Monthly and annual closing processes

What are monthly and annual closing processes?

The closing of an accounting period involves summarizing revenues and expenses for a specific period and transferring them to retained earnings. In ERPNext, this is done using a "Period Closing Voucher".

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Monthly closing process

Step 1: Create a period closing voucher

1. In the search bar期間締め伝票 type
2. Click "+ Add"

Step 2: Enter information

Item Name	Description	Required
Company	Target Company	✅
Transfer Date	Closing Date (End of Month)	✅
After the transaction date	Start date of the target period	✅
Transfer destination	Account for retained earnings	✅

Step 3: Submission

Clicking Submit will result in:

• The balances of profit and loss accounts (revenue and expenses) for the target period are calculated.
• A transfer journal entry is automatically created to transfer net profit/loss to the Balance Transfer Destination account.

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Accounting Period Lock

Once the monthly closing period is complete, you can lock the system to prevent incorrect journal entries from being made.

Step 1: Create an accounting period

1. In the search bar会計期間 type
2. Click "+ Add"

Step 2: Enter information

Item Name	Description
Period Name	Example: January 2026
Start date	2026-01-01
End Date	2026-01-31
Close	Checking this box will prohibit new journal entries for this period.

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Annual Financial Statements

Year-end closing procedures:

Step 1: Confirm completion of monthly closing

We will verify that all monthly closings for the past 12 months have been completed.

Step 2: Closing entries

Enter the following journal entries manually:

• Recording of depreciation expense
• Recording of provisions
• Adjustment of inventory difference (if necessary)

Step 3: Year-end closing vouchers

1. Create a new closing invoice for the period.
2. Start date: The first day of the fiscal year.
3. Date of entry: The last day of the fiscal year
4. Submission

Step 4: Closing the Fiscal Year

1. In the search bar会計年度 type
2. Open the previous fiscal year.
3. Check the "Close" box and save.

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Reviewing Financial Reports

After the closing process, you can check the results in the following report:

Report Name	Confirmation Details
Income Statement	Revenue, Expenses, and Profit for the Period
Balance Sheet	Assets, Liabilities, and Equity at the End of the Period
Trial Balance	List of Balances for Each Account
General Ledger	Transaction Details for Individual Accounts

You can check it by entering the report name in the search bar.

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Next Steps

We've learned all the procedures for the accounting section. Now let's move on to the manuals for other roles.

- System administrators → Adding users and setting permissions