Step-by-step guide
Year-end close and prior-period adjustments
Close completed financial years, lock audited periods, and post current-year correction journals when prior-period issues are discovered later.
How to do this in CashyNest
Use Year-End Close for completed financial years, and use Prior Period Adjustment journals for post-audit corrections that should not reopen locked history.
Review year-end close status
Menu path: Sidebar > Settings > Year-End Close
Route:/:organizationId/settings/year-end
- Review current financial year, locked-through date, and next closable year.
- Check income, expense, net result, and closing line count before closing.
- Confirm the financial year has completed and management reports are signed off.
Expected result: The owner can see exactly what year will close and what retained earnings impact will be posted.
Close or reopen a financial year
Menu path: Sidebar > Settings > Year-End Close
Route:/:organizationId/settings/year-end
- Click Close for the next completed unlocked year after review.
- If a correction is needed before audit sign-off, reopen the latest closed year.
- After correcting the reopened period, close it again so the system journal is recalculated.
Expected result: CashyNest posts or replaces the system close journal and updates the books lock date.
Post prior-period adjustment
Menu path: Sidebar > Settings > Year-End Close > Prior Period Adjustment
Route:/:organizationId/settings/year-end/prior-period-adjustment
- Use the suggested current-year adjustment date.
- Add a reference and narration from the audit or accountant instruction.
- Create balanced debit and credit lines across all affected accounts.
- Post the adjustment and review it in Journal Entries filtered by prior-period adjustment.
Expected result: The correction is visible in the current year without silently changing audited prior-year history.
Outcome to achieve
- Close income and expense accounts into retained earnings with a system-generated journal.
- Lock the completed financial year so reports cannot be changed accidentally after sign-off.
- Handle post-audit corrections through documented current-year prior-period adjustment journals.
Step-by-step setup
Review before closing
Only close a financial year after the operational close, reconciliations, and management review are complete.
- Run Trial Balance, Profit & Loss, Balance Sheet, and General Ledger for the full year.
- Confirm draft/submitted documents are finalized or explicitly excluded.
- Verify approval flows, support exceptions, and manual journals are resolved.
Close the financial year
Use Settings > Year-End Close to close the next eligible completed year.
- Review total income, total expense, net result, and closing line count.
- Click Close only after the period and retained earnings impact are verified.
- CashyNest posts the system journal and locks books through the year-end date.
Reopen only for approved corrections
If the closed year must be changed before audit sign-off, reopen the latest closed year, correct it, and close again.
- Document why the year is being reopened.
- Make the required corrections in the reopened period.
- Close the year again so CashyNest removes the old close journal and creates the updated one.
Post prior-period adjustments after audit
When the year is already audited or should remain locked, post the correction in the current open year.
- Use Prior Period Adjustment from the Year-End page.
- Enter a balanced multi-line journal with reference, narration, debit lines, and credit lines.
- Use the suggested current-year adjustment date unless your accountant specifies another date.
Best practices
- Close only the latest completed year and keep reopen rights restricted to owners.
- Use prior-period adjustments for post-audit corrections instead of silently editing locked history.
- Retain the source audit note, board approval, or accountant instruction for each adjustment.
Common mistakes to avoid
- Closing a year before bank, receivables, payables, and tax balances are reconciled.
- Editing audited prior-year transactions for immaterial corrections.
- Posting an imbalanced or poorly narrated prior-period adjustment journal.
Reports to watch
- Profit & Loss: validate income and expense totals before close.
- Balance Sheet: validate retained earnings and carried-forward balances after close.
- Journal Entries: review system close journals and prior-period adjustment journals.