How to Run the Close Income Statement in Microsoft Dynamics 365 Business Central

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Run Close Income Statement in Business Central

Our how-to NAV/BC articles offer insights and tips on a range of issues and this week we discuss the Close Income Statement batch job. In Microsoft Dynamics 365 Business Central, the Close Income Statement batch job transfers the year’s results to a Retained Earning account in the balance sheet and closes all the income statement accounts.

This creates a journal that will be posted manually. When an additional reporting currency is used, the system will post the additional currency directly to the ledger when the currency batch is posted.

Close Income Statement in Business Central

In Business Central, you can run the Close Income Statement multiple times. You can even post to a previous fiscal year, even if the year has been closed, by simply running the batch job again. When the journal is created, it posts with a “C” in front of the date, for example: C12312019

  1. Choose the search icon and type ACCOUNTING PERIODS, then choose the related link:
    accounting screenshot business central
    Accounting Periods link in Microsoft Dynamics Business Central.

     

  2. Select EDIT LIST on the Accounting periods page, then select PROCESS, and select CLOSE YEAR
  3. Choose the search icon, type CLOSE INCOME STATEMENT, and choose the related link:

    screenshot close income statement
    Close Income Statement link in Microsoft Dynamics Business Central.

Close Income Statement Values

The field values on this screen are:
Fiscal Year Ending Date – Populates with the date of the close fiscal year.
General Journal Template – Click on the down arrow and select from list; usually the selection would be “General”.
General Journal Batch – Click on the down arrow and select from the list; you have the ability to create a new batch. The common practice is to have a batch for year-end close (YE).
Document No. – Should populate automatically if you selected a No. series in the Gen. Journal Batch setup window.
Retained Earnings Account – Select the retained earnings account to which you want to close the fiscal year.
Post to Retained Earnings – This provides an option to post BALANCE or DETAILS.

retained earnings business central
Post to Retained Earnings in Microsoft Dynamics Business Central.

Posting Description – Default text is close income statement – can be changed if you choose.

Close by:

Business unit code – You will only check this box if you are in the consolidation company and want to close by business unit for the income statement. NOTE: When closing by business unit, each income statement account is closed by business unit, but the retained earnings account is closed by the company

Dimensions – Click the ellipse and select the dimension boxes you want to use for the income statement close. An entry will be created for each dimension used in the GL account.

NOTE: When choosing dimensions, each income statement account is closed by the dimensions used, but the retained earnings account is closed by the company, NOT by dimension.

ALSO NOTE: If you do not choose to close by dimensions or business unit, only one G/L line is created for each income statement account.

When all the above boxes have been filled in as necessary, click OK. The process to close the income statement will proceed.

Next: Go to General Journals

  1. Go to General Journals, or In the Search box, enter General Journals, and then choose the related link.
  2. In the General Journals window, select the Batch Name used when closing the income statement.
  3. Once you select the correct batch name, you will see a completed journal with a “C” in front of each line for the closing date. The retained earnings category has been closed out as you can see from the last line in the journal. The Total Balance on the bottom right of the journal should be zero.
year end journal business central
Year End General Journal in Microsoft Dynamics Business Central.

NOTE: With Dimensions and the close of the year, you will only receive one retained earning line. When closing it out, you will need to delete the retained earnings line and calculate the RE for each dimension. For example, a user can close by Divisin and a pivot table will be needed to calculate the entry.

Closing Your General Ledger (G/L) Account

There are multiple ways to close out a G/L account:

  • To close a General Ledger account only, only one entry will be made to each G/L account.
  • To close by multiple dimensions (e.g., Department), one entry will be made to each General Ledger account and for each individual department code used at that General Ledger account in that  year. So if ten different department codes have been used, ten closing entries will be left to the General Ledger account.
  • When you close by two dimensions — Department and Project — one entry will be made to each General Ledger account for each individual combination of Department code and Project code; used at that General Ledger  account in that year. So if ten different Department codes and ten different Project codes have been used, you'll end up with 100 closing entries to that account – if all combinations have been used.
  • When you increase the number of dimensions being closed, you'll multiply the number of entries made.

ArcherPoint How-To Videos and Blogs

Learn more about period end closing processes in Microsoft Dynamics NAV/Business Central. If you have any questions about this process or other accounting processes in Dynamics 365 Business Central or Dynamics NAV, contact the experts at ArcherPoint. Learn more about Microsoft Dynamics NAV and Business Central by viewing other How-To videos or reading more How-To blogs from ArcherPoint.

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