Accounting closure

Introduction

The closing of accounts is the closing of the financial year. It is a compulsory formality for all companies, and must be carried out once a year.

More concretely, closing the books means closing the accounts:

• By finalising the recording of all the accounting entries for the financial year in question.

• Gathering the documents needed to produce the company's balance sheet.

Configuration of accounting closing

• Opening account / Closing account: this is an account that is used when launching the closing or opening batch for the generated entries in exchange for creating a balance for each of the closed financial accounts. In principle, this is a special account 891000 or 890000 that is used solely for this purpose.

• Income statement (profit) / (loss): this is an account that is used in the closing batch in the income statement of the generated entry (depending on whether it’s a profit or a loss).

• Authorised roles for provisional closure: users associated with these roles will have the right to provisionally close an accounting period (from Open to Provisionally Closed).

• Authorised roles for creating/editing entries for a provisionally closed period: only users associated with these roles will have the right to create/edit entries for a provisionally closed period.

• Authorised roles for accounting closure: users associated with these roles will have the right to proceed with the definitive closure of an accounting period and the closure of the accounting year (fiscal year).

Accounting Closing Assistant

Access: Accounting → Periodical processing → Annual processing → Year closure

The wizard guides users through the closing procedure, providing an overall view of the progress:

• When creating a new record, select the company and the fiscal year for which you want to carry out the closure.

• Closure steps : a list of closure steps is predefined. The steps are by no means compulsory, and depend on each company. It’s a checklist that makes it easier to access the process and monitor its progress.

• You will have a list-type view with an overview of the progress of all closures. This is useful when you are managing several companies. If you open a file, you will find the progress of each stage. The stages are predefined and it is not possible to add another stage or to delete one. This is a to-do list where you can tick or untick tasks as you go along.

• Validate / Cancel / Open action to execute: each step has three buttons. The first is the “Validate” button (tick icon), the second is the “Cancel” button (cross icon), and the third is the “Open action to execute” button (person icon), which opens the associated action page in a new window. You cannot access the next step without confirming the previous step.

Wizard steps :

1. Cut-off generation: opens the cut-off generation batch.

2. Fixed asset realization: opens the batch for carrying out fixed assets. The batch will go through all the depreciation lines in the fixed asset master records and record all the economic and special depreciation lines. By default, the entries are generated in “New” status. You must therefore remember to post them.

3. Move consistency check: opens the batch in order to check the consistency of accounting entries (it involves running the same checks that have been carried out when an entry is being accounted. Example: check the period, cut-off period, etc).

4. Accounting Reports: opens an accounting reports view (balance sheet, income statement, general ledger, etc.) which can be used at the time of closing.

5. Calculate the outrun of the year: opens a new window in order to calculate the result of the year, by calculating the net balance of classes 7 and 6 in order to deduce the result (profit or loss).

6. Closure and opening of fiscal year: allows you to launch the accounting closing batch, in order to close and/or open a financial account.

7. Fiscal Year Closure: directly launches the fiscal year closure after a warning message is displayed. This action changes the status of the selected fiscal year to Closed. You can also perform this action from the form view of a fiscal year.

Accounting closure batch

You can generate three types of entry: closing entries for accounting accounts / opening entries for accounting accounts / profit and loss entry.

Access: Application config → Batches→ Accounting batches

1. Close the year accounts: select “Close/Open the annual accounts” as an action on the accounting batch file. Then tick the box “Close the year accounts”. This option allows you to close the financial accounts for the selected fiscal year. The closing action will generate one accounting entry per selected financial account (class 1 to 7) over the closing year. Select the year. The closing date is automatically updated.

• Select the financial account to be closed (class 1 to 7). The direction of the generated entry will depend on whether the account has a debit or a credit balance.

• The account has a debit balance: credit the financial account and debit the Closing balance sheet financial account (891).

• If the account has a credit balance: debit the financial account and credit the Closing Balance Sheet (891) account.

2. Open the year accounts: select “Close/Open the annual accounts” as an action on the accounting batch file. Then tick the box “Open the year accounts”. This action is used to open the financial accounts for the following financial year. By ticking this box, the “Reported balance date” will be automatically determined. The opening action will generate an accounting entry for each selected financial account (from class 1 to 5) for the following financial year. The nature of the generated entry will depend on whether the account has a debit or a credit balance.

• The account has a debit balance: debit the financial account and credit the opening balance sheet financial account (890).

• The account has a credit balance: credit the financial account and debit the Opening balance sheet financial account (890).

• Move description: enter the description of the entry here (can be found in Close/Open the accounts tab).

• Allocate per partner: assign entries by third party by activating this option. To do this, the financial account and the “Use for partner balance” option (on the financial account file) must be activated.

3. Generate result move: this generates the profit and loss for the financial year. This option is only available when generating opening entries. The direction of the accounting entry depends on whether the financial year is in profit or loss.

• The financial year is in profit: credit the profit and loss account for the financial year (120) and debit the opening balance sheet account (890).

• The financial year is a loss: debit the profit and loss account for the financial year (129) and credit the opening balance sheet account (890).

• Generated moves status: entries will be generated with the status “Daybook” or “Accounted” (it depends on the configuration of the company and the journal). If you want to generate entries in Simulated status, you will need to activate this option in the batch. You also need to ensure that this status is compatible with the journal and that it is activated in the Accounting Configuration (Accounting app) for the company.

4. Edit trial balance: at the end of processing, you can edit the trial balance of the new entries journal for the following financial year.

5. Start: Click on “Start” button to start processing. Entries will be generated, for example, in “Daybook” status (this will depend on your configurations) with a functional mode depending on the type of entry (Opening or Closing).

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Allocate per partner: if this option is activated, you will also be able to find entries assigned by third party. The third party will be entered in the Partner column.

Closing the financial year

Access : Accounting → Configuration → Financial → Fiscal years

You can then proceed and close the financial year for tax purposes from the form view of the financial year.

1. Close the financial year: start closing the financial year by clicking on the ‘Close the financial year’ button. Once closed, it is possible to adjust the financial year if necessary.

Year-end adjustment

Once a financial year has been closed, it is no longer possible to modify or create entries.

1. Adjust financial year: you can, however, adjust the financial year using the Rectify the financial year button in the financial year form view.

2. Adjusting : the status of the fiscal year changes to “Adjusting”.

3. You can open the period you wish to rectify at this point. Its status also changes to “Adjusting”.

4. This status allows you to enter rectifying entries in the accounts (“Adjusting moves” tag).

5. The list of rectifying moves is visible at the level of the concerned accounting period as well as in the fiscal year view.

Temporary period closure

From an accounting period record, the administrator has several options for restricting the recording of accounting entries in preparation for the closure.

• Temporally close the period: this action restricts the creation or editing of entries to users who are entitled to do so (accounting configuration).

• Close journals on the period: is used to select the journals to be closed for the period. By selecting a journal from the list below this box, the journal can no longer be used to enter entries for this period.

• Keep some journals open for the period: in contrast, this option is available when the period is temporarily closed. You can then open the creation and editing rights for all users on certain journals for this period.