Close Books

[Timothy Wight]

I have come to this discussion rather late, but would like to add my 
twopenny worth.

I close my books every year.  I have to do this because my accountant 
likes to see opening balances in my reports, in fact he insists upon it 
and gets quite shirty if they do not match his closing balances from the 
preceding year.

I create a closing balance account, eg: 
Equity:Closing_Balances:Close_2010 and use the built in 'Close' function 
to create closing transactions for Income and Expenses to the closing 
account.  (The resulting balance can now be posted as required to 
'Retained Earnings'.)  I then manually create similar transactions for 
all other Asset, Liability and Equity accounts.  In order to split this 
task I choose to make a separate split transaction for each account 
type.  (It would be great if a developer could extend the close option, 
perhaps as an option, to do this for me -- as it is a little tedious.)  
Because, of course, my accounts all balance, I end up with a zero 
balance in the close account and a zero Trial Balance.  I did not 
mention earlier that I also make a 'Snapshot' copy file of the year 
before closing in order that I can run reports on that year in future.

I now create an opening balance account, eg: 
Equity:Opening_Balances:Open_2011.  For each transaction in the above 
closing account I create a reversing transaction dated the following 
day, omitting the Income and Expense transactions, then cut and paste 
them to the opening account.  (This too is a tedious task which usefully 
could be automated as another optional extension of the close function.)

A look at any non income/expense register will now show a transaction 
closing to zero followed by an opening balance returning to the earlier 
amount.  As my financial year is April to March I do not have the luxury 
of using New Years Day, however I often post my 31st March transactions 
on the 30th in order to keep the 31st clear for closing entries.  
Reports for the new year show an opening balance for each account.

Hoping this is of some help.

Tim