Close the Books: Locking Finished Months in DynaTax AI
Lock a month once its transactions are final. Closing a period protects reconciled and filed months from accidental edits, and closing the fiscal year sweeps net income into retained earnings. This guide covers the pre-close checklist, the month-by-month closing order, and what happens when you need to reopen.
What Closing a Period Does
Closing a period marks it as final. Once a month is closed:
- The ledger is locked for that month. Closed periods reject new journal entries — nothing can post, edit, or back-date into the locked date range, whether from the journal entry screen or from an automated flow.
- Every journal entry in the month is stamped as closed, with who closed the period and when.
- Your accountant is notified when you close a period yourself.
Why bother? Because a report you sent to your lender, a reconciliation you signed off, or a tax return you filed is only as reliable as the books it came from. If January can still change in July, none of those numbers are safe. Closing draws the line: history behind it stays put.
Where to Find It & Who Can Close
In the client portal, go to Accounting → Close the Books. The screen lists your months with their status — a Closed badge, the close date, and who closed it — plus a fiscal-year row for the annual close. Each open month has a Close… action.
- Business owners and admins: the page is available to the OWNER and ADMIN roles on your business team. Other team members do not see it.
- Accounting professionals:firms see the same periods surface inside each client's bookkeeping workspace, so your accountant can run the close for you.
The Pre-Close Checklist
Clicking Close… opens a dialog that runs pre-close checks. Every check must pass before the period can close:
- Trial balance is balanced— total debits equal total credits as of the period's end date.
- No draft journal entries in the month. Post them or delete them first; a draft left behind would change the month after you certified it.
- No uncategorized transactions in the month. Anything still pending categorization or flagged for review must be resolved — closing a month with unreviewed transactions defeats the point of closing it.
- No earlier month is still open — see the closing order below.
The same checks are enforced on the server when the close actually runs, so the dialog never offers a close that would bounce.
Periods Close in Order
Periods close oldest-first. You cannot close July while May is still open: July's beginning balances build on May's figures, and freezing July on top of numbers that are still moving would certify a moving target. If an earlier month is open, the close dialog tells you which one to close first.
Closing the Fiscal Year
The fiscal-year row has its own Close year… action, and it does more than lock twelve months:
- Every month of the year must already be closed. The annual close checks for any still-open month and refuses until it is closed.
- A year-end closing entry is posted automatically. It zeroes out every revenue, expense, and cost-of-goods-sold account for the year and sweeps the net income into your Retained Earnings equity account, dated the last day of the year.
Reopening a Closed Period
Sometimes a locked month genuinely needs a fix — a late invoice, a correction your accountant requests. Reopening is deliberate:
- A written reason is required.It is stored on the period's record for the audit trail.
- Reopening cascades forward.Reopening March also reopens April, May, and every later closed period — including a closed fiscal year that contains them. Their beginning balances depend on March's figures, so they cannot stay certified while March changes. The reopen dialog shows an "Also reopens" preview before you confirm.
- The year-end closing entry is reversedautomatically if you reopen into a closed year, so the retained-earnings sweep doesn't linger on top of numbers that are about to change.
After the fix, close the reopened months again, oldest-first. The Re-close… dialog shows exactly which journal entries were added since the period was reopened and the net-income change they caused — review the diff, then re-close.
Closing vs. Completing a Reconciliation
These two locks are related but separate:
- Completing a bank reconciliation locks that one reconciliation — the matched statement for one bank account — against further edits. Other activity in the month can still change. See the Bank Reconciliation guide.
- Closing the period locks the entire month's ledger — every account, every journal entry.
A good month-end rhythm: reconcile each bank and card account, review what's left, then close the month.
Frequently Asked Questions
Do I have to close every month?
No — closing is optional, but recommended once a month is reconciled. At minimum, close periods you have reported on or filed taxes from. Note that the annual close requires every month of that year with activity to be closed first.
What happens if something tries to post into a closed month?
It is rejected. The closed-period guard blocks journal entries dated inside any closed period — monthly or annual — so back-dated changes cannot slip into certified numbers. To make the change, reopen the period first.
Why did reopening one month unlock several?
That is the cascade rule. Every period after the one you reopened builds on its balances, so those later periods cannot remain certified. They all reopen together, and you re-close them oldest-first once the fix is in.
I closed a month by mistake and I work with a firm. Now what?
Ask your firm — they can reopen it from your bookkeeping workspace on their side. Client-side reopening is only available to businesses without an attached firm, so a mis-closed month is never a dead end either way.