Year-end close checklist in Business Central

Year-end in Business Central is not a different process from month-end; it is the twelfth month-end with some extra steps on top, and the extra steps have to happen in a particular order. This is the checklist we send to finance teams in December. It assumes a UK business on a cloud Business Central with a fiscal year that may or may not match the calendar year; adjust the dates to yours.

Before the final month

1. Agree the timetable. Day one: stock count. Day three: sub-ledgers closed. Day five: management accounts. Day ten: adjustments posted. Day fifteen: draft statutory pack. Write it down and send it to the auditors.
2. Check the accounting periods. Finance → Accounting Periods: confirm the periods for the new fiscal year exist (Create Year if not) and that the first period is flagged as the start of the fiscal year. If you miss this you cannot post in January.
3. Check the number series. Any series that resets with the year (invoice numbers, journal batches) needs its new-year starting number set up now.
4. Review open documents. Unposted sales and purchase documents, open journals, unapplied payments. Decide what is posted this year and what waits.
5. Dimension and account housekeeping. Block the G/L accounts and dimension values you want retired so that nothing is posted to them in the new year.

Closing the sub-ledgers

6. Sales. All despatches invoiced up to the cut-off. Credit notes for known returns raised. Customer statements run and reviewed. Bad debt provision reviewed against aged debtors.
7. Purchases. All receipts matched to invoices; GRNI (received not invoiced) reviewed, accrued where the invoice has not arrived. Supplier statements reconciled for the top suppliers.
8. Stock. Physical count posted via the physical inventory journal. Adjust Cost – Item Entries and Post Inventory Cost to G/L run (or confirmed automatic). Stock valuation report agrees to the inventory G/L accounts. Slow and obsolete stock provision reviewed.
9. Fixed assets. Additions and disposals posted, depreciation calculated and posted for the year, FA register agrees to G/L.
10. Bank. Every bank account reconciled to the statement at year-end date. Petty cash and credit cards included.
11. Payroll and expenses. Payroll journal posted, PAYE and pension liabilities agree to the final submissions, expense claims accrued.
12. Intercompany. Intercompany balances agree between companies and are eliminated in the consolidation.
13. VAT. Final period VAT return calculated and submitted via Making Tax Digital; VAT control accounts agree to the return.

Closing the general ledger

14. Accruals, prepayments and deferrals. Posted, with the recurring journals reviewed so that the new year's reversals are set.
15. Currency revaluation. Adjust Exchange Rates run for customer, supplier and bank balances at year-end rates.
16. Management accounts. Final P&L and balance sheet from the financial reports, reviewed against budget and prior year. This is the point at which the auditors get the trial balance.
17. Close the periods. Accounting Periods → Close Year. This marks the year closed; you can still post adjustments to it, but they will be flagged as prior-year entries. Do not do this until the management accounts are final.
18. Close income statement. Run Close Income Statement to generate the journal that moves the P&L balances to retained earnings. Post it. If you later post audit adjustments to the closed year, run it again; it only picks up the difference.
19. Lock posting dates. General Ledger Setup (and User Setup for anyone who needs an exception): set Allow Posting From to the first day of the new year so nobody posts into the closed year by accident.

The audit pack

20. Trial balance, aged debtors, aged creditors, stock valuation, FA register, bank reconciliations, all at year-end date, saved as PDF and Excel, filed in one folder.
21. Audit adjustments. Posted to the closed year with a clear document number, then Close Income Statement re-run. Final trial balance re-issued.
22. Audit trail. Business Central's change log and the financial report audit trail (version 29) answer most "who changed this" questions. Make sure the change log is switched on for the setup tables before the auditors ask.

Starting the new year

23. Budgets. The new year's G/L budget loaded (Excel import is fine) so that January's management accounts have a comparison.
24. Recurring journals and deferral schedules reviewed for the new year.
25. Reports. Financial report date filters, saved views and Power BI refreshed to the new year.
26. Tidy up. Retire blocked accounts and dimension values, archive old saved views, delete the test journal batches that accumulated in Q4.

Three things that go wrong every January

• Cannot post in January. The new fiscal year's periods were never created. Step 2.
• Retained earnings do not agree. Close Income Statement was run before the final adjustments and not re-run after. Step 18 and step 21.
• Someone posted into last year. Posting dates were not locked. Step 19.

If your first year-end on Business Central is coming up, we run it with you: a half-day before, a half-day after, and the phone in between. Get in touch in November, not January.

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