Close the Year Guide

The following guide goes through best practices when closing an accounting year in Studio Designer. You should always consult with a CPA on what additional adjustments or reports are needed before closing the year.

Why do I need to Close the Year on my Studio Designer Account?

Studio Designer allows you to have two open years on your account. This means you can record transactions to your general ledger within a two-year span. This usually means you have the current accounting year open so you can record new activity for your business, and the previous year open for you to review and adjust your balances before filing a tax return.

Once you have filed tax returns for a year, you will want to close that year to lock your account balances for that year, and make sure you open the upcoming year to record new transactions.

For example, if you have 2020 and 2021 open on your account, closing the year will lock your account balances for 2020 and open 2022 so you can record new accounting activity. If you do not open 2022, all new transactions on your account will be dated 12/31/2021.

What to do before closing the year:

Review your Account Balances

Reconcile your Bank and Credit Card Accounts

You should be reconciling your bank and credit card accounts on a regular basis to make sure all of the transactions on your account statements match the transaction data in Studio Designer. Before closing the year you should reconcile your bank and credit card accounts through the year you are going to close so that the account balances in Studio Designer match the balances on your accounts.

This guide goes through how to perform bank and credit card reconciliation in Studio Designer:

Intro to Reconciliation

After you've reconciled, pull WIP report by Client or Vendor as needed and review them to make sure that you're properly recognizing revenue in the correct fiscal year.

Review Client and Vendor Balances

There are a few reports you can review to make sure your balances are up to date. You can find these reports by going to the Reports section on your account and searching by the report name

01 Work in Progress (WIP) by Vendor: This report shows you items that are on a Purchase Order but have not been invoiced to the client. Review this report to see what items you still need to invoice to the client and if there are amounts due to the vendor.

Accounts Payable by Order: This report shows you balances due on orders that have been invoiced to your client. Review this report to see if the Accounts Payable sub-ledger ties into the Balance Sheet. If there is a discrepancy, reach out to your tax professional.

02 Client Deposits by Item: This report shows client payments on un-invoiced items and in Funds Available You can find it by clicking the "Go to Financial Forms" button at the top of the Reports section. Use this report to see items that need to be invoiced to the client, or if there are payments in Funds Available that should be applied to invoices. You need to invoice these items to the client for the sales to be recognized in your income statement.

Accounts Receivable by Invoice: This report show balances due on client invoices. Review this report to see if there are client payments that need to be recorded in Studio Designer. Review this report to see if the Accounts Receivable sub-ledger ties into the Balance Sheet. If there is a discrepancy, reach out to your tax professional.


1099s are sent to individuals or businesses you paid for services. 1099s are only required for sole props, LLCs, or partnerships. You do not need to send a 1099 to C corps or S corps. You should consult with a CPA on how best to send 1099s and to whom you need to send a 1099.

Tip: Make sure your cash accounts have been reconciled prior to sending 1099s.

It's important to note that 1099-MISC and 1099-NEC are different. Form 1099-MISC is used in the reporting of payments that are not subject to self-employment tax—things like rents and prizes. Form 1099-NEC is used for reporting non-employee compensation that is most likely subject to self-employment tax. 

This guide goes over how to pull your payment information from Studio Designer to get accurate amounts to report on your 1099s: 1099 Reports

Important: 1099s are issued on cash transactions only. As of 2022, third-party payment processors (Venmo, etc.) are required to issue their own 1099s with a $600 threshold. Credit card processors must also issue their own 1099s.

If your cash accounts have been properly configured in the Chart of Accounts, we suggest running a 1099 Transactions report to determine when to issue 1099s. For verification, reach out to your tax professional.

Print a Balance Sheet and Income Statement

Your CPA will need a Balance Sheet and Income Statement (Profit and Loss Statement) to file your tax return. You should consult with your CPA to determine what additional information they need before closing a year on your account. 

Go to Reports and click Go to Financial Forms to create a PDF of the 01 Balance Sheet and 01 Income Statement.

Note: Your financial statements are on an accrual basis only.

Close the Year

Once you have filed your tax return for an accounting year, you should close that year to lock your account balances for that year. Confirm with your CPA if it is okay to close the year or if there are any adjustments that need to be made on your account before closing.

To access Close the Year, click on Accounting from your left-hand menu and click Close the Year.

Important Notes:

  • When you click the Close the Year button it will close only the one year stated on the button
  • After the year is closed it cannot be reopened. Please make sure there are no adjustments you need to make in the year you are closing.
  • No entries can be made to a year after it is closed.

Once you click Close the Year, it will close the year stated on the button and open up the next accounting year.

Additional Resources

For a more detailed explanation of how you can review your account balances before closing the year, watch the below training webinars. Note: You will need to create a login to view these webinar recordings.

Preparing for Year End

All About 1099s

Closing Out Projects