Year end and the close

At the end of a financial year a bookkeeper expects a second ritual: a year-end close on top of the monthly one, closing entries that sweep the profit and loss into equity, and a fresh set of books for January. SKU.io asks for less. You close December like any other month, and then you lock the year with the hard close date.

Closing December doesn't freeze the year

The Close tab closes calendar months. December has the same checklist, the same report pack and the same Start close and Close period buttons as June. Closing it signs the month off, but like every close it's a soft close: a late bill dated in December can still land there, and December then reads Closed – restated until you re-sign it off.

To freeze the year, move the hard close date to the last day of the year once December is closed and signed off. You can do that in either of two ways:

• When you close December, tick Also lock through this month in the close dialog and give a reason. The hard close date moves to December 31 once the close finishes. See Close a month.
• Later, after your accountant has reviewed the year, click Move hard close date… on the Hard close date card and lock through December 31. See Move the hard close date.

Either way, every month the move covers must be closed and signed off, and none can be waiting for a re-sign-off (or, with Accounting → Period Override, you can lock never-closed months anyway: see Move the hard close date). When the move finishes, the months read Hard-locked, nothing more can post into the year, and the Year board marker reads Books locked through Dec 31, 2026. Then set the same lock date in Xero or QuickBooks, because SKU.io can't write it. See Keep your provider's lock aligned.

What a year looks like on the Close tab

The Year board shows one year at a time as twelve month tiles, with arrows beside the year to step back and forward. There's no year row to select and no year-end checklist. At a glance:

• Each closed month shows its net income, for example Net income $1,428.
• A month that changed since sign-off shows Change since sign-off and the amount, and needs a re-sign-off.
• A month whose balances moved only because an earlier month changed shows Balance moved and the amount carried in. It needs nothing from you.
• Months on or before the hard close date read Hard-locked.

Some tasks happen more often near year end: re-sign off a month that changed after your accountant's review, and lower the hard close date if they ask for a correction after you locked the year. See Re-sign-off a restated month and Lower or clear the hard close date.

SKU.io posts no closing entries

• No closing journal. SKU.io doesn't post a journal that empties your income and expense accounts into equity at the year boundary, so your books don't restart at zero on January 1.
• No roll-forward step. Nothing has to be carried into the new year by hand. January opens as an ordinary month as soon as it starts.

Where Retained Earnings comes from

Because there are no closing entries, the profit you have made reaches the balance sheet as a computed line.

Open the Balance Sheet report in a month's report pack. The last line under equity reads Retained Earnings, with a dash where every other row shows an account code:

Code	Name	Type	Section	Balance
2200	Sales Tax	Currliab	liabilities	1,558.33
—	Retained Earnings	Equity	equity	295,129.51

The dash is the point: Retained Earnings isn't an account in your chart of accounts. It has no code, nothing posts to it, and no ledger entry sits behind it. See the chart of accounts reference for the accounts that do exist. It's the running total of everything on your income statement, revenue minus expenses, from the start of your books to the last day of the month you're looking at, added to equity so that assets equal liabilities plus equity.

Two consequences matter at year end:

• It's cumulative, not annual. The figure doesn't reset in January. December's balance sheet and January's both carry every year of trading you've recorded.
• It moves whenever an income-statement figure moves. A late entry dated in an earlier month changes it, even when that month is closed. That change shows as a restatement: the month reads Closed – restated, and every later month's balance sheet moves with it. Only months on or before the hard close date are protected. This is one more reason to lock the year once it's final. See When a closed month changes.

What the year's numbers look like

The report pack is built one month at a time, and each report is scoped to it:

• Income Statement and COGS cover the month's date range, for example Dec 1, 2026 – Dec 31, 2026. There's no year-to-date column.
• Balance Sheet, Inventory Valuation and GINR Balance are stated as at the last day of the month, so they already carry the whole year and every year before it.
• Trial Balance does both. Its columns are Opening Balance, Period Debits, Period Credits and Closing Balance: the two middle columns are the month's movement, and the outer two are balances as at the month's first and last day.

So the annual picture comes from two places. The Balance Sheet at December is your year-end position. For the year's trading, go to Accounting → Reports → Income Statement and set the Start Date and End Date across the year. See Read your financial statements. The close itself doesn't produce an annual statement.

If your financial year isn't the calendar year

Months in the close are always calendar months. A business whose year ends on June 30 or March 31 closes the same twelve months as everyone else, and the financial year boundary falls between two of them.

• Tell SKU.io when your year ends. In Accounting → Settings → Close, under Reconciliation policy, set Financial year ends to match your accounting provider. SKU.io uses it when it compares your income and expense accounts with your provider's: those accounts are compared year to date, starting the month after your year end. See Close settings and custom checklist items.
• Lock your financial year end, not December. For a June year end, close June like any other month, then move the hard close date to June 30.
• Mark it for the people who read it later. The Close notes (optional) box in the close dialog is the place. A note such as Financial year end, statutory figures signed off with the accountant stays with the month and prints on the cover sheet of the exported pack.
• Make it repeatable with a custom checklist item. Your business can add its own items to the checklist. One named for your year-end work gives the twelfth close a step the other eleven don't have, and records who did it. See Close settings and custom checklist items.
• Expect the pack's reports to ignore the boundary. Retained Earnings is cumulative from the start of your books, and the pack's income statement covers one month. For figures across your financial year, use Accounting → Reports with the dates you choose, or your accounting provider.

A suggested rhythm

When	What to do
Every month	Close the month and sign it off. Re-sign off any earlier month that reads Closed – restated.
Quarter end	Once the quarter's months are closed and signed off, move the hard close date to the quarter end. Set the same lock in Xero or QuickBooks.
Year end	Close the last month of your financial year, then lock through it, by ticking Also lock through this month or after your accountant's review. Set the same lock in your provider.

Next steps

• Close a month: the December close, and every other one.
• Move the hard close date: lock the year.
• Keep your provider's lock aligned: match the lock in Xero or QuickBooks.
• Read the month's reports: what each report in the pack covers.
• Month boundaries and timezones: why a month is a calendar month.