Year-End Close — Controller Guide
Year-end close is the once-a-year step that sits on top of your normal month-end. After you close the final month of the fiscal year, the year's profit (or loss) gets rolled out of your income statement and into equity, so the new year's revenue and expense accounts start fresh at zero. This guide explains that roll, then walks the exact clicks — which are the same clicks as any month-end close, run on your December period, so most of the mechanics live in the month-close guide and this one focuses on what's different. It assumes you run a business but aren't a career government accountant.
There is no separate "Year-End" screen. You run year-end from the same page as every month: Accounting → General Ledger → Period Close (/accounting/close). Year-end is simply the December period-close run, plus the equity roll described in Part 1.
For: controllers · Time: ~15 minutes on top of your normal December close · You'll need: the Accounting module and permission to close periods.
Part 1 — The ideas you need first (read once)
Why the year "closes" differently from a month
Your income-statement accounts (revenue, expenses) are temporary — they measure one year, then start over at zero. Balance-sheet accounts (assets, liabilities, equity) are permanent — they carry forward. A normal month-end freezes the month but leaves those temporary accounts running. Year-end is the one time you bring every revenue and expense account to zero and move the year's net result — your net income or loss — into retained earnings (equity). That single move is the year-end close.
The roll, conceptually
Net income for the year = revenue − expenses. Closing it means:
- If you had a profit, the income accounts (a net credit) are cleared and that amount is added to retained earnings.
- If you had a loss, it is subtracted from retained earnings.
Conceptually the roll runs through an income-summary account (a temporary holding account): the P&L accounts close into income summary, and income summary closes into retained earnings. The result is an income statement that reads zero on day one of the new fiscal year, with last year's result now living in equity.
In Arcvue the roll is computed, not posted
Arcvue does not post a closing entry. Retained earnings is derived from the posted entries every time the balance sheet is drawn. It appears on two lines:
- Retained Earnings — Cumulative Prior Years is the net result of every earlier year.
- Retained Earnings — Year to Date is this year's result so far.
When the new year begins, last year's result moves from the second line to the first on its own, and the income statement's year to date starts again at zero. There is nothing to run for the roll itself. What year-end asks of you is a complete, closed December, because that is the number that moves.
Years kept in a previous system. For a year whose books came from a previous system, that system posted its own year-end entry to equity, and the imported ledger carries it single-sided. Arcvue detects that entry in the imported ledger and adds the matching offset to income summary itself, so the imported year still balances. No person approves that offset: its amount is fully determined by the imported entry it mirrors. This applies only to years before your books began in Arcvue.
The year-end roll has no dedicated button on the Period Close page, because there is nothing to trigger. The clicks in Part 2 are the standard close checklist run on December, then a check that the new year opened clean.
What Arcvue deliberately will not do
- It won't let you roll the year until the final month is genuinely closed — year-end sits on top of a completed December month-end, and Arcvue enforces sequential close, so December will not close until every prior month is closed.
- It won't guess your income-summary or retained-earnings accounts — they're resolved from your chart, never invented.
Part 2 — How to run it (once a year)
Year-end is a normal December close done deliberately. The mechanics of the checklist, the accrual and revenue-recognition panels, and the close button are covered click-by-click in Close a Month (Period Close) — this section calls out the December-specific differences and cross-links the rest rather than repeating it.
Step 1 — Open Period Close on December
In the left nav, go to Accounting → General Ledger → Period Close (/accounting/close). The page header reads Period Close — "Run the checklist, fix what's flagged, close the books with one click."
The left column is a 12-month timeline of period pills, each showing its status: open, closed, or locked. Arcvue pre-selects the oldest open month, because months must close in calendar order. For year-end you want December — click the Dec YYYY pill on the left. If earlier months are still open, close those first (see Step 2); December's own pill won't be workable until they are.
Step 2 — Clear the sequential-close gate
In the right column, work the checklist exactly as you would any month — it's grouped into Transactions, Payroll, Bank Accounts, and Compliance, with a Fix now / Review button on each failing row. At year-end the row that matters most is the Prior months closed in order hard gate under Transactions: if any month from January through November is still open, this shows red with a Close <Month> first button that jumps you to the oldest open month. December cannot be right on top of an unfinished year, so clear this gate — and every other red ✕ hard gate — before going further. (Full per-check table: see the month-close guide.)
Step 3 — Post December accruals and recognize December revenue
Before you look at the year's result, finish December's own period-end entries so the full-year number is complete:
- In the Month-end accruals panel, click Preview accruals, then Create draft entries. Each auto-reverses on the first day of January. Review and post them from Journal Entries. Two types are proposed: Accrued accounts payable, and Subcontractor labor for approved Subcontractor Portal hours not yet invoiced. Payroll accrual, unbilled receivables and prepaid amortization always land under Not proposed with a stated reason, so one or two drafts in December is expected rather than a sign that something was missed. (Prepaid amortization posts on its own from the Prepaid Register,
/accounting/prepaid.) - In the Revenue recognition (ASC 606) panel, review December per contract: the Method and Basis beside each amount, On the books beside Derived now, and any row marked Will restate, Cannot be grounded or No method elected. The recognition run posts on its own; what you do here is review, and elect a method on the contract page where one is owed, before the year rolls.
These are the same panels you use every month; the point at year-end is to run them for December so nothing that belongs in the year is missing from the number you're about to roll.
Step 4 — Review the full-year result before you close
Confirm the full-year income statement — total revenue, total expenses, and the net income/loss that's about to land in equity. This is the single number that rolls into retained earnings, so give it a deliberate look. Because the Period Close page shows only December's checklist (not a full-year statement), review the year's totals on Accounting → General Ledger → Books (P&L for the fiscal year) alongside this page. Confirm the December accruals and revenue drafts from Step 3 are posted so the year total is final.
Step 5 — Check the new year opened clean
There is no button for the roll — you're checking, not triggering. Once December is closed and January has begun, open Accounting → General Ledger → Books:
- On the P&L, switch the scope to Year to date for January. It starts from January's activity alone.
- On the Balance Sheet for January, Retained Earnings — Cumulative Prior Years has grown by last year's net result, and Retained Earnings — Year to Date carries only January's.
For a year that came from a previous system, also confirm that system's year-end entry and Arcvue's matching offset both appear in that year.
Step 6 — Close December
When every hard gate is green, the header reads "All checks green — ready to close" and the sticky bar at the bottom shows ● All hard gates passed. Optionally type a Close note for the audit log (a good place to note "fiscal year-end close"), then click the teal Close December YYYY button. It's teal and clickable only when the books are ready; gray and disabled otherwise.
On success a checkmark celebration appears — "December YYYY closed" — and, if allocation ran, "Final allocation $… across N pools." December's pill flips to closed ✓, and the checklist is replaced by a sealed-period screen ("December YYYY is closed" / "The books for this period are sealed."), which also records what the checklist found at the moment of the close. Closing freezes the month in one all-or-nothing step. For a month before your books began in Arcvue it also runs the final actual-cost indirect allocation; from your first Arcvue month the allocation run already posts it, so the close does not run it again.
Once closed, the period is sealed. Reopening December requires an admin role and a recorded reason, entered through the Reopen period… form on the closed-period screen (the same reopen flow as any month).
Part 3 — When something looks wrong
| Symptom | What it means | Fix |
|---|---|---|
| The Close December button is gray and won't click | A hard gate is still failing; the sticky bar reads ● Hard gates failing — fix above to enable close. | Resolve every red ✕ row in the checklist. The bar turns teal when all hard gates pass. |
| "Prior months closed in order" is red | An earlier month in the fiscal year is still open — you can't close December on top of an unfinished year. | Click Close <Month> first; Arcvue jumps you to the oldest open month. Close each in order, then return to December. |
| Cumulative Prior Years didn't move by the net income you expected | Both retained-earnings lines are computed from posted entries, so the usual cause is an entry that reached the closed year after the close (through a reopen), or an account whose type puts it on the wrong statement. | Compare the year's P&L on Books with the movement; find the late entry on the General Ledger tab, or fix the account's type in Chart of Accounts. |
| The new year's P&L doesn't start at zero | Something was posted to January that belongs to December, or the scope is still on the month. | Check the scope switch, then read January's entries on the General Ledger tab. |
| An imported year doesn't balance at year-end | Arcvue adds its offset only when it can recognize the previous system's year-end entry in the imported ledger: an equity entry within a week of year-end, single-sided, described as a closing entry. An unusual account or memo is not recognized. | Confirm the previous system's year-end entry is present in the imported ledger and dated in the year being closed, and ask your implementation contact to look at it if Arcvue did not pick it up. |
| I closed December by mistake | The period is sealed but reopenable. | A closed month shows Reopen period… (admin role, recorded reason). Reopen sparingly — anything downstream that used the closed numbers may need regenerating. A locked period cannot be reopened. |
One-line summary
Year-end is the December period close (Accounting → General Ledger → Period Close) run deliberately: clear the sequential-close gate, post December accruals and revenue, verify the full-year result on Books, then click Close December YYYY. There is no closing entry to post: the balance sheet computes retained earnings from posted entries, so the year's result moves into Cumulative Prior Years and the new year's P&L starts at zero on their own. For a year kept in a previous system, Arcvue offsets that system's imported year-end entry itself. Fix mistakes by reopening, never by editing a closed period.
Related
- The full close mechanics, checklist table, and panels → Close a Month (Period Close)
- Review the full-year statements → Books (
/accounting/books) - Work the coding queue → Transaction Review (
/accounting/review) - File the annual incurred-cost submission → ICS (
/accounting/ics/<year>, Schedules A–O)
Also on the Period Close page
The Accruals awaiting a bill panel (see Close a Month, Step 3) carries the decisions on an accrued payable whose bill never came: Link this bill, Re-accrue — with the fields Accrue into, Expense account and Amount — and Close — never coming, which requires the note Why the bill is not coming.