Happy New Year! 
And don’t forget to post the period closing voucher!
The start of a new year symbolizes a fresh beginning, a clean slate. This concept is equally applicable to your company’s accounting books. In ERPNext, a period closing voucher resets the balances of all income and expense accounts (also known as nominal accounts) to zero and transfers the profit or the loss to the balance sheet.
Start by performing your regular month-end activities for the final month of the year. Then, proceed with your year-end activities, which may include:
- Adjusting the values of assets
- Updating bad debts or write-offs
- Making deferred taxes and liabilities adjustments
- Posting other adjusting journal entries
- Revaluation of assets and liabilities recorded in foreign currencies
Once you are satisfied with the profit and loss report and the balance sheet report, create the period closing voucher as the final entry for the closing financial year. This action sets the balances of all your expense and income accounts to zero and transfers the net income to the balance sheet, resulting in a balanced balance sheet.
Choose the retained earning account (also known as earnings surplus) in ‘Closing Account Head’ in the period closing voucher.
Ideally, avoid creating any further accounting entries once the period closing voucher is posted.
However, if you must, don’t forget to create another period closing voucher after you post those extra accounting entries.
Happy year end closing😊.