How To Fix your Balance Sheet

Year End Closing

SuiteAnswers ID > 7666

Closing the books for a year ends the opportunity to post entries to the sub-ledgers and G/L to transfer net income to retained earnings (for a corporation) or to owner's equity (for an individual proprietorship).

To perform year-end closing, go to Setup > Accounting > Manage G/L > Manage Accounting Periods.

Using NetSuite financials, you are not required to make journal entries to close out the income statement to retained earnings. You can choose to do one of the following:

1) Automatic Close – Allow NetSuite to automatically “close” year end. Then, your books reflect the correct balance in retained earnings based on the dates you select on the balance sheet. This method is STRONGLY recommended by NetSuite. For more information, see Automatic Close.

2) Manual Close – Manually close income statement accounts to the balance sheet by making journal entries to close accounts. For more information, see Manual Close.

Preparing for Year-End Closing

Be aware of the following as you prepare for year-end closing:

Before year-end close, you should close all of the periods included in the year.

A checklist of required tasks is provided to guide you through the closing process for each period. See Using the Period Close Checklist.

If you use multiple currencies, you should revalue open currency balances for each period before you close it. See Generating Revaluations.

It is important to understand the difference between closing a period and locking transactions for a period.

Closing a period prevents postings for any dates included in the period, by anyone, and should be the final step after a process of accounts review and reconciliation.

Locking transactions for a period prevents users without override permission from posting to the period, and is a preliminary task before closing occurs.

For more information, see Closing Accounting Periods.

If you use NetSuite for payroll processing, you must complete additional payroll tasks before year-end close. See Performing Quarterly or Yearly Payroll Tasks.

Important: NetSuite recommends that you consult with your accountant to ensure that your books fulfill all legal requirements.