Fiscal year and period closing

Fiscal year and period closing

Closing a fiscal period is a critical step in accounting: it marks the end of one period, prevents further edits to historical transactions, generates year-end financial statements, and rolls retained earnings forward into the next period. In Usystems, you close periods through the period management settings.

Before you start

• Permissions needed: Finance Admin or company administrator role.
• What you must do first:
  • Ensure all transactions for the period are recorded and reconciled.
  • Run trial balance and balance sheet reports to verify that debits and credits net to zero.
  • Verify that payroll, revenue, and expense transactions are complete.
  • Print or export any reports you need for record-keeping or audit.
• Data you'll need: The end date of the fiscal period being closed.

Steps

1. Go to Settings → Accounting Periods (or similar path in your accounting menu). Open in Usystems

2. Find the fiscal period you wish to close. Periods are listed chronologically; the current or most recent open period is highlighted.

3. Click on the period row to open its details.

4. Review the period summary:

   • Verify the start and end dates.
   • Check the total number of transactions and the date range of recorded activity.

5. Click the Close Period button.

6. The system will perform a final integrity check:

   • Confirming that total debits equal total credits.
   • Verifying that all period-dependent features (payroll, inventory counts, etc.) are finalized.

7. If the check passes, confirm the closure by clicking Confirm Close.

8. The period is now closed. A lock icon appears next to the period name, and no new transactions can be recorded with a date within this period.

Accounting impact

When you close a fiscal period:

• Income and expense accounts are zeroed out (closed to a temporary "closing" account).
• Net income (profit or loss) is calculated as the difference between total income and total expenses.
• Retained earnings are updated with the net income, rolling it forward into the equity section.
• Balance sheet accounts (assets, liabilities, equity) carry their balances forward to the next period; they are never closed.
• Trial balance for the closed period now shows only balance sheet accounts; income and expense detail is archived in the closed-period ledger.

Tips & common mistakes

• Close in chronological order: Close fiscal periods starting with the oldest open period. Do not skip periods.
• Reconcile first: Reconciling accounts (especially bank accounts and customer/vendor balances) before closing prevents costly corrections later.
• Keep closing entries: Usystems retains all closing entries in the journal for audit trail and restatement purposes; you can review them anytime.
• Next period opens automatically: Once you close a period, Usystems automatically creates the next period (if it does not exist) and sets it as the current period. No manual action is needed.