Each year to close your books and move the Income Statement amounts the the Retained Earnings account on the Balance Sheet, you will perform a year end close.
Here are the steps in Business Central to perform this function:
Step 1 – Close the Year
Go to ‘Accounting Periods’ and select a line from this year and click ‘Process’ then ‘Close Year’.
A message will pop up asking you to confirm you are closing the right year. Click ‘Yes’.
The ‘Closed’ and ‘Date Locked’ fields will now be set to ‘Yes’.
Step 2 -Create the Year
If there are not already records for the next fiscal year, click on ‘Create Year’ in the ribbon at the top. You can create accounting periods in advance for coming years.
A box will pop up asking for the ‘Starting Date’, ‘No. of Periods’ in the next fiscal year, and the ‘Period Length’, usually 1M. Click ‘OK’.
The Accounting Periods page will update with the new Accounting Periods.
Step 3- Run the ‘Close Income Statement’ batch job
Go to ‘Close Income Statement’
The ‘Fiscal Year Ending Date’ will default in but you can change it as necessary.
Select the ‘Gen. Journal Template’ =GENERAL from the drop down box.
In the ‘Gen. Journal Batch’ field ,select the batch you want the closing entries to go to.
Enter a ‘Document No.’ to use. I typically do CY2016 where ‘CY stands for Close Year’. You can use whatever you like, the C in front of the date on the records in the General Ledger Entries is going to make it very easy to identify these records.
Select your ‘Retained Earnings Acc.’ from the drop down.
The ‘Posting Description’ populates by default. You can manually override to your own description.
If you are using ‘Business Unit Code’, turn the toggle on. This will create one entry per Business Unit Code per G/L Account.
If you are using Dimensions, select the … and then place a checkmark in the ‘Select’ column for each dimension and click ‘OK’.
‘Inventory Period Closed’ will show if you have closed the Inventory Periods. Once you are done filling in the page, click ‘OK’.
You will then see then this message:
Step 4- Post the General Journal Entries
Navigate to the General Journal batch you specified:
One record per Business Unit and Dimension combination will be created. Click ‘Post’ and you are done.
If we search for ‘G/L Register Archive’,we can see that the Source Code is ‘CLSINCOME’.
Click on ‘Process’ and then ‘General Ledger’
Note that the entries show a C in front of the date. This is an indicator they are closing entries.