Year-End Close

Year-end close is, mechanically, the same routine as any month-end close, just applied through the last day of the fiscal year rather than the last day of a month: reconcile every account, categorize whatever is left, review the year's profit and loss, and lock the period through that final date.

What year-end close is not, in BalanceMCP, is the ceremonial process some other accounting systems perform — actual journal entries that zero out every income and expense account and roll the net result into a permanent retained earnings balance. Retained Earnings here is already computed live, as all-time income minus all-time expenses, every time a balance sheet runs. Locking through December 31st doesn't change that calculation at all; it only prevents new entries from posting into the year that just ended.

This is worth being precise about because expectations carried over from other software can create confusion: there's no special year-end button, no separate closing procedure beyond locking, and no requirement to "roll forward" a balance manually. The books are simply locked through the final date once reconciliation and review are complete, the same as any other period.

Year-end is also, practically, when adjusting entries tend to cluster — depreciation for the year, any accruals that need recording before the books are considered final. None of that changes the mechanics of the lock itself; it's simply the moment those entries are most commonly posted, before locking makes the year permanent. What year-end close doesn't cover at all is actual tax filing — that's a separate process, with its own requirements, worth handling with an accountant regardless of how clean the books are.