{"id":1388,"date":"2026-01-20T06:46:41","date_gmt":"2026-01-20T06:46:41","guid":{"rendered":"https:\/\/vyaparapp.in\/blog\/?p=1388"},"modified":"2026-03-24T06:21:38","modified_gmt":"2026-03-24T06:21:38","slug":"how-to-close-books-for-financial-year","status":"publish","type":"post","link":"https:\/\/vyaparapp.in\/blog\/how-to-close-books-for-financial-year\/","title":{"rendered":"How to \u201cClose Book\u201d for this Financial Year and Why?"},"content":{"rendered":"\n<div class=\"wp-block-group vy-toc-wrap\"><div class=\"wp-block-group__inner-container is-layout-constrained wp-block-group-is-layout-constrained\">\n<p><\/p>\n\n\n\n<div class=\"wp-block-rank-math-toc-block\" id=\"rank-math-toc\"><nav><ol><li class=\"\"><a href=\"#so-what-is-this-close-book\">So, what is this \u201cClose Book\u201d?<\/a><\/li><li class=\"\"><a href=\"#lets-look-at-the-steps-to-close-book-in-vyapar\">Let\u2019s look at the Steps to \u201cClose Book\u201d in vyapar?<\/a><\/li><li class=\"\"><a href=\"#5-reasons-why-it-is-important-to-close-books-of-the-financial-year-how-1\">5 Reasons Why It Is Important To Close-Books Of The Financial Year &amp; How?<\/a><\/li><\/ol><\/nav><\/div>\n<\/div><\/div>\n\n\n\n<figure class=\"wp-block-image\"><img decoding=\"async\" src=\"https:\/\/vyaparapp.in\/blog\/wp-content\/uploads\/2018\/04\/finan_year_closing_feature_alt.png\" alt=\"financial year edn, close book, vyapar, business accounting, accounting software\"\/><\/figure>\n\n\n\n<p>\u201cClose Book\u201d is a strong&nbsp;<em>part of Financial Year \u2013 End&nbsp;procedures of every business<\/em><strong><em>.<\/em><\/strong><\/p>\n\n\n\n<h2 class=\"wp-block-heading\" id=\"so-what-is-this-close-book\">So, what is this \u201cClose Book\u201d?<\/h2>\n\n\n\n<p>\u201cClose Book\u201d is the accounting process where you clear your previous year account balances (of the income and expense accounts). i.e You start fresh again!!!<\/p>\n\n\n\n<p>Doing \u201cClose Book\u201d at right time will prevent you from making accidental changes on transactions that alter account balances of the closed accounting period. This could result in a great mismatch of accounts bothering you while filing taxes. It is for this reason companies close books on&nbsp;<em><strong>March 31st<\/strong><\/em>.<\/p>\n\n\n\n<p>On the other hand, if it is easy to access last year\u2019s data, which includes details of every transaction, you\u2019re leaving the door open to all kinds of problems which many a time results in messing up with important business data.<strong><br>For example:<\/strong>&nbsp;<em>Let\u2019s say you want to compare how your company is doing in 2016-17 versus how it did in 2017-18. If you never close March 2018 and you\u2019re free to make adjustments to that period, that comparison can no longer be relied upon.<\/em><em><br><\/em><em><br><\/em><em>Moreover, it always feels fresh to start something fresh.&nbsp;&nbsp;<\/em><em>Starting new with your accounting book is a refreshing idea after all!<\/em><\/p>\n\n\n\n<h2 class=\"wp-block-heading\" id=\"lets-look-at-the-steps-to-close-book-in-vyapar\">Let\u2019s look at the Steps to \u201cClose Book\u201d in vyapar?<\/h2>\n\n\n\n<ul class=\"wp-block-list\">\n<li>Open Vyapar App &gt; Click on \u201c<strong>Utilities<\/strong>\u201d in the left menu &gt; Select \u201c<strong>Close Financial Year<\/strong>\u201d from the given options.<\/li>\n<\/ul>\n\n\n\n<figure class=\"wp-block-image\"><img decoding=\"async\" src=\"https:\/\/vyaparapp.in\/blog\/wp-content\/uploads\/2018\/04\/c1-Copy-913x620.png\" alt=\"close books, financial year end, accounting software, business accounting, vyapar\"\/><\/figure>\n\n\n\n<ul class=\"wp-block-list\">\n<li>Now Select one Closing Date,&nbsp;it is recommended to choose 31st of March (Financial Year End). Later you\u2019ll be asked to take a backup of your business data. Make sure you save it at the right place (Don\u2019t forget to remember where you\u2019ve saved it!)<strong><strong><a href=\"https:\/\/vyaparapp.in\/\"><\/a><\/strong><\/strong><\/li>\n<\/ul>\n\n\n\n<figure class=\"wp-block-image\"><img decoding=\"async\" src=\"https:\/\/vyaparapp.in\/blog\/wp-content\/uploads\/2018\/04\/c2-Copy-990x607.png\" alt=\"close books, financial year end, accounting software, business accounting, vyapar\"\/><\/figure>\n\n\n\n<ul class=\"wp-block-list\">\n<li>Click \u201cStart Closing&nbsp;\u201d button to accept the closing date and to agree to the below&nbsp;<strong>STEPS<\/strong>&nbsp;that will be carried out as a consequence of closing financial year.&nbsp;<a href=\"https:\/\/vyaparapp.in\/\"><\/a><\/li>\n<\/ul>\n\n\n\n<figure class=\"wp-block-image\"><img decoding=\"async\" src=\"https:\/\/vyaparapp.in\/blog\/wp-content\/uploads\/2018\/04\/c3-717x620.png\" alt=\"close books, financial year end, accounting software, business accounting, vyapar\"\/><\/figure>\n\n\n\n<p><strong>What happens when you close book in vyapar?<\/strong><\/p>\n\n\n\n<p>\u201cClosing of Book\u201d means that your Accounts book gets closed for that year. Before closing book, vyapar&#8217;s <a href=\"https:\/\/vyaparapp.in\/free\/small-business-accounting-software\">accounting software<\/a> directs you to backup all your business data to a safe place.<\/p>\n\n\n\n<p><strong>Once your book is closed,<\/strong><\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li>Now, all your sale\/purchase\/bank transactions will be cleared. Whereas all your party\/ bank details will remain untouched.<a href=\"https:\/\/vyaparapp.in\/\"><\/a><\/li>\n<\/ul>\n\n\n\n<figure class=\"wp-block-image\"><img decoding=\"async\" src=\"https:\/\/vyaparapp.in\/blog\/wp-content\/uploads\/2018\/04\/c5-Copy-903x620.png\" alt=\"close books, financial year end, accounting software, business accounting, vyapar\"\/><\/figure>\n\n\n\n<p>AFTER,&nbsp;<a href=\"https:\/\/vyaparapp.in\/\"><\/a><\/p>\n\n\n\n<figure class=\"wp-block-image\"><img decoding=\"async\" src=\"https:\/\/vyaparapp.in\/blog\/wp-content\/uploads\/2018\/04\/c10-843x620.png\" alt=\"close books, business accounting, accounting software, financial year end\"\/><\/figure>\n\n\n\n<ul class=\"wp-block-list\">\n<li>Bill\/Invoice number will be reset back to 1.<a href=\"https:\/\/vyaparapp.in\/\"><\/a><\/li>\n<\/ul>\n\n\n\n<figure class=\"wp-block-image\"><img decoding=\"async\" src=\"https:\/\/vyaparapp.in\/blog\/wp-content\/uploads\/2018\/04\/c7-853x620.png\" alt=\"close books, business accounting, accounting software, financial year end\"\/><\/figure>\n\n\n\n<ul class=\"wp-block-list\">\n<li>Pending balances of all your parties from the previous financial year become the opening balance for this year<a href=\"https:\/\/vyaparapp.in\/\"><\/a><\/li>\n<\/ul>\n\n\n\n<figure class=\"wp-block-image\"><img decoding=\"async\" src=\"https:\/\/vyaparapp.in\/blog\/wp-content\/uploads\/2018\/04\/c6-Copy-834x620.png\" alt=\"close books, business accounting, accounting software, financial year end\"\/><\/figure>\n\n\n\n<ul class=\"wp-block-list\">\n<li>Your left out stocks of the previous year will be carried forward to this year.<a href=\"https:\/\/vyaparapp.in\/\"><\/a><\/li>\n<\/ul>\n\n\n\n<figure class=\"wp-block-image\"><img decoding=\"async\" src=\"https:\/\/vyaparapp.in\/blog\/wp-content\/uploads\/2018\/04\/c11-990x522.png\" alt=\"close books, business accounting, accounting software, financial year end\"\/><\/figure>\n\n\n\n<p>Your Vyapar App will be reset with just the necessary data while the rest is safely stored separately which you can retrieve back anytime. Now you can start your new financial fresh. You can start adding the new transactions from now on!<\/p>\n\n\n\n<h3 class=\"wp-block-heading\">What to do before \u201cClosing Book\u201d in Vyapar?<\/h3>\n\n\n\n<p>When you \u201cClose Book\u201d for the financial year, you can no more make entries\/adjustments to the older transactions.<\/p>\n\n\n\n<p><strong>Hence, it is good to do the following tasks before closing the book:<\/strong><\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li>Take a backup of all your business data onto your google drive or your phone.<\/li>\n\n\n\n<li>Reconcile any open cheques, unpaid\/partially paid invoices, incomplete transactions to avoid confusion in the coming year.<\/li>\n\n\n\n<li>It is recommended to close all the cheques before closing the accounts either by depositing\/ withdrawing from\/to the bank.<br><em>(For example: you\u2019d expect the book balance to be lower than the bank if you wrote a cheque today that hasn\u2019t yet been cashed)<\/em><\/li>\n<\/ul>\n\n\n\n<p>Basically, reconciliation is the process of getting the balance in your bank+cash-in-hand to agree to the (=) balance in your book, and it is done by identifying errors and making possible adjustments.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\" id=\"5-reasons-why-it-is-important-to-close-books-of-the-financial-year-how-1\">5 Reasons Why It Is Important To Close-Books Of The Financial Year &amp; How?<\/h2>\n\n\n\n<p><strong>\u201cClose Book\u201d<\/strong>&nbsp;is an important part of financial year-end procedures for every business.<\/p>\n\n\n\n<h3 class=\"wp-block-heading\">So, what is this&nbsp;\u201cClose Book\u201d?<\/h3>\n\n\n\n<p><strong>\u201cClose Book\u201d<\/strong>&nbsp;is the accounting process where you clear your previous year account balances (of the income and expense accounts\/ payments and receipts accounts) and you&nbsp;<strong>start fresh again!!!<\/strong><\/p>\n\n\n\n<h3 class=\"wp-block-heading\">Why&nbsp;\u201cClose Book\u201d&nbsp;Is Important For Your Business?<\/h3>\n\n\n\n<p><strong>1.<\/strong>&nbsp;Doing \u201cClose Book\u201d at the right time will prevent you from making accidental changes on transactions that alter account balances of the closed accounting period.&nbsp;<br><strong>2.<\/strong>&nbsp;Not Closing Books on time could result in a mismatch of accounts, which will bother you while filing taxes. It is for this reason companies close books on&nbsp;<strong>March 31st<\/strong>.<br><strong>3.<\/strong>&nbsp;On the other hand, if it is easy to access last year\u2019s data, which includes details of every transaction, you\u2019re leaving the door open to all kinds of problems which may result in messing up with important business data.<br><em>(<strong>For example:<\/strong>&nbsp;Let\u2019s say you want to compare how your company is doing in 2020-21 versus how it did in 2019-20. If you don\u2019t close&nbsp;<strong>March 2020<\/strong>&nbsp;and you\u2019re free to make adjustments to that period, that comparison can no longer be relied upon)<\/em><br><strong>4.<\/strong>&nbsp;Close financial year can be used to segregate business data in Vyapar between the financial years.<br><strong>5.<\/strong>&nbsp;Moreover, it always feels fresh to start something fresh. Starting new with your accounting book is a refreshing idea after all!<\/p>\n\n\n\n<h3 class=\"wp-block-heading\">Where to find&nbsp;&amp; how to&nbsp;\u201cClose Book\u201d&nbsp;in the Vyapar App?<\/h3>\n\n\n\n<p>Have Vyapar app?<\/p>\n\n\n\n<p><strong>Download now<\/strong><\/p>\n\n\n\n<p><a href=\"https:\/\/mobile.vyaparapp.in\/blog-mobile-billing-app\">DOWNLOAD VYAPAR APP<\/a><\/p>\n\n\n\n<p>How to Use it?<\/p>\n\n\n\n<h3 class=\"wp-block-heading\">What to do before \u201cClosing Book\u201d in Vyapar?<\/h3>\n\n\n\n<p>When you \u201cClose Book\u201d for the financial year, you can no more make entries\/adjustments to the older transactions.<\/p>\n\n\n\n<p>Hence, it is good to do the following tasks before closing the book:<\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li>Take a backup of all your business data onto your google drive or your phone.<\/li>\n\n\n\n<li>Reconcile any open cheques, unpaid\/partially paid invoices, incomplete transactions to avoid confusion in the coming year.<\/li>\n\n\n\n<li>It is recommended to close all the cheques before closing the accounts either by depositing\/ withdrawing from\/to the bank.<br><em>(For example: you\u2019d expect the book balance to be lower than the bank if you wrote a cheque today that hasn\u2019t yet been cashed)<\/em><\/li>\n<\/ul>\n\n\n\n<p>Basically, reconciliation is the process of getting the balance in your bank+cash-in-hand to agree to the (=) balance in your book, and it is done by identifying errors and making possible adjustments.<\/p>\n\n\n\n<h3 class=\"wp-block-heading\">Let\u2019s look at the Steps to \u201cClose Book\u201d in Vyapar<\/h3>\n\n\n\n<p>There are two ways of closing books in Vyapar.<\/p>\n\n\n\n<p><strong>1.) Start Fresh:&nbsp;<\/strong><\/p>\n\n\n\n<p>Users can use this option If the user wants to separate data as per financial years.<\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li>In order to close the financial year and start fresh click on the&nbsp;<strong>\u201cUtilities\u201d<\/strong>&nbsp;option located under main-menu &gt;&nbsp;<strong>Close Financial Year<\/strong>&nbsp;&gt; Select&nbsp;<strong>\u201cClosing Date\u201d&nbsp;<\/strong>it is recommended to choose 31st of March (Financial Year End) &gt;&nbsp;<strong>Start Fresh<\/strong><\/li>\n<\/ul>\n\n\n\n<figure class=\"wp-block-image\"><img decoding=\"async\" src=\"https:\/\/vyaparapp.in\/blog\/wp-content\/uploads\/2020\/04\/start-fresh-1-990x495.png?x74299\" alt=\"5 Reasons Why It Is Important To Close-Books Of The Financial Year &amp; How?\"\/><\/figure>\n\n\n\n<ul class=\"wp-block-list\">\n<li>Now save your old data (Close book data). Close book backup file will contain your last financial year data so make sure to store the same somewhere safe. (Don\u2019t forget to remember where you\u2019ve saved it!)<\/li>\n<\/ul>\n\n\n\n<figure class=\"wp-block-image\"><img decoding=\"async\" src=\"https:\/\/vyaparapp.in\/blog\/wp-content\/uploads\/2020\/04\/start-fresh-2-990x495.png?x74299\" alt=\"5 Reasons Why It Is Important To Close-Books Of The Financial Year &amp; How?\"\/><\/figure>\n\n\n\n<ul class=\"wp-block-list\">\n<li>Once data is saved, you will get the alert message saying&nbsp;<strong>\u201cBook closed successfully\u201d<\/strong>&nbsp;<\/li>\n<\/ul>\n\n\n\n<figure class=\"wp-block-image\"><img decoding=\"async\" src=\"https:\/\/vyaparapp.in\/blog\/wp-content\/uploads\/2020\/04\/start-fresh-3-990x495.png?x74299\" alt=\"5 Reasons Why It Is Important To Close-Books Of The Financial Year &amp; How?\"\/><\/figure>\n\n\n\n<ul class=\"wp-block-list\">\n<li>Acknowledge the alert message by clicking the<strong>&nbsp;\u201cOK\u201d<\/strong>&nbsp;button. The application will get restarted and you will be able to start fresh from transaction\/invoice number 1.<\/li>\n<\/ul>\n\n\n\n<p><em>Example: If you will close the financial year by selecting the closing date as of 31\/03\/2020 then all the transactions created till 31\/03\/2020 will get wrapped up in the close book (a separate company). However, party balance, cash in hand, bank balance and available stocks will remain as it is and it will appear in the new company.<\/em><\/p>\n\n\n\n<p>After the close book is done successfully, we suggest updating the company display name as per the financial year (ex: company-name 2020-21) because again if you will restore any previous data then it should not create any confusion among a company name. In order to access the data of the previous financial year (close book data), the user will have to restore the close book data. It will be restored as a separate company.<\/p>\n\n\n\n<p>Once your Book is closed \u2013&nbsp;<\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li>All your sale\/purchase\/bank transactions and more will be cleared. Whereas all your party\/ bank details will remain untouched.<\/li>\n\n\n\n<li>Bill\/Invoice number will be reset back to 1<\/li>\n\n\n\n<li>Pending balances of all your parties from the previous financial year become the opening balance for this year<\/li>\n\n\n\n<li>All left out stocks of the previous year will be carried forward to this year as an opening.<\/li>\n\n\n\n<li>All Closing balances of Bank\/cash from the previous financial year become the opening balance for this year<\/li>\n<\/ul>\n\n\n\n<p>Your&nbsp;<a href=\"https:\/\/vyaparapp.in\/\">Vyapar App<\/a>&nbsp;will be reset with just the necessary data while the rest is safely stored separately which you can retrieve back anytime. Now you can start your new financial fresh. You can start adding the new transactions from now on!<\/p>\n\n\n\n<p><strong>2.) Change Prefix:<\/strong><\/p>\n\n\n\n<p>Users can Close Financial year with a new invoice-prefix option &amp; set a new Transactions prefix for the new financial year.<\/p>\n\n\n\n<p><em><strong>Note:<\/strong>&nbsp;Users can use this if a user doesn\u2019t want the data of the previous financial year to be separated (as a separate company) from the data of the new financial year.<\/em><\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li>To set a new Transaction prefix please click on the&nbsp;<strong>\u201cUtilities\u201d<\/strong>&nbsp;option located under the main menu &gt;&nbsp;<strong>Close Financial Year<\/strong>&nbsp;&gt;&nbsp;<strong>Change Prefix<\/strong><\/li>\n<\/ul>\n\n\n\n<figure class=\"wp-block-image\"><img decoding=\"async\" src=\"https:\/\/vyaparapp.in\/blog\/wp-content\/uploads\/2020\/04\/prefix-1-990x495.jpg?x74299\" alt=\"5 Reasons Why It Is Important To Close-Books Of The Financial Year &amp; How?\"\/><\/figure>\n\n\n\n<ul class=\"wp-block-list\">\n<li>Please set the prefix for multiple transaction types and click on&nbsp;<strong>\u201cDone\u201d<\/strong><br>(<strong>For example:<\/strong>&nbsp;in a new financial year (2020-21), user can set invoice prefix as 2020-21\/)<\/li>\n<\/ul>\n\n\n\n<figure class=\"wp-block-image\"><img decoding=\"async\" src=\"https:\/\/vyaparapp.in\/blog\/wp-content\/uploads\/2020\/04\/prefix-2-990x495.png?x74299\" alt=\"5 Reasons Why It Is Important To Close-Books Of The Financial Year &amp; How?\"\/><\/figure>\n\n\n\n<ul class=\"wp-block-list\">\n<li>Now the user will be able to use a new invoice series by using a newly-created invoice prefix. The newly created prefix will be selected by default while creating any transaction.<\/li>\n<\/ul>\n\n\n\n<figure class=\"wp-block-image\"><img decoding=\"async\" src=\"https:\/\/vyaparapp.in\/blog\/wp-content\/uploads\/2020\/04\/Prefix-3-990x495.png?x74299\" alt=\"\"\/><\/figure>\n\n\n\n<ul class=\"wp-block-list\">\n<li>The final Invoice number in the first invoice post changing prefixes will appear as 2020-21\/1. Where 2020-21 is prefix created and 1 is the actual invoice number.<\/li>\n<\/ul>\n\n\n\n<p>When Business reaches the end of a Financial year, you need to \u201cclose the books.\u201d At a minimum, Businessperson will close books annually. Most businesses, however, close their books at the end of each month. One another major purpose for closing books at the end of the year is to give you a picture of the financial status of your business. You will find it easier to do if you close your books with the Vyapar app.<\/p>\n\n\n\n<hr class=\"wp-block-separator has-alpha-channel-opacity\"\/>\n\n\n\n<p><br><\/p>\n\n\n\n<p><\/p>\n\n\n\n<p><\/p>\n\n\n\n<p><\/p>\n\n\n\n<p><\/p>\n\n\n\n<p><\/p>\n","protected":false},"excerpt":{"rendered":"<p>\u201cClose Book\u201d is a strong&nbsp;part of Financial Year \u2013 End&nbsp;procedures of every business. So, what is this \u201cClose Book\u201d? \u201cClose Book\u201d is the accounting process where you clear your previous year account balances (of the income and expense accounts). i.e You start fresh again!!! Doing \u201cClose Book\u201d at right time will prevent you from making&#8230;<\/p>\n","protected":false},"author":9,"featured_media":1629,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_kad_post_transparent":"","_kad_post_title":"","_kad_post_layout":"","_kad_post_sidebar_id":"","_kad_post_content_style":"","_kad_post_vertical_padding":"","_kad_post_feature":"","_kad_post_feature_position":"","_kad_post_header":false,"_kad_post_footer":false,"footnotes":""},"categories":[1],"tags":[],"class_list":{"0":"post-1388","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"has-post-thumbnail","7":"category-accounting-software"},"_links":{"self":[{"href":"https:\/\/vyaparapp.in\/blog\/wp-json\/wp\/v2\/posts\/1388","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/vyaparapp.in\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/vyaparapp.in\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/vyaparapp.in\/blog\/wp-json\/wp\/v2\/users\/9"}],"replies":[{"embeddable":true,"href":"https:\/\/vyaparapp.in\/blog\/wp-json\/wp\/v2\/comments?post=1388"}],"version-history":[{"count":5,"href":"https:\/\/vyaparapp.in\/blog\/wp-json\/wp\/v2\/posts\/1388\/revisions"}],"predecessor-version":[{"id":2438,"href":"https:\/\/vyaparapp.in\/blog\/wp-json\/wp\/v2\/posts\/1388\/revisions\/2438"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/vyaparapp.in\/blog\/wp-json\/wp\/v2\/media\/1629"}],"wp:attachment":[{"href":"https:\/\/vyaparapp.in\/blog\/wp-json\/wp\/v2\/media?parent=1388"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/vyaparapp.in\/blog\/wp-json\/wp\/v2\/categories?post=1388"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/vyaparapp.in\/blog\/wp-json\/wp\/v2\/tags?post=1388"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}