Year end closing is a concept which prepares the accounting books for the next accounting year . There’s no inherent requirement for this process to be run at least once a year. This procedure closes the books up to the given date. If the first book year of the company spans more than a year, then the closing will span more than a given year. If it has been more than a year since the last year end close then this closing will span all data since the last year end close.
This procedure freezes the accounting data as described in Section 43.4 on page 43.4. Additionally it clears out all of the profit and loss accounts by setting the balances to zero and posting their balance to the retained earnings account.
Some businesses prefer to create a retained earnings account for each book year they close. LedgerSMB supports that use-case by allowing the user to select which retained earnings account the balance should be posted to.
In order to run year end closing the user must have the role yearend_run.
In order to re-open a year end closing the user must have the role yearend_reopen. Typically the role to re-open an accounting period is reserved for upper management as any changes to previous periods may have tax, legal, or other government reporting impacts.
The year procedure is run by filling in the data in the top part of the ”Period closing dates” view, then clicking the button Post Yearend. For example, see Figure 43.1 on page 43.1.
Be careful here, because the UI default value is the first G/L account available for this procedure, not necessary the correct retained earnings account.
Some companies want may to include additional transactions in the year end close. Direct support for this use case isn’t currently available. Use a manual G/L transactions to accomplish this.