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December 31st hits, and suddenly everyone’s asking about year-end close. What is it? Do you need it? How do you do it without messing up your books? Here’s the practical version.

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What Year-End Close Actually Is

Year-end close means finalizing your books for the fiscal year. You’re saying “these numbers are final” so you can:
  • Prepare accurate tax returns
  • Generate annual financial statements
  • Start the new year with clean opening balances
  • Prevent accidental changes to historical data
In accounting terms, you’re closing out temporary accounts (revenue, expenses) and rolling net income into retained earnings.

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When to Do It

For taxes: Close before your tax deadline. For most businesses, that’s March 15th (S-corps, partnerships) or April 15th (C-corps, sole props). For clean books: Ideally within 30-45 days of year-end. The longer you wait, the more likely you’ll find transactions that belong in the prior year.
Don’t close too early. Make sure you’ve accounted for all December transactions, invoices, and bills first. Banks can take a few days to post transactions from the last days of the year.

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Before You Close

Run through this checklist:
1

Reconcile all accounts

Every bank and credit card account should be reconciled through December 31st. No outstanding items that you can’t explain.
2

Review uncategorized transactions

Anything uncategorized won’t appear correctly in your P&L. Categorize everything.
3

Post adjusting entries

Depreciation, accrued expenses, prepaid allocations — if your accountant needs to make adjustments, now’s the time.
4

Review accounts receivable

Mark any truly uncollectible invoices as bad debt. You don’t want phantom income on your books.
5

Review accounts payable

Make sure all December bills are recorded, even if they weren’t paid until January.
6

Verify inventory (if applicable)

If you carry inventory, confirm your ending count matches your books.
7

Run preliminary reports

Generate P&L and Balance Sheet. Do the numbers look right? Any obvious errors?

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Closing the Year

Once everything’s reviewed:
  1. Go to Finance → Accounting → Year-End Close
  2. Select the fiscal year to close
  3. Review the pre-close summary
  4. Click Close Year
Pluvel will:
  • Calculate net income (revenue minus expenses)
  • Create a closing entry that moves net income to Retained Earnings
  • Lock the period so transactions can’t be added or modified
  • Set opening balances for the new year

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What Gets Locked

After closing:
Account TypeWhat Happens
RevenueBalances reset to zero, net amount moves to equity
ExpensesBalances reset to zero, net amount moves to equity
AssetsBalances carry forward
LiabilitiesBalances carry forward
EquityRetained earnings updated with prior year net income
You can still view historical transactions. You just can’t edit them.

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Reopening a Closed Year

Made a mistake? Need to post a late adjustment? You can reopen a closed year, but:
  • Only account owners can do this
  • You’ll need to re-close once corrections are made
  • It’s logged in your audit trail
Go to Finance → Accounting → Year-End Close, find the closed year, and click Reopen. Make your changes, then close again.
If you frequently need to reopen, you might be closing too early. Give yourself at least 45 days into the new year before closing.

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Working with Your Accountant

If you have an accountant (through Firm Mode or external):
  1. Share read access so they can review your books
  2. Let them post adjustments before you close
  3. Generate the reports they need (P&L, Balance Sheet, Trial Balance)
  4. Close after they approve — many accountants want to review before year-end is finalized
Most accountants make adjusting entries in February or March. Don’t rush to close on January 1st unless you’re sure everything is final.

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Multi-Year View

After a few years in Pluvel, you’ll have historical data. Go to Reports to see:
  • Year-over-year P&L comparison
  • Balance Sheet trends
  • Revenue growth over time
This historical context is one of the best reasons to do year-end close properly. Clean history = useful insights.

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Common Questions

Technically no. Pluvel doesn’t force you. But your accountant will want clean books for taxes, and you’ll want accurate retained earnings on your Balance Sheet. We strongly recommend it.
Check for uncategorized transactions, missing invoices, or bills that weren’t recorded. The P&L should match what you expect. If it’s wildly off, investigate before closing.
Pluvel supports any fiscal year end. Go to Settings → Company → Fiscal Year to set yours. The close process is the same, just at a different date.
Yes. Close them in order (you can’t close 2024 before closing 2023). Each year’s net income rolls into retained earnings for the next.

Financial reports

Generate the reports you need before closing.