By Christian Ngah, D365 F&O Functional Consultant(MB310),Microsoft Certified trainer(MCT)

Year-End Close Activities in Dynamics 365 Finance and Operations: Consultant vs End User Guide

Closing the books at year-end is a critical task for finance teams. In Microsoft Dynamics 365 Finance and Operations (D365 F&O), the year-end close process ensures that Profit & Loss accounts are rolled into retained earnings, balance sheets are carried forward, and the business starts the new fiscal year on solid financial footing.

This guide explains:

• The Functional Consultant’s role in preparing the system.

• The End User’s role in executing the process.

• A step-by-step walkthrough of the year-end close.

• Best practices and FAQs to make the process smoother.

The Functional Consultant’s Role (Before Year-End)

The Functional Consultant prepares the system and ensures everything is tested before finance executes the close. Think of this role as setting the stage for the performance.

Key responsibilities include:

1. Configure General Ledger Parameters

   • Ensure “Delete close of year transactions during transfer” is enabled.
     

2. Set Up Fiscal Year Close Groups

   • Assign legal entities, fiscal calendars, and retained earnings accounts.

3. Prepare Documentation for Finance Teams

   • Provide a checklist of year-end postings required before closing.

   • Include step-by-step guidance for running the process.

4. Run Test Scenarios in UAT

   • Validate balances transfer correctly.

   • Resolve errors before year-end.

The End User’s Role (During Year-End)

Once the setup is complete, the finance team (end users) carries out the close. Their focus is execution and validation.

Key responsibilities include:

1. Complete All Postings

   • Ensure all invoices, accruals, and adjustments are posted.

   • Example: Missing a £5,000 invoice will distort retained earnings.

2. Run the Year-End Close Batch Process

   • Go to General Ledger > Period Close > Year-End Close.

     

     

     • Select the fiscal year, legal entity, and retained earnings account.

     • Run in batch mode, preferably over a weekend.
       

3. Validate Results

   • Run a Trial Balance for last year and new year as below:

   • 

   • 
   • Compare balances for cash, AR, AP, and retained earnings.

4. Correct and Re-Run if Needed

   • If balances are incorrect, reverse and re-execute.

Step-by-Step Year-End Close Process

Here is a practical workflow most finance teams will follow:

1. Enable Parameters in General Ledger

   • Confirm deletion of year transactions during transfer.

   • 

   • Set Up Fiscal Year Close Group

     • 

     • Define group name, legal entity, fiscal calendar, and retained earnings account.

2. Generate Trial Balance for Current and Next Year

   • Validate balances before and after closure

   • 

3. Run Year-End Close in Batch Mode

4. • Execute during downtime to avoid disruptions.

5. Verify Opening Balances for Next Year

   • Compare prior year closing balances with new year opening balances.

Best Practices for Year-End Close

• Post all transactions before running the close.

• Test the process in a UAT environment first.

• Schedule the batch job over weekends or quiet periods.

• Document steps with screenshots for training and repeat use.

• Stay current with Microsoft guidance: Year-end close in Dynamics 365 Finance.

• Use internal links on your website to related guides (e.g. Financial Dimensions in D365 Finance, Trial Balance Reporting).

FAQs

Q1: Can I re-run the year-end close if something goes wrong?
Yes. The process can be reversed and executed again.

Q2: Does year-end close affect subledgers like AP or AR?
No. Only General Ledger balances are carried forward.

Q3: What if the retained earnings account is not set up?
The process will fail. Confirm setup in General Ledger > Setup > Ledger.

Q4: How long does it take?
It depends on transaction volume. For larger entities, run it in batch mode over a weekend.

Q5: Where can I learn more?
See Microsoft’s official guide: Year-end close overview.

Conclusion

The year-end close in Dynamics 365 Finance and Operations is a collaborative process:

• Functional Consultants configure and test.

• End Users execute and validate.

With proper preparation, documentation, and scheduling, the process becomes predictable, accurate, and stress-free.