Closing Out the Fiscal Year in Business Central

Posted on: January 23, 2022 | By: Jim Bertler | Microsoft Dynamics Business Central

With many businesses wrapping up their fiscal year on December 31st, January is now the month of closing out that year in software systems so that these companies can be freshly reset for the upcoming fiscal cycle. 

Having precise and accurate records of your company’s yearly activities is crucial when pursuing growth in profits and efficiency. These records not only allow for you to gain insight on your company’s current economic situation, but they provide you with useful data that can be analyzed when making decisions in the future.

Business Central makes the process of closing out one’s fiscal year relatively easy and straightforward, so in this post we are going to review the steps to complete this task and ensure your company is fully prepared for another year of economic growth and success.

In order to close out a fiscal year in Business Central, you must close it using the accounting period option, then you can generate a year-end closing entry by enabling the Close Income Statement Option, and finally, you can post the year-end closing entry, allowing you to determine total profit and loss for your business.

Closing the Fiscal Year

In order to actually close the year, go to the Accounting Periods module by searching for it in the search bar. Once here, identify the correct accounting period and select the Close Year option. You will be asked whether or not you would like to complete this action. Select yes to complete closing out the fiscal year. It is important to note that once you have closed a fiscal year, you cannot open it again, nor can you change the period of the year.

Generating a Year-End Closing Entry

You can now create a year-end closing entry. In order to do this, type Close Income Statement into the search bar and select the corresponding result. Open up the Options tab and fill in the following fields:

  • Fiscal Year Ending Date
  • Gen. Journal Template
  • Gen. Journal Batch
  • Balancing Account No.
  • Document No.
  • Net Profit Account No.
  • Net Loss Account No.
  • Posting Description
  • Business Unit Code
  • Dimensions
  • Inventory Period Closed

Once you have filled out the above fields with the proper information, hit the OK button to create the correct journal entries

Posting the Year-End Closing Entry

To post the entry you just created, go to the General Journals module. Once here, select the Batch field and identify the batch that has the closing entries. You then add these entries to the journal lines, and select Post. Posting this entry zeros out the income statement account, giving you a fresh set up for the upcoming fiscal year. 

Next Steps

Business Central makes all accounting business transactions quite straightforward and simple, taking away some of the stress ensuring that the information is accurate in the face of manual human labor. If you want to explore the software more and learn about how it can help grow your business, contact an experienced consultant at Logan Consulting today.



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