Why Close Fiscal Years?

Closing a fiscal year in Financial Edge NXT finalizes all posted activity for that year, permanently moves revenue and expense balances into the appropriate net asset accounts by fund, and locks the year to prevent additional transactions from posting.

Tip: To temporarily lock posting, pre-close the fiscal year. To permanently lock and prevent more postings, hard-close the fiscal year. For more details, see Pre-close or hard close.

Why is closing fiscal years important?

Closing a fiscal year helps make sure your Statement of Activities and Statement of Financial Position accurately reflect final results, providing a complete financial snapshot.

The closing process requires all funds to balance and applies each fund’s designated closing method, making sure restricted and unrestricted net assets are accurately reported.

A closed year protects data quality by preventing accidental postings after reports are complete. To test the process before finalizing, pre-close the year.

Finalizing prior years supports consistent budgeting, forecasting, and year-over-year analysis.

After a couple of years, you can optimize closed years to improve reporting speed without affecting financial outcomes.