Tips for Closing the Books in Business Central

For most organizations, it’s the time of year to get your financial house in order and close the books! The steps below will help you prepare to close your fiscal year in Business Central. Remember that the search feature in Business Central and Dynamics NAV is your friend.

How to Close Your Fiscal Year in Business Central

Complete the following steps to close your fiscal year in Business Central:

1. Create a new fiscal year: You can do this by working with Accounting Periods and Fiscal Years.
2. Specify system-wide and user-specific posting date ranges: Depending on your business needs, you may want to restrict user posting date ranges at the start of the period-end process or after it. You can specify user-specific posting date ranges in User Setup. Update the system-wide posting date range from General Ledger Setup.
3. Verify: Ensure that all receipts, shipments, invoices, jobs, service, and production order activities have been posted as applicable.
4. Investigate and fix any negative inventory quantities: Negative inventory carried across multiple periods may not be able to have their costs reconciled in a timely manner.
5. Ensure the Adjust Cost-Item Entries and Post Inventory Cost to G/L routines have been run: These must be run before viewing and verifying inventory reports for accuracy.
6. If you use production orders, run the Production Order: WIP report to reconcile with your WIP g/l accounts in the Inventory Posting Setup.
7. Close Inventory Periods if you are using them.
8. Run the Inventory to G/L Reconciliation report to see the value of Received, not Invoiced, and Shipped, not Invoiced amounts: This report will also help you reconcile the inventory sub-ledger to the general ledger.
9. Update currency exchange rates and adjust the exchange rates of posted customer, vendor, and bank account entries: You do this by first updating the Adjustment Exch. Rate Amount and Relational Adjmt Exch Rate Amt fields from the Currencies🡪Exch. Rates table, then running the Adjust Exchange Rates batch job. Ensure you have entered each currency’s relevant and correct Realized Gains and Losses g/l accounts.
10. Reconcile Accounts: Reconcile Accounts Receivable and Accounts Payable with the Aged Accounts Receivable/Payable reports and match them to your general ledger.
11. Print reports to verify general ledger, customer, vendor, and bank account balances before closing a period: These include trial balance reports for customers, vendors, bank accounts, the general ledger, and consolidated companies if the consolidation functionality is being used. Reconcile multi-currency bank accounts with the Bank Acc. – Detail Trial Balance report.
12. Run/Post Cost Journals: If using the Cost Accounting functionality, double-check your allocation setup and then run the Allocate Costs batch job or manually post cost journals.
13. Close Accounting Period: Close accounting periods and fiscal year, transfer income statement balances to balance sheet accounts with the Close Income Statement batch job, and post the year-end closing entries in the General Journal populated by that job.
14. Print your finalized financial reports: This can be done using the Financial Reporting tools.
15. Prepare to report sales or value-added tax (VAT) amounts collected from sales activities: This varies by each operating country and region, so contact your Microsoft Partner if you have any questions.
16. For those utilizing production, update your Operational Calendars.

Dynamics NAV and Business Central Year-End Closing Resources

You can find more detailed information about these steps in the following resources:

• Microsoft Learn provides a comprehensive guide on closing fiscal years and accounting periods in Business Central.
• ERP Software Blog provides a step-by-step guide on how to close the year in Business Central.
• Stoneridge Software provides a detailed guide on how to close the fiscal year in Business Central.
• Crestwood Associates provides a checklist and step-by-step process for closing the year in Business Central.
• ArcherPoint provides a comprehensive guide on how to close the year in Business Central and Dynamics NAV.

I wish you all a smooth year-end process.

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