At the end of each fiscal year, you must run the Year End procedure located in the Your Company > GL tab to roll current earnings retained earnings for the prior year and establish beginning balances for Asset, Liability and Equity accounts in the new year. The Year End procedure consists of two steps. The first rolls the balances forward to the new year and the second closes the period year and updates the current fiscal year as well as updating the “Warn If…” and “Error If…” period and year range.
You can enter and post transactions into the new year without running the year end procedure as long as the Warn If After and Error If after periods include those dates. You can manually change those periods without running the year end procedure.
If the prior year has not yet been closed and you want to run financial statements for the new year, you must perform step #1 to update balances for the new year each time before running the statements.
Year End Steps:
1. Year-end processing is done via the Your Company Year-End button.
This carries forward GL balances for asset, liability and equity accounts, and creates an opening balance for the retained earnings account based on the retained earnings closing balance plus the net of the revenue and expense accounts. This allows financial statements to be run for the new year. NOTE: ALL AR/AP INVOICES, AR/AP CHECKS AND JV ENTRIES MUST BEPOSTED BEFORE YOU CAN RUN THE YEAR END PROCESS.
2. After this, you will be prompted to CLOSE the prior year. You have an option to close the current year by clicking Yes on the screen below or leave it open by clicking No. Leaving the current year open allows more transactions to be entered for the old year. You can then re-run the year-end (Step 1) again when you are sure there will be no more transactions which will re-calculate the balances to carry forward and select Yes to close the year. Closing the year ensures that no transactions are accidentally entered to the old year. You can carry the balances forward (Step 1) as often as needed until the year is closed.