Summary
Year-end processing is one of the most high-stakes workflows your finance team runs in a financial management system—because it’s the moment when monthly discipline becomes annual financial integrity. A smooth year-end close supports accurate reporting, cleaner audits, better leadership visibility, and fewer downstream corrections that can ripple into billing, reporting, and operational planning.
In 3E, the process becomes far more manageable when you follow a consistent approach: validate key setup (including retained earnings and unit periods), complete a clear checklist, close and balance the final month, open the new fiscal year in the right order, and handle late adjustments through controlled prior period posting—without reopening closed periods. In this webinar, we walk through the key steps, including fiscal year control, the GL year-end batch, system-generated closing journal entries, and best practices for prior period adjustments and period override permissions.
Watch the full webinar recording.
Why Year-End Processing Matters (Even If You’ve Done It Before)
Year-end is where the strength of your financial management software is tested. Even when the steps are familiar, the close can become stressful if the process relies on tribal knowledge, manual workarounds, or “we do it this way because we always have” habits. The firms that handle year-end most confidently tend to treat it as a repeatable workflow—one that’s supported by the system, reinforced by checklist discipline, and governed by controls that reduce risk (like not reopening closed periods). As noted in this 3E webinar, some teams come to year-end as veterans who want a refresher, while others may have gone live recently and need a clear, practical path. Either way, the objective in 3E is the same: confirm your setups are right, close and balance your final month like a normal month-end, open the new year so balances roll forward correctly, and close the prior year cleanly—then use controlled options for posting into closed periods when real life (or audit follow-up) happens. With those outcomes in mind, the most effective year-end close starts well before you open or close a fiscal year. It begins with validating the core setups that determine how balances roll forward and how the system behaves when you run year-end.Step 1: Validate Key Year-End Setups Before You Run Close
Before you touch fiscal year control, validate the configuration that drives your closing entries and roll-forward behavior.Confirm Your Fiscal Start Month (and Understand Where It’s Defined)
In 3E, fiscal start month is defined at the unit level (Unit Setup). Your firm may have one fiscal start month, while individual operating units can have different fiscal start months (for example, different regions or offices). The key point: the year-end process is consistent—timing differs by unit if their fiscal start month differs.Retained Earnings: Verify the Account and How It’s Being Used
One of the most important setup checks is your retained earnings / owner’s equity clearing behavior, because that’s where revenue and expense accounts clear during year-end. In the session, we highlight several practical checks:- Account class should be populated so system logic transactions can post properly
- Control account should be deactivated because closing entries require journal entries, and control accounts restrict that
- Auto-add should be enabled to support new combinations (e.g., new office/department) so needed GL combinations can be created automatically
Make Sure the Retained Earnings Natural Account Is Defined at Least Once
A small but important tip: if you’re new or it’s your first year-end, ensure the retained earnings natural (GL natural) has been defined at least once in GL Account so auto-add can build combinations from there going forward.Step 2: Use a Practical Year-End Checklist (Make It Your Own)
In this webinar, we provide a checklist framework—useful even if you already have internal close procedures. Highlights include:- Reporting and tracking: Year-end is a good moment to ask: do you need to refine or add reporting for next year? If you want to track something new, plan and test it now so you’re ready going forward.
- Rate changes and future-dated updates: Rate changes are often already underway. The session calls out future-dating rates on timekeeper-affected fields and matter rate structures as part of prep.
- New year-dependent transaction types: If you plan to start tracking new items (e.g., “bill on account” or a new revenue stream), year-end is a natural checkpoint to ensure transaction types are created and tested—ideally in test first.
- Confirm periods exist (and watch for “short year” issues): 3E often has periods built out far in advance, but the key is confirming all periods exist for the upcoming year—especially if you encounter a “short year” scenario.
- Standard close hygiene (trust, WIP/time, bills, AP): Finalize trust transactions, review outstanding time and WIP, confirm bills are produced and sent, complete reversals int he correct year, and review outstanding AP vouchers (write off, reverse, or get checks issues).
- Optional: non-billable purge after month close: After closing and balancing your final month, you can optionally purge older non-billables (like legacy sick/vacation entries) if they clutter reporting.
Step 3: Close and Balance the Final Month First (Then Open the New Year)
A consistent theme: treat your final month like a normal month-end close—close and balance first, then proceed to fiscal year actions.Close Your GL Period By Unit
In the workflow shown, you close your December (or final) period by unit—like you always do—so you’re not carrying open statuses into year-end. A helpful note: when you run fiscal year control, if any periods are left open (including by posting source), the process will close them automatically. That said, best practice is to close monthly and know your environment is clean before you run year-end.Step 4: Open the New Fiscal Year in the Right Order
Year-end processing relies heavily on Fiscal Year Control—the primary screen used to open and close years.Best-Practice Order: Firm First, Then Operating Units
The session recommends opening the firm unit first (since everything rolls up), then opening each operating unit. Why it matters: opening the year triggers roll-forward behavior for balance sheet accounts and clears revenue/expense into retained earnings via system-generated closing entries.Understand What the “Status” Means When Opening
When selecting the year:- N = Never opened
- C = Opened and then closed
GL Year-End Batch: Confirm It Exists and Is Scheduled
The webinar calls out a behind-the-scenes dependency: the GL year-end batch (visible via Notification Task Manager). Some firms schedule it (e.g., every two minutes), others run it manually when needed. If you don’t want to wait for scheduling, you can use Notification Start Task to kick the “GL year-end batch” immediately.Step 5: Close the Prior Fiscal Year (and Don’t Reopen Closed Years)
After opening the new year and opening the periods you need, you proceed to close the prior year—again through Fiscal Year Control.Best-Practice Order for Closing: Units First, Then Firm
The recommended sequence is the reverse of opening:- Close operating units
- Close firm unit last
Critical Rule: Once Closed, Don’t Reopen
Once a period/year is closed, don’t reopen it. Instead, use controlled methods to post into closed periods.What 3E Creates Automatically During Year-End
As part of the process, 3E creates system-generated Closing Journal Entries (CJEs). You can view them in General Journal Entry, and you’ll see activity that clears fee income / expenses into retained earnings based on your masking and book (GL type). You may see multiple CJEs depending on different GL types/books (for example, purchasing encumbrances or other categories), but the core idea is the same: system-generated entries support the year-end roll-forward and clearing logic.Prior Period Adjustments: Use Controls Instead of Reopening Periods
Year-end almost always raises the same “what if we missed something?” question. Don’t reopen—use prior period adjustments with permissions and guardrails.“Allow PPA” Checkbox: Important for First-Time Year-End
When closing the year, take note of the “Allow PPA” option (Allow Prior Period Adjustments). For first-time users, it may be blank—so it’s important to intentionally set it.Period Override Permissions: Controlled Access to Closed Periods
To post into closed periods safely, 3E supports Period Override Permissions, which can be assigned by user or role.Common Troubleshooting Questions
The Q&A portion includes practical “what should I check first?” guidance.If You Can’t Open a Fiscal Year
First checks included:- Use “Review Period” and confirm you have 12 periods
- If not, run Build Unit Period Batch to build missing periods (especially if you have a short year)
If Detail and Roll-Up Accounts Don’t Tie
Suggested checks:- Validate roll-up definitions (did new accounts get missed?)
- Include inactive accounts when running reports, in case an inactive account still carries a balance
- Open a support ticket with screenshots (because “screenshots save lives”)
If You Have Multiple Prior Years Left Open
Yes, you can close them now—but do it consecutively, starting with the oldest open year and moving forward year by year.Future Period Processing: Let Work Continue Without Forcing GL Posting
If you’re not ready to fully open the new year but need people to keep entering work, the session explains how 3E can allow future-period entry while the GL posting waits for the period to open.Where Future-Period Controls Live
- Financial Controls: “Future Periods” checkbox/value (often blank; you can set 1, 0, etc.)
- GL Type and Access: can override what’s set in Financial Controls
- User/Role: can be more specific and takes precedence in the hierarchy
