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Closing the fiscal year is the moment when you verify that the accounting is complete, consistent, and ready for the next year. Once completed, ideally no further changes should be made. However, it may happen that missing transactions, errors, or unrecorded exchange rate differences are identified.
This page explains when it is necessary to make changes after closing and which tools Banana Accounting offers to do so correctly.
When it is necessary to intervene after closing
The most common situations are:
- Exchange rate differences not recorded in multi-currency accounting.
- Missing transactions entered late.
- Posting errors identified afterwards.
In any case, it is important to document the reason for the intervention and ensure that the changes comply with the fiscal and legal framework.
Adjustments in the following year (recommended procedure)
If you have already reviewed the accounting or submitted the tax return, you should not make changes to a closed year.
In this case, we recommend that you:
- Record the adjustment in the new year.
- Clearly describe the issue in the entry or in an attached document.
- Check the tax impact with your accountant.
Multi-currency case
For unrecorded exchange rate differences in a closed year:
- record the difference in a transition account (e.g. Prior year exchange adjustment)
- create an opening entry to reset the account
- allocate the change to the exchange gain/loss account
This procedure allows you to keep balances correct without retroactively modifying the closed year.
Changes to a closed year
If you have not yet reviewed or submitted the tax return, you can still make corrections directly in the file of the closed year. In this case:
- Proceed with caution, limiting yourself only to essential changes.
- Run the Check accounting command again to verify that the entries are correct and balanced.
- Save and reclose the year.
- Open the new year and run the Update opening balances command to realign the balances.
Useful Banana tools to manage adjustments
Create exchange rate difference entries
Allows you to automatically generate transactions for exchange rate differences as of the closing date, using the rates in the Exchange rates table. This is especially useful if the year has not been definitively closed.
Update opening balances
This command, available from the Actions > Update opening balances menu, transfers the final balances of the previous year into the new fiscal year. Use it whenever you make changes to the closed year or to the chart of accounts, to ensure consistency between years.
Check accounting
This command, available from the Actions > Check accounting menu, performs a complete check of imbalances, posting errors, or inconsistent entries. It is recommended after each change, both in the previous year and in the new one.
Common errors and how to fix them
- Opening balances of the Income Statement reported by mistake
Delete the amounts from the Opening column and run Update opening balances. - Profit or loss for the year not reported correctly
Correct the entry in the previous year and then update the opening balances in the new year. - Imbalances after changes to the previous year
Use Update opening balances and run Check accounting again.
Best practices
- Always run the checks and record all exchange rate differences before creating the new year.
- In case of changes after closing, always document the reasons for the intervention.
- Before making changes to a closed year, consider the legal and tax implications with a professional.
- After each adjustment, use the Update opening balances and Check accounting commands to ensure data consistency.