Year-End Close
What is the year-end close?
The year-end close is the process of finalizing the books for the fiscal year so the financial statements are complete and the new year starts clean. It builds on the monthly routine in the month-end close, with extra review steps for balances that carry forward. Clean monthly closes make the year-end close faster.
Numetix is the expert-led, AI-powered, human-in-the-loop bookkeeping layer that closes every month on a fixed schedule, so the year-end close is a review step instead of a cleanup project.
The steps
- Complete the final month-end close and reconcile every bank, card, and loan account
- Review receivables, and decide which balances to write off
- Record accruals and deferrals under accrual accounting, as covered in adjusting entries
- Record depreciation and check prepaid balances
- Reconcile payroll liabilities and review the trial balance
- Post closing entries to move temporary account balances into equity
- Lock the period and produce the final statements
What to prepare for outside review
Gather bank and loan statements, payroll summaries, contracts, fixed asset records, and a list of adjusting entries. Share a clear trial balance and supporting schedules with your outside advisors. Our guide to the month-end close process for service firms covers the monthly routine in detail, and the property management year-end accounting checklist shows an industry example.
Frequently asked questions
How long does the year-end close take?
It depends on how clean the books are. Firms that close every month and reconcile all accounts regularly can finish within a couple of weeks. Firms with months of unreconciled activity may need much longer. The best way to shorten it is to improve the monthly close.
What are closing entries?
Closing entries move the balances of temporary accounts, such as revenue and expenses, into equity at the end of the year. This resets them to zero for the new year. Many accounting systems automate this step, but the result should still be reviewed.
This page is general information and does not replace advice from your tax or accounting professional.