entry can post into it.
The fiscal year carries no profit-and-loss activity to close.	Nothing posted to revenue or expense accounts in the year, so there is nothing to close.
The fiscal year is already closed; reverse its closing journal before closing it again.	Void the existing closing journal entry first.