Finalize annual accounts

Year-end closing for accounts

If you are going to close the accounts for a period, there are some things you need to keep in mind before you say you are satisfied. We have collected the most important things in 6 points.

1. Check that all bills that apply to the period have been included

Make sure with the rest of the board, and check that no bills come in at the last minute, then it may be a good idea to wait to get these included in that period. Especially if these are expenses that have been budgeted for in the period. If you have short-term debt and can pay this already on the previous year's accounts, it is also a good idea.

2. Check if anyone owes the association money

Check if the association has money due at the end of the period, there may be refunds you are waiting for or other income that belongs to the year, but has not yet been credited to the account. You can try to get these in before you close the accounts or register these as receivables in the accounts so that the accounts show the correct result and financial position.

3. Reconcile your bank accounts.

You should reconcile your bank accounts every month. But at the end of the accounting period, you should make an extra effort to ensure that all transactions in and out of your account are registered in the accounts. Not all transactions are for which you receive a physical or digital voucher, so it is good to look at movements in your account and have these registered. This can be, for example, expenses in the bank or purchases online where you use the association's bank card.

When everything is done correctly, the balance on 31.12 in the bank account should match the balance in the corresponding bank account in the accounts. If the balance in the bank does not match the closing balance for the bank account in the accounts, then you have made an incorrect registration.

In this case, one of two things often has happened.

1. You forgot to enter a bank transaction in the accounts.
2. Same transaction entered twice
3. Wrong amount or date
4. Posting to the wrong bank account
5. Wrong entry on debit or credit.

4. Review the balance sheet in the accounts

When you have reconciled the accounts, you should check the balance sheet in the accounts. Check that you know what is an asset and what is a debt to others. Look in particular at the following:

5. Transfer profit to equity

When you have the result ready for the period – either a profit or a loss – you should transfer this to equity.

The year's profit is then transferred to equity. A profit increases the association's equity, while a loss reduces equity.

Which account numbers are used may vary between accounting systems and chart of accounts. If you use account 8950 for the allocation of the annual result and 2050 for equity, a profit of NOK 2,567 can, for example, be closed against these accounts.
Example: An association has a profit of NOK 2,567 for a period.

In the accounts, it will look like this:
31.12.26, the annual result is entered in the accounts as follows
Description of transfer of annual result – 31.12.26
8950 Allocation of annual result +2,567,-
2050 Equity -2,567,-

6. Take out the profit and loss account and make a final check

When all the final entries have been made as described above, take out a profit and loss account and balance sheet for the entire year.

Now you can make a final check of the following:

When you can answer YES to all the questions, you have closed the accounts for the period.