--- title: "Year-End Close" slug: "year-end-close" description: "Year-end checklist covering fiscal year setup, GL detail, 1099 prep, budgets, and retained earnings in R365." updated: 2025-08-26T17:00:03Z published: 2025-08-26T17:00:03Z canonical: "docs.restaurant365.com/year-end-close" --- > ## Documentation Index > Fetch the complete documentation index at: https://docs.restaurant365.com/llms.txt > Use this file to discover all available pages before exploring further. # Year-End Close ## Year-End Checklist For a smooth transition into the new year, review the following checklist to make sure that all tasks are completed before the current year’s end. | **✔** | Task | Details | | --- | --- | --- | | | Fiscal Year | - Set up next year's [Fiscal Years](/doc/docs/fiscal-years) for all active legal entities. - Make sure there's no gap or overlap between your current year end date and your next year start date for both the fiscal and operational calendars. - Note, any changes to the operational calendar after the start of the new operational year will only be effective going forward. To reflect changes retroactively, re-poll the DSS for any affected locations. | | | GL Detail | - Update the Rent GL account in R365 from being a Non-Controllable Expense to a Current Liability to follow the new [**ASC 842 Federal Accounting Mandate**](/doc/docs/asc-842-federal-accounting-mandate). Follow [this process](https://help.restaurant365.net/en/support/solutions/articles/12000083511) to update the account. - When you need to run a GL Detail report for audit purposes, try the [GL Account Detail Export](/doc/docs/gl-account-detail-export) or the [GL Account Detail with legal entity Export](/doc/docs/gl-account-detail-with-legal-entity-export). - Note, these Reports are optimized for larger data sets. Due to the large data sets these reports use, running the report can take up to 15 minutes, depending on selected parameters. | | | 1099 | - Run the [1099 Review](/doc/docs/1099-review) to make sure that all 1099-eligible vendors are configured properly. - Update [Vendor records](/doc/docs/vendor-record) as needed, based on your findings. If a 1099 vendor has a 1099 Type set as 'Company' when it should be set as 'Individual', follow the [Updating 1099 Vendor Type](/doc/docs/updating-1099-vendor-type) training article to make corrections. - Note, when you make a vendor 1099-eligible, you have the option to update all invoices for that vendor automatically. Learn more about [1099 setup and management](/doc/docs/1099-setup-and-management). | | | Budgets | - Check that at least one of your current year [budgets](/doc/docs/budgets) is designated as a [reporting budget](/doc/docs/budget-parameters). - Make sure your budget is based on the correct calendar for your organization's needs (fiscal or operational). | | | Retained Earnings | - We've got you covered! R365 makes a dynamic YE Close posting to move your balance from the P&L to Retained Earnings. | | | Closing Periods | - Once you have wrapped up the current year, don't forget to [close all open periods](/doc/docs/closing-a-period). - If you are not already using it, check out our powerful [Advanced Close](/doc/docs/advanced-close-fiscal-year) feature. | ## Retained Earnings Retained earnings are the total profits that have been earned to date. In R365, retained earnings appear for any set date range and are based on net profit. In most accounting systems, closing out retained earnings is the last step in closing the fiscal year, whether through a journal entry or an internal process. In R365, this step is completed for you. Because there are many steps involved in these calculations, there is no journal entry that you can drill into to change this amount. It is also important to note that any changes made to the general ledger will cause that entry to update the retained earnings. | **Viewing the Retained Earnings Calculation** | | **Example for years 2020 to 2021** | | --- | --- | --- | | At the end of the old year, a Net Income/Loss line appears on the Balance Sheet, labeled YTD Income (Year-to-Date Income). | | The Balance Sheet from 31 December 2020 displays a YTD Income of (-$50,457.29). ![A red line with black text Description automatically generated](https://cdn.us.document360.io/5c9d1111-0c69-4e96-8910-d7f2750fdc9d/Images/Documentation/retained-earnings-and-year-end-close-procedures-image-b67dsiqz.png) | | At the beginning of the new year, the Net Income/Net Loss line moves into Retained Earnings. | | The Balance Sheet from 1 January 2021 displays a Retained Earnings of $9,078,695.68 (2019 Retained Earnings + December 2020 YTD Income). ![A screenshot of a screen Description automatically generated](https://cdn.us.document360.io/5c9d1111-0c69-4e96-8910-d7f2750fdc9d/Images/Documentation/retained-earnings-and-year-end-close-procedures-image-zo1tt3ug.png) | ![A screenshot of a computer Description automatically generated](https://cdn.us.document360.io/5c9d1111-0c69-4e96-8910-d7f2750fdc9d/Images/Documentation/retained-earnings-and-year-end-close-procedures-image-15ic0hsz.png) Once you finish closing the year, or making any final adjustments, go into the [Legal Entity record](/doc/docs/legal-entity-record) and close your system by entering a Close Date. This will prevent any future postings prior to that date. > Unlike other transactions, you cannot drill down into the Retained Earnings transaction, but you can see where all expenses were zeroed out at Year End. ![A screenshot of a computer Description automatically generated](https://cdn.us.document360.io/5c9d1111-0c69-4e96-8910-d7f2750fdc9d/Images/Documentation/retained-earnings-and-year-end-close-procedures-image-3lz8vptc.png) Financial account used to record specific transactions in the general ledger. Restaurant365 An organization or company configured in R365 that represents a distinct legal and tax-reporting unit. Legal entities contain one or more locations and define how financial and operational activity is grouped, reported, and filed. Structured documents that provide insights and summaries of various operational metrics and financial data. Journal entry (JE) Record posted to the General Ledger to document financial activity.