> ## Documentation Index
> Fetch the complete documentation index at: https://docs.pluvel.com/llms.txt
> Use this file to discover all available pages before exploring further.

# Year-End Close

> Close your books for the year and prepare for taxes and reporting.

December 31st hits, and suddenly everyone's asking about year-end close. What is it? Do you need it? How do you do it without messing up your books?

Here's the practical version.

## What Year-End Close Actually Is

Year-end close means finalizing your books for the fiscal year. You're saying "these numbers are final" so you can:

* Prepare accurate tax returns
* Generate annual financial statements
* Start the new year with clean opening balances
* Prevent accidental changes to historical data

In accounting terms, you're closing out temporary accounts (revenue, expenses) and rolling net income into retained earnings.

## When to Do It

**For taxes:** Close before your tax deadline. For most businesses, that's March 15th (S-corps, partnerships) or April 15th (C-corps, sole props).

**For clean books:** Ideally within 30-45 days of year-end. The longer you wait, the more likely you'll find transactions that belong in the prior year.

<Warning>
  Don't close too early. Make sure you've accounted for all December transactions, invoices, and bills first. Banks can take a few days to post transactions from the last days of the year.
</Warning>

## Before You Close

Run through this checklist:

<Steps>
  <Step title="Reconcile all accounts">
    Every bank and credit card account should be reconciled through December 31st. No outstanding items that you can't explain.
  </Step>

  <Step title="Review uncategorized transactions">
    Anything uncategorized won't appear correctly in your P\&L. Categorize everything.
  </Step>

  <Step title="Post adjusting entries">
    Depreciation, accrued expenses, prepaid allocations — if your accountant needs to make adjustments, now's the time.
  </Step>

  <Step title="Review accounts receivable">
    Mark any truly uncollectible invoices as bad debt. You don't want phantom income on your books.
  </Step>

  <Step title="Review accounts payable">
    Make sure all December bills are recorded, even if they weren't paid until January.
  </Step>

  <Step title="Verify inventory (if applicable)">
    If you carry inventory, confirm your ending count matches your books.
  </Step>

  <Step title="Run preliminary reports">
    Generate P\&L and Balance Sheet. Do the numbers look right? Any obvious errors?
  </Step>
</Steps>

## Closing the Year

Once everything's reviewed:

1. Go to **Finance → Accounting → Year-End Close**
2. Select the fiscal year to close
3. Review the pre-close summary
4. Click **Close Year**

Pluvel will:

* Calculate net income (revenue minus expenses)
* Create a closing entry that moves net income to Retained Earnings
* Lock the period so transactions can't be added or modified
* Set opening balances for the new year

## What Gets Locked

After closing:

| Account Type | What Happens                                         |
| ------------ | ---------------------------------------------------- |
| Revenue      | Balances reset to zero, net amount moves to equity   |
| Expenses     | Balances reset to zero, net amount moves to equity   |
| Assets       | Balances carry forward                               |
| Liabilities  | Balances carry forward                               |
| Equity       | Retained earnings updated with prior year net income |

You can still view historical transactions. You just can't edit them.

## Reopening a Closed Year

Made a mistake? Need to post a late adjustment?

You can reopen a closed year, but:

* Only account owners can do this
* You'll need to re-close once corrections are made
* It's logged in your audit trail

Go to **Finance → Accounting → Year-End Close**, find the closed year, and click **Reopen**. Make your changes, then close again.

<Info>
  If you frequently need to reopen, you might be closing too early. Give yourself at least 45 days into the new year before closing.
</Info>

## Working with Your Accountant

If you have an accountant (through Firm Mode or external):

1. **Share read access** so they can review your books
2. **Let them post adjustments** before you close
3. **Generate the reports** they need (P\&L, Balance Sheet, Trial Balance)
4. **Close after they approve** — many accountants want to review before year-end is finalized

Most accountants make adjusting entries in February or March. Don't rush to close on January 1st unless you're sure everything is final.

## Multi-Year View

After a few years in Pluvel, you'll have historical data. Go to **Reports** to see:

* Year-over-year P\&L comparison
* Balance Sheet trends
* Revenue growth over time

This historical context is one of the best reasons to do year-end close properly. Clean history = useful insights.

## Common Questions

<AccordionGroup>
  <Accordion title="Do I have to close the year?">
    Technically no. Pluvel doesn't force you. But your accountant will want clean books for taxes, and you'll want accurate retained earnings on your Balance Sheet. We strongly recommend it.
  </Accordion>

  <Accordion title="My net income looks wrong">
    Check for uncategorized transactions, missing invoices, or bills that weren't recorded. The P\&L should match what you expect. If it's wildly off, investigate before closing.
  </Accordion>

  <Accordion title="What if I have a non-calendar fiscal year?">
    Pluvel supports any fiscal year end. Go to Settings → Company → Fiscal Year to set yours. The close process is the same, just at a different date.
  </Accordion>

  <Accordion title="Can I close previous years I never closed?">
    Yes. Close them in order (you can't close 2024 before closing 2023). Each year's net income rolls into retained earnings for the next.
  </Accordion>
</AccordionGroup>

<Card title="Financial reports" icon="file-chart-line" href="/features/reports/profit-loss">
  Generate the reports you need before closing.
</Card>