SAP Business One – How To Perform Year End Closing

One of the few regular maintenance tasks you’ll want to do in SAP Business One is to close the Profit and Loss account balances at the end of the year.

This action will create journal entries in the general ledger to set the account balances to zero and sweep the amounts into your Retained Earnings account. In so doing you will start all P&L account balances fresh.

Note that you can perform this closing at anytime and often companies make this entry to their General Ledger weeks or even months into the new year. SAP B1 uses the dates from your fiscal calendar to apply the postings as if they were done at year end, even if performed later.

Before you begin, always make sure to have a good backup of your company database. Users can be in SAP when you run the closing, but best practice is to have all users logged out.

To run the year end closing go to:

Administration->Utilities->Period-End Closing

In the Selection Criteria screen, be sure that all the P/L Accounts are marked with X.

Select the year, then the beginning period and ending period from the Period drop downs. Normally these will represent January through December, but if your company uses a different fiscal calendar select the first and last periods of the year.

Note that this procedure will work for companies that need to perform a closing monthly. If this is the case just select the month in the period from and to dropdowns.

Select the Retained Earnings account where all the balances will end.

Select the Period End Closing account. SAP B1 will use this account to clear the balance between removing it from the P/L accounts and into the Retained Earnings account. Because it sweeps the balances in and out, some users will let this happen in the Retained Earnings, per our example. You can create a separate account for this if needed.

Once the selections have been made, click on the Settings button.

Note there are options to Expand the selection, which includes the Settings, and to see previously generated closings.

In the Settings screen, enter a reference in Ref 1 or Ref 2, enter the first date of the new year in Due Date and Document Date. The remaining fields are optional to filter your selection criteria.

Select OK to continue.

The Period Closing screen allows you to filter any accounts you don’t want to include. Click on the Approved column header to select all accounts.

Make any optional selections for the journal entry that will be created. The periods, dates and references are populated from the previous screens.

Select Save to keep your selections and return to this activity at a later time or

Select Execute to let SAP B1 generate the Closing entries. Once the entries complete the list of accounts will disappear. At this point the Year End Closing is complete.

Some Tips for the Year End Closing:

1. You can rerun the closing as needed. Sometimes it’s necessary to make journal entries or transactions to the previous year after you close it. It’s OK to do this because you can rerun the Period End closing anytime. SAP will only take newly entered GL postings for this and add these to the existing GL accounts.

2. Lock the previous year’s fiscal periods. Once you are done with the closing, it’s best to make sure no one can perform transactions in that previous year. Go to the Posting Periods screen and manually Lock all the periods. This will ensure no one makes incorrect transactions. If you need to go back and correct previous entries, you can manually unlock the periods and then relock them when changes are completed. Keep in mind if you need to rerun the Period End Closing, the periods you select cannot have a status of Locked.

3. It’s possible there will be problems with the GL accounts during the closing. These will show as alerts in the System Message Log. If it doesn’t display at the bottom of the screen go to the menu at the top of the SAP client select Window->System Messages Log. The log will show a message about the issue. Make the needed corrections and restart the Execute button. You can leave the Period Closing screen active while fixing any account issues.

In case of questions or problems please contact the SEIDOR support team.