Year end and annual financial statements

At year end you bring the books up to date, close the year, and produce the annual financial statements (AFS). Financials walks you through it on the Annual statements page. Closing a year and finalising the pack need Financials Admin or an Owner.

Lock dates

You don't have to wait for year end to protect a period. Under Settings → Financial years, each year has a Lock date. Nothing dated on or before it can be posted, edited or deleted. Set it once a period is reconciled, and clear it to open the period again.

Posted entries are never edited in place anyway. To correct one, reverse it from the Journal and post it again, or reclassify the bank line on its statement.

The year-end checklist

Pick the year in the header and open Annual statements. The Year-end checklist on the left lists what to do, with Open to go to the page for each step:

1. Review imported bank statements: every upload for the year reviewed.
2. Run depreciation to year end: on Assets → Depreciation runs, set the Period start and Period end, check the preview and post it.
3. Reconcile VAT: in South Africa, check and finalise each VAT201 period on VAT. Elsewhere, if you're VAT registered, agree the VAT balances on the trial balance to the returns you filed.
4. Complete the tax computation: South Africa only. Review add-backs and allowances on Tax, then post deferred tax.
5. Close the financial year: click Do it.
6. Finalise the AFS pack: click Do it once the year is closed.

The steps that only apply to South African companies don't appear for other countries.

Closing the year

Closing a year transfers income and expenses to retained earnings and locks the year, so nothing more can be posted into it. You can close it from the checklist or from Settings → Financial years with Close year.

• Years close in order. If an earlier year is still open, Financials asks you to close that one first.
• To undo a close, click Reopen on Settings → Financial years and give a reason. The reason is kept in the audit log. Years reopen newest first, and a year with a finalised AFS pack can't be reopened until the pack is unfinalised.

Compiling the AFS pack

The pack is one printable document with the statements your reporting framework includes, and the notes. Its cover title follows the framework: "Annual Financial Statements" under IFRS for SMEs and Full IFRS, "Financial Statements" under FRS 102, FRS 105 and US GAAP, and "Management Accounts" under Management accounts. See Getting set up for choosing the framework.

1. Check the Cover page card. The company name, registration and VAT numbers and Prepared by come from Settings → Company.
2. Tick Include directors' responsibility page if you want it.
3. Choose the assurance level under Assurance — stated on the cover: Audited, Independently reviewed, Independently compiled (not audited or reviewed) or Not audited or reviewed. In South Africa the Companies Act requires the first page to say which, and who prepared the statements, so Financials reminds you if it's not set.
4. Click Compile draft. After changes, click Save & recompile draft.

A compiled pack shows its version, the profit for the year and total assets, whether the balance sheet balances, and whether the cash flow reconciles. check classifications next to the cash flow means some accounts need a cash-flow section set in the chart of accounts. Any other warnings are listed underneath.

Preview the pack in the browser or click Download PDF. Amounts are shown in whole currency units.

Notes

The notes are on the Notes page in the Reporting group. A new financial year starts with the notes your framework calls for, such as accounting policies, property, plant and equipment, and taxation. The property, plant and equipment and tax notes fill themselves in from the asset register and the tax computation. Tables in the notes carry the year headings, such as FY2027 R and FY2026 R. Edit the wording as you need; changes save as you type, and the assistant can draft notes for you.

If you change framework, Refresh notes for framework on the Annual statements page brings the notes in line with it. Notes nobody has edited take the new framework's wording, notes it doesn't use are removed and missing ones are added. Notes you've edited are kept as they are.

Finalising

Finalising freezes the pack as a permanent snapshot, so the PDF won't change even if something is posted later. You can only finalise a closed year.

If you need to change a finalised pack, click Unfinalise. The finalised version is kept, and a new draft version is created for you to work on and finalise again.

Archived years

Older closed years can be kept in an archive file instead of the live books, which keeps a company with a long history fast. Settings → History lists them, with each year's dates, its source (archived or migrated), size and Verified totals. Reports and comparatives still cover archived years, and the account ledger reads their lines when a date range reaches them, which takes a few seconds the first time. Archived years are read-only. Only the Owner can download an archive.

Years whose archive was replaced by a newer one, or failed, are hidden behind Show superseded and failed.

Asking the assistant

The assistant can prepare most of this for you, such as running depreciation or drafting notes. Closing and reopening a year are left to a person; see The assistant.