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Year-end close is the annual step that zeroes out your income and expense accounts and rolls the year’s profit (or loss) into Retained Earnings. It posts a single closing journal entry so that the new fiscal year starts with clean revenue and expense balances, and your accumulated profit lives on the balance sheet where it belongs. You’ll find this at: /accounting/periods (navigation: Finance → Periods & Close), in the Year-end close card.
📷 Screenshot: Year-end close card with fiscal year, close date, period start/end, and notes — to be added.

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What year-end close does

When you run a year-end close, Hitaji:
  1. Computes the income statement (revenue and expenses) for the fiscal period you specify.
  2. Builds a closing journal entry that:
    • Debits each revenue account by its balance (revenue normally carries a credit balance, so debiting it brings it to zero), and
    • Credits each expense account by its balance (clearing each to zero).
  3. Posts the net income to your Retained Earnings account — credited if the year was profitable, debited if it was a loss — so the closing entry balances.
  4. Posts that journal entry to the general ledger and links it to the close record so you have a permanent reference.
  5. Writes a CLOSED entry to the audit trail capturing the fiscal year, the period, the close date, and the net income.
The result: revenue and expense accounts read zero going into the new year, and Retained Earnings reflects the cumulative result.

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Before you can close a year

The system enforces several prerequisites and will reject the close with a clear message if any is unmet:
  • Every accounting period in the fiscal year must be CLOSED. If any period in the year is still open you’ll see “All accounting periods for fiscal year <year> must be closed before year-end close.” Close your monthly periods first — see Closing a Period.
  • A Retained Earnings account must be configured in your chart of accounts. If it’s missing you’ll see “Retained earnings account is not configured.”
  • The fiscal year must not already be closed. Each fiscal year can be closed once per book; a second attempt returns “Fiscal year <year> has already been closed.”
  • Dates must be consistent: the period end must be on or after the period start, and the close date must be on or after the period end. Otherwise you’ll get a date-validation error.

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How to run a year-end close

  1. Open Finance → Periods & Close (/accounting/periods).
  2. Confirm every period in the year shows a CLOSED badge in the Accounting periods list.
  3. In the Year-end close card, fill in:
    • Fiscal year — the year you’re closing, e.g. 2026.
    • Close date — the date the closing journal entry is posted (on or after the period end).
    • Period start and Period end — the fiscal window to roll up (typically Jan 1 – Dec 31 of the year).
    • Notes — optional free text describing the close.
  4. Click Run year-end close.
  5. On success you’ll see “Year-end close posted”, and the close appears in the Closed fiscal years list with its net income and a reference to the closing journal entry.
📷 Screenshot: Closed fiscal years list showing FY, date range, net income, and the closing journal reference — to be added.

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”Submit close for approval”

The card also has a Submit close for approval button. In the current build the year-end close is treated as an admin-only operation, so this path auto-approves and posts the close directly — it returns a message such as “Year-end close auto-approved and posted” rather than parking it for a separate approver. Functionally it produces the same posted close as Run year-end close. There is no separate pending-approval queue for year-end close today.

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The Closed fiscal years list

Each closed year shows:
  • FY <year> and the period date range that was rolled up.
  • Net income for the year.
  • A reference to the closing journal entry that was posted (so you can trace the exact debits and credits).
Closed years are kept as a permanent record; the close record is unique per fiscal year per book.

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Who can run it

The Year-end close card lives on the Periods & Close page, which is reached through the Finance navigation (requires the accounting:read scope to appear). Year-end close is designed as an administrative action — the operation is intended for finance administrators, and the “submit for approval” path simply posts directly because of that admin-only posture.

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Good practice

  • Run the close only after you’ve reviewed and finalized the year’s trial balance and statements.
  • Use the Notes field to record context (who reviewed, what was outstanding) — it’s stored on the close record and the audit event.
  • Because the closing entry is a real, posted journal, treat it like any other adjustment: if you later discover the year needs to change, you’ll be dealing with reopening periods and reversing/re-posting, not editing the close in place.