Although it’s not necessary to formally “close” a year, you will want to calculate beginning balances for the new year, prior to running any overall financial reports for that year. When you calculate beginning balances, revenue and expenses are set back to zero and the difference between them (your profit or loss) is added to the equity account chosen under Account Assignments.
Calculate Balances for New Year
- At the Beginning Balances screen:
- At the Period Ending Date screen, select the last day of your prior fiscal year (like Dec. 31st) and click Calculate. If there is no Calculate button that means no balances have ever been set up. Follow the steps to Enter New Balances.
- Once the balances are calculated you’ll arrive at the Beginning Balances Summary screen. These balances are the starting balances on your financial reports for the following year.
Caution: On rare occasions, you may be directed by your accountant to modify the balances. Changes will affect the beginning balances on your financial reports. To view or edit, dbl-click anywhere on the line (such as on the Period Ending Date), then click the Edit button.
- When you are finished, click Exit.
Important! If you make any entry (in any module) dated prior to your most recent Period Ending Date, you MUST recalculate balances. To do so, delete that line from the main Beginning Balances screen and repeat the steps above.