How to do the accounting closing in Business Central

The accounting closing is one of the most important moments of the year for any financial department. It requires order, precision, and a thorough knowledge of each step. And although Business Central makes the process much easier, it is normal for doubts to arise.

Here, you can find the key points to successfully perform the accounting closing in Business Central.

1. Preparations for the closing

Before executing the accounting close, it is important to get everything ready. Business Central requires a series of preliminary steps to ensure that the final calculations are correct.

Create the new fiscal year

The first step is to generate the next fiscal year in the accounting calendar. If it does not exist, the system will not allow new transactions to be recorded in the coming year.

Set the closing of the current fiscal year

The period is marked as "Year closed", but this does not block the posting. The system still allows new entries, which is essential when adjusting last-minute transactions.

Currency adjustment

This process recalculates foreign currency balances and generates the corresponding adjusting entries. It is important to run this before closing to ensure the correct valuation of the affected customer, supplier, and bank transactions.

Inventory Variation

Business Central automatically calculates the stock change based on inventory and valuation. This entry is part of the usual adjustments before closing.

Fixed asset depreciation

From the Fixed Assets module, the depreciation for the period is executed and recorded. In this way, the accounts of group 68X are updated before regularizing.

2. Closing operations

Once all the transactions have been prepared, it is time to close the fiscal year.

Recording the Adjustment Entry

This entry summarizes the result of the fiscal year:

• Add all the accounts of group 6X (expenses).
• Add all the accounts of group 7X (income).
• Calculate the difference
• Transfer this result to account 129X

Business Central records the adjustment entry automatically, leaving the accounts of groups 6 and 7 ready for the new fiscal year.

Assign a journal entry number for the period

This process is essential so that the journal entries are numbered sequentially in number and date, and the official journal can be printed correctly.

3. Reports and visualization

They allow us to extract the information to present the official accounting books of our company.

Official journal

It details a list of all the accounting entries made during the fiscal year.

Additions and Balances

Allows us to validate that all the accounts balance and are correctly updated.

Balance Sheets and Income Statements

They allow for the analysis of the economic situation and the financial performance of the company.

Enable new serial numbers and record dates.

Finally, the new recording series of the new fiscal year is configured to start accounting from day 1. Optionally, we can block the dates of the year ending to avoid errors.