If your Profit and Loss report shows year-to-date totals that include more than one financial year, the previous year has not been closed out into retained earnings. Until it is, the P&L keeps accumulating rather than resetting at the start of each year.

This article explains why this happens and how to correct it.

Symptoms

• The Profit and Loss report shows year-to-date totals covering more than one financial year.
• A prior year's profit or loss has not moved into retained earnings on the balance sheet.
• Your accountant is asking for adjusting entries to correct figures that should already be correct.

Causes

The Fiscal end of year date is not set in the system for the actual year end. Setting this date will automatically clear your revenue and expense accounts even if you have not finalized the fiscal year, so that reporting for the current year reflects the clearing of these accounts. 

Correcting the Report (Admin)

An administrator must complete these steps.

To correct the report:

1. In Legal Accounting, go to Admin > Firm > Settings.
2. Click the Features subtab on the Firm ribbon. 

3. Review the date in the Fiscal end of year date field. If the date is incorrect or missing, enter the correct date.   

   Note: If you cannot edit this field, it may be because the year is already closed. See the set of instructions below for help correcting this.

4. Click Save to save your changes.

To correct the report date if the year is already closed:

1. Click the Financials menu. 
2. Go to Close Period.
3. Expand the Previous Period section. 
4. Open the year end by clicking the delete icon (which looks like a trash can). You will know it is a year-end posting as there will be a book icon in the Fiscal Year Adjustments column. 
5. Review the fiscal year end date to ensure it is set correctly and re-close the year.

Updated October 02, 2026 19:05