Year-End Close

Overview

The Year-End Close is a guided workflow that finalizes a fiscal year's books. Once a year is closed:

• Net income (or net loss) for the year is rolled into your equity / net assets account.
• Income and expense accounts are zeroed out for the new year (they are period accounts, not running balances).
• The closed period is locked from accidental edits, the same way a completed reconciliation locks its period.

Closing the books is not strictly required to keep operating -- TimelyChurch will continue to track transactions across years either way -- but it is a best practice for any church with a finance committee, an annual audit, or board-approved financial statements.

When to Close the Year

Most churches close the books after the last reconciliation of the fiscal year is complete and any final accruals or adjustments have been entered. For a calendar-year fiscal year (the most common), this typically happens in late January or February of the following year, after the December bank statement has been reconciled.

Closing too early means you may need to reopen the year to record a late entry. Closing too late delays your audit-ready financial statements.

Where to Find It

Go to Finances > Accounting and look for Year-End Close in the Accounting menu, or visit the route accounting/year-end-close directly from the URL.

The Year-End Close page shows the year being closed, a prerequisites checklist, and a summary of what will happen when you confirm.

Prerequisites Checklist

Before you can run the close, every item on this list must be satisfied. The page checks these automatically and blocks the close button until each is green.

• All bank accounts are reconciled through the last day of the fiscal year. Every Asset-type account that is a bank account must have a completed reconciliation whose statement date is on or after December 31 (or your fiscal year-end equivalent).
• No open deposit batches. Every deposit batch in the year must be finalized (posted). Open batches still in draft will block the close.
• No unpaid bills with a due date in the closing year. Either pay them, void them, or push them into the next year before closing.
• No transactions in pending status from a bank import. Drain the import review queue first -- accept or exclude every pending row.

If any item fails, the page lists exactly which records are blocking and links you to the right page to resolve them.

What the Close Does

When you confirm the close:

1. The system calculates net income for the year as Total Income minus Total Expenses.
2. That net income is posted as a closing entry that increases (or decreases, if a loss) your Unrestricted Net Assets equity account.
3. Income and expense accounts are reset for the new year. Their per-year activity remains visible in historical reports; only the running balance restarts.
4. A Year-End Close record is saved to your accounting history with the closing date, the user who ran it, and the calculated net income.
5. Every transaction in the closed year is locked from edits and deletions. To change a closed-period transaction, the year must first be reopened by an admin.

Treasurer Workflow

The typical end-of-year process for a church treasurer using TimelyChurch:

1. December 31 -- Stop entering new transactions for the closing year. Continue normally for the new year.
2. Early January -- Wait for the December bank statement; reconcile December.
3. Mid January -- Record any final accruals, in-kind contributions, or adjusting entries that belong in the closing year.
4. Late January -- Run preliminary reports (Balance Sheet, Income Statement, Treasurer's Report) for the closing year. Share with the finance committee.
5. After committee review -- Make any final corrections, then run the Year-End Close workflow.
6. Post-close -- Generate final reports for the closed year. These will now show the equity rollover. Distribute to the board, file with annual records, and (if applicable) hand to the auditor.

Reopening a Closed Year

In rare cases (audit adjustments, late-discovered errors), an admin may need to reopen a closed year. This is a privileged action -- it unlocks every transaction in that year and reverses the closing entry. After reopening, make corrections, then re-run the close.

Reopening a year also affects all subsequent closes, since the closing entry feeds into the next year's opening equity balance. Use sparingly and document why.

Best Practices

Don't close until the audit is final. If your church is audited, finish the audit's adjusting entries before running the close. This avoids a reopen.

Print or PDF the final reports right after closing. The Balance Sheet, Income Statement, and Treasurer's Report for the closed year are the church's official annual financials. Save them to your records, not just to the system.

Coordinate with payroll. Year-end payroll filings (W-2s, 1099s) have their own deadlines. The accounting close is independent, but make sure your 1099 vendor data is accurate before closing -- corrections after closing require a reopen.