93d2bfaff4
task-2823858
closes odoo/documentation#5208
X-original-commit: 8c03442791
Signed-off-by: Xavier Platteau (xpl) <xpl@odoo.com>
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113 lines
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================
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Year-end closing
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================
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Year-end closing is vital for maintaining financial accuracy, complying with regulations, making
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informed decisions, and ensuring transparency in reporting.
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.. _year-end/fiscal-years:
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Fiscal years
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============
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By default, the fiscal year is set to last 12 months and end on December 31st. However, its duration
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and end date can vary due to cultural, administrative, and economic considerations.
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To modify these values, go to :menuselection:`Accounting --> Configuration --> Settings`. Under the
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:guilabel:`Fiscal Periods` section, change the :guilabel:`Last Day` field if necessary.
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If the period lasts *more* than or *less* than 12 months, enable :guilabel:`Fiscal Years` and
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:guilabel:`Save`. Go back to the :guilabel:`Fiscal Periods` section and click :guilabel:`➜ Fiscal
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Years`. From there, click :guilabel:`Create`, give it a :guilabel:`Name`, and both a
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:guilabel:`Start Date` and :guilabel:`End Date`.
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.. note::
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Once the set fiscal period is over, Odoo automatically reverts to the default periodicity, taking
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into account the value specified in the :guilabel:`Last Day` field.
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.. _year-end/checklist:
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Year-end checklist
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==================
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Before closure
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--------------
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Before closing a fiscal year, ensure first everything is accurate and up-to-date:
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- Make sure all bank accounts are fully :doc:`reconciled <../bank/reconciliation>` up to year-end,
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and confirm that the ending book balances match the bank statement balances.
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- Verify that all :doc:`customer invoices <../customer_invoices>` have been entered and
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approved and that there are no draft invoices.
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- Confirm that all :doc:`vendor bills <../vendor_bills>` have been entered and agreed upon.
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- Validate all :doc:`expenses <../../expenses>`, ensuring their accuracy.
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- Corroborate that all :doc:`received payments <../payments>` have been encoded and recorded
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accurately.
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- Close all :ref:`suspense accounts <bank_accounts/suspense>`.
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- Book all :doc:`depreciation <../vendor_bills/assets>` and :doc:`deferred revenue
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<../customer_invoices/deferred_revenues>` entries.
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Closing a fiscal year
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---------------------
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Then, to close the fiscal year:
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- Run a :ref:`tax report <reporting/tax-report>`, and verify that all tax information is correct.
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- Reconcile all accounts on the :ref:`balance sheet <reporting/balance-sheet>`:
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- Update the bank balances in Odoo according to the actual balances found on the bank statements.
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- Reconcile all transactions in the cash and bank accounts by running the :ref:`aged receivables
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<reporting/aged-receivable>` and :ref:`aged payables <reporting/aged-payable>` reports.
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- Audit all accounts, being sure to fully understand all transactions and their nature, making
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sure to include loans and fixed assets.
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- Optionally, run :ref:`payments matching <payments/matching>` to validate any open vendor bills
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and customer invoices with their payments. While this step is optional, it could assist the
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year-end closing process if all outstanding payments and invoices are reconciled, potentially
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finding errors or mistakes in the system.
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Next, the accountant likely verifies balance sheet items and book entries for:
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- year-end manual adjustments,
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- work in progress,
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- depreciation journal entries,
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- loans,
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- tax adjustments,
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- etc.
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If the accountant is going through the year-end audit, they may want to have paper copies of all
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balance sheet items (such as loans, bank accounts, prepayments, sales tax statements, etc.) to
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compare these with the balances in Odoo.
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.. tip::
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During this process, it is good practice to set a :guilabel:`Journal Entries Lock Date` to the
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last day (inclusive) of the preceding fiscal year by going to :menuselection:`Accounting -->
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Accounting --> Lock Dates`. This way, the accountant can be confident that nobody changes the
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transactions while auditing the books. Users from the *accountant* access group can still create
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and modify entries.
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Current year's earnings
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~~~~~~~~~~~~~~~~~~~~~~~
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Odoo uses a unique account type called **current year's earnings** to display the amount difference
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between the **income** and **expenses** accounts.
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.. note::
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The chart of accounts can only contain one account of this type. By default, it is a 999999
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account named :guilabel:`Undistributed Profits/Losses`.
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To allocate the current year's earnings, create a miscellaneous entry to book them to any equity
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account. Once done, confirm whether or not the current year's earnings in the **balance sheet** is
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correctly reporting a balance of zero. If that is the case, set an :guilabel:`All Users Lock Date`
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to the last day of the fiscal year by going to :menuselection:`Accounting --> Accounting --> Lock
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Dates`.
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.. warning::
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Setting an :guilabel:`All Users Lock Date` is **irreversible** and cannot be removed.
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.. note::
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A specific year-end closing entry is **optional** in order to close out the **profit and loss
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statement**. The reports are created in real-time, meaning that the profit and loss statement
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corresponds directly with the year-end date specified in Odoo. Therefore, any time the **income
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statement** is generated, the beginning date corresponds with the beginning of the **fiscal
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year** and all account balances should equal zero.
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