# Creating a Closing Entry for the Financial Year

> Source: https://help.getedara.com/en/articles/5244475-creating-a-closing-entry-for-the-financial-year · Category: Accounting › Horizontal FS · Last updated: 2026-08-05 · العربية: https://help.getedara.com/ar/articles/5244475-%D8%B9%D9%85%D9%84-%D9%82%D9%8A%D8%AF-%D8%A7%D9%84%D8%A5%D9%82%D9%81%D8%A7%D9%84-%D9%84%D9%84%D8%B3%D9%86%D8%A9-%D8%A7%D9%84%D9%85%D8%A7%D9%84%D9%8A%D8%A9

“Edara” allows you to automatically create a closing entry for the current or any previous financial year, enabling you to close expenses and revenues in the designated account.

## Creating a Closing Entry for the Financial Year

Ensure the following:

1. There is an account of type "Retained Earnings," or define the account type if not specified.
2. [Post all transactions](https://help.getedara.com/en/articles/5244463-posting-entries-after-reviewing-them) from the Posting page in the Accounts module up to the date for which the closing entry is to be created.
3. [Set the posting type in the Chart of Accounts](https://help.getedara.com/en/articles/5244527-determining-account-posting-types-in-the-chart-of-accounts) .

And the steps to Create a Closing Entry are:

1. Go to the Accounting module.
2. Select “Horizontal FS” Report.
3. Specify the closing account, such as “Retained Earnings”.

> **Note:** Avoid filtering by cost centers or their levels.

1. Select the closing period date from the “As of” field, as the closing entry cannot be created when a “From – To” date range is selected.
2. Enable the “Include closing JE” option.
3. Ensure that “Consider replacement orders” is not enabled.
4. Click “ **Generate** ”.
5. Click the “ **+** ” icon.
6. Select “Closing JE”.
7. Confirm the action when prompted.

![Creating a Closing Entry for the Financial Year — Confirm the action when prompted.](https://help.getedara.com/images/fin-reports/5244475/01.en.gif)

## Frequently asked questions

**Can I filter by cost centers when creating the closing entry?**

Avoid filtering by cost centers or their levels.