Closing the books

Closing the books is the routine at the end of a month or year that makes the accounts complete and final for that period. It means entering everything, reconciling bank and card accounts, posting adjusting entries, reviewing reports, and then locking the period so nobody changes it by accident after the figures are used.

Glossary / Closing the books · Also called month-end close, year-end close, period close

How it works

A monthly close keeps small problems small: a missing deposit found in February is easy to fix, one found next January is not. A typical month-end covers entering bills and receipts, reconciling every bank and card account, checking receivables and payables, and recording depreciation or accruals.

The year-end close adds a few steps: counting inventory, confirming loan balances, preparing payroll slips, and moving the year's profit into retained earnings. After the accountant's review, a closing date protects the period. Changes after that should be deliberate and recorded.

Worked example: A month-end in five steps

On July 3 a bookkeeper closes June: enters the last 6 bills, imports and matches the June bank statement, reconciles to a $0.00 difference, posts $600 of depreciation, and reviews the A/R aging.

With June reviewed, the closing date is set to June 30. A July user who tries to change a June invoice is stopped unless they know the closing-date password.

In AcboBooks

Company settings hold a closing date with its own password; edits in a closed period need it, and closed-period overrides appear in the Audit Trail. Year-End Close posts closing entries that move the year's income and expenses into Retained Earnings, and it can be reversed.

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Updated October 25, 2026. General information, not tax, legal or accounting advice. Rules and rates change; check with the IRS, the CRA, your state or province, or your accountant.

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