Closing the Financial Year
At the end of every Nepali fiscal year — 31 Ashad in Bikram Sambat — your business must formally close its books. In Udyot ERP (eByapari), closing the financial year posts a system Journal that transfers net profit or loss into Retained Earnings, locks the closed period so no one can silently alter prior-year figures (NAS 8), and freezes the opening balances your new year starts from. This guide walks you through the full process.
Nepal fiscal year and Bikram Sambat dates
Nepal’s fiscal year runs from 1 Shrawan to 31 Ashad (roughly mid-July to mid-July in AD). All dates in Udyot ERP are entered and displayed in Bikram Sambat (BS) format — for example, 2081-01-01 means 1 Shrawan 2081. The system’s date picker converts AD to BS automatically, so you can work in whichever calendar you prefer.
Each company has its own fiscal year record. To view or add fiscal years, go to Accounting → Fiscal Years. For background on the BS calendar, see Nepal fiscal year and BS calendar.
Before you close: a year-end checklist
Run through this list before clicking Close Period. Closing is admin-reversible, but it is cleaner to get things right the first time.
- Post all outstanding vouchers — make sure every sales invoice, purchase bill, payment, and journal entry for the year has been saved and posted. Any voucher left in draft will not be included in the year’s figures.
- Reconcile your bank accounts — go to Bank Reconciliation and confirm that every bank ledger matches your bank statements for Shrawan through Ashad.
- Square your opening balances — open Reports → Trial Balance and check that the footer shows Dr total = Cr total. An amber banner appears if there is an imbalance; click Auto-square to resolve it before proceeding.
- File VAT and TDS returns — generate your final VAT return and IRD annexes and your TDS certificates for the year. These are easier to produce before the period is locked.
- Review the P&L and Balance Sheet — share the final financial reports with your CA or auditor. The NFRS-comparative columns let your auditor see both the current year and the prior year side by side.
How to close the financial year
- Go to Accounting → Period Closing.
- The page lists every fiscal year for your company with its current status: Open, Closed, or Reopened.
- Click + Close Period.
- Select the fiscal year you want to close (for example, FY 2081/82).
- Confirm. Udyot ERP posts an automatic closing Journal dated to the last day of the fiscal year (31 Ashad). This Journal debits or credits every Income and Expense ledger to bring them to zero, with the net difference going to Retained Earnings.
- You will see the close Journal in Reports → Daybook for that date. The Period Closing detail page shows the Journal ID, the date it was posted, the user who performed the close, and the total Dr/Cr amounts.
After closing, Income and Expense ledger balances reset to zero for the new year. Balance Sheet account balances (Assets, Liabilities, and Equity including Retained Earnings) carry forward automatically — you do not need to post a separate opening Journal.
What the period lock means
Once a fiscal year is closed, Udyot ERP enforces a period lock in line with NAS 8 §41. This means:
- You cannot post any new voucher dated inside the closed period — the system rejects it with: “Period is closed; corrections must use a Prior-Period Error JV (NAS 8 §41).”
- All existing vouchers in the closed period become read-only, preventing silent changes to prior-year figures.
- Opening balances for the new year are frozen. Balance Sheet and Trial Balance always show the correct, immutable opening figures.
Making corrections after closing: NFRS restatements
If your auditor finds an error that belongs to a closed year — for example, a rent invoice that was missed — you handle it through the Restatements workflow, not by reopening the period.
- Go to Accounting → Restatements → + New Restatement.
- Select the Target FY (the closed year the error belongs to).
- Enter a clear description — for example: “Omitted Office Rent Shrawan 2081 — vendor invoice surfaced post-audit.”
- Set the Posting Date to a date in the current open fiscal year.
- Build the Journal legs. For a missed expense, you would Dr Retained Earnings (Opening) and Cr the relevant expense ledger or vendor payable.
- Save and submit for approval. A second user (with admin rights) must approve it — the same person who created the restatement cannot approve it themselves.
Once approved, the Restatement Journal posts to the current year but is tagged to the prior year in the audit trail. The Five-Year History report (Reports → 5-Year History) shows the restated comparative figure with a “Restated” footnote — mandatory under NFRS comparative-period disclosure rules. Your Balance Sheet will also reflect the adjusted opening Retained Earnings.
Viewing and reopening a closed period
You can see the full history of closes and reopens at Accounting → Period Closing. Each row shows the status, date closed, and who performed the action.
If you need to reopen a closed period, only Admin users can do this. Reopening reverses the closing Journal automatically. If you have already closed a later year as well — for example, 2082/83 after 2081/82 — you must reopen them in reverse order. Auditors can view all historical reports up to their assigned access date but cannot modify anything.
Nepal-specific note
Your CA will typically request the signed Balance Sheet, P&L, VAT return summary (Annex 1 and 13), and TDS deposit challan receipts before filing with the IRD. Udyot ERP generates all of these from within the accounting module. Confirm your PAN, VAT registration number, and company details are correct in Company Settings before sharing reports externally.