Dynamics Community Forum Thread Details

Hello - I am trying to do a very late fiscal year close for a project that is not yet live so closing the books hasn't been of utmost importance. But, we definitely need to get moving on closing the year. This will be the first time either me or my colleague have closed the year in D365 so we are trying to learn and document. We have watched some videos and read a lot of the "Learn" topics but still are not getting it.

First, we have public sector enabled. Second, we have budget controls enabled AND have the "Include carry-forward amounts" unchecked as the client does not carry forward left over budget amounts; they are a use it or lose it shop. The implementation includes Inventory, PO, AP, AR, and Budgeting.

We are trying to figure out the order in which the modules. My past experience has me closing or sweeping open POs, open SOs, open AP invoices and open AR invoices before closing the GL each month. We did manage to close the months for the year but now we are having difficulty running the year-end close processes.

From what we have read so far, we need to first run Purchase order year-end close but we can't seem to get this process to run. We are getting the following message "The posting definitions for closing or opening entries are incomplete or missing. Correct or define the posting definitions, and then run this process again." We're not sure what is meant by posting definitions for closing or opening entries. Are these the entries to transfer P&L account balances to Retained Earnings? What would an opening entry be?

From what we have read, you can only run or must run the Purchase order year-end close if you have Public Sector enabled but do not have the "Include carry-forward amounts" checked. Is this accurate? Do we not have to run this process?

We see there are a fair amount of articles about the YE closing process but can't seem to hit on a couple that are clear with remedial steps listed out, especially for a Public Sector implementation.

Categories:

Dynamics 365 Finance

Public Sector Fiscal Year-End Close in Dynamics 365

Since you are working with Public Sector, Budget Control, and have "Include carry-forward amounts" unchecked, you are following the standard "use-it-or-lose-it" process. Below is the structured approach to closing the year in Dynamics 365 Finance, addressing your specific issue with Purchase Order Year-End Close and the missing posting definitions.

Error Persists: Double-check posting definitions for both closing and opening entries. Ensure they are assigned to the correct Posting Type (e.g., "Purchase order year-end close").
PO Year-End Close Fails: Confirm all POs are in a final state (approved/invoiced) and no open workflows exist.

1. Correcting the "Posting Definitions for Closing or Opening Entries" Error

The error message suggests that posting definitions for year-end close transactions are missing. Posting definitions in the Public Sector module replace posting profiles and determine how transactions are posted to the ledger.

Solution: Define Posting Definitions for Year-End Closing Entries

Go to: General Ledger > Posting Setup > Posting Definitions
Check for Closing and Opening Entry Posting Definitions:
- You should have definitions for:
  - Year-End Closing Entries (transfers balances from P&L to fund balance/retained earnings)
  - Opening Entries (establishes beginning balances for the new year)
If missing, create them:
- Click New and name it something like YE_CLOSE_DEF
- Assign applicable ledger accounts for closing and opening entries
- Ensure each fund has a mapping for year-end close transactions
Link them in General Ledger Parameters:
- General Ledger > Ledger Setup > General Ledger Parameters
- Under the Public Sector tab, select the correct posting definitions for year-end close

After this, try running the Purchase Order Year-End Close process again.

2. Understanding Purchase Order Year-End Close in Public Sector

Yes, in Public Sector, the Purchase Order Year-End Close process is required if budget carry-forward is not enabled (which is your case). It closes outstanding POs and releases budget reservations.

Steps to Run the Purchase Order Year-End Close

Go to: Budgeting > Periodic Tasks > Purchase Order Year-End Process
Select the fiscal year to close
Ensure you have the correct year-end closing parameters:
- "Include carry-forward amounts" should remain unchecked (since you do not carry forward funds)
- Ensure purchase orders are fully matched (received/invoiced POs should be completed)
Click OK to run the process

✅ If you still encounter errors, check that your purchase orders have the appropriate budget reservations and fund balances aligned.

3. General Order of Year-End Close in Public Sector

For a smooth close, follow this sequence:

Step 1: Close Purchase Orders

Run Purchase Order Year-End Close to clear commitments from the budget

Step 2: Close Accounts Payable & Accounts Receivable

Ensure all invoices and payments are posted
Verify that there are no pending vendor or customer transactions
Run aging reports to reconcile balances

Step 3: Inventory and Fixed Assets

Ensure all inventory transactions are posted
Run depreciation for Fixed Assets and post adjustments if necessary

Step 4: Close General Ledger Periods

Verify all subledger modules are closed
Close each period/month in General Ledger > Periodic Tasks > Period Close

Step 5: Run Year-End Close for General Ledger

Go to: General Ledger > Periodic Tasks > Fiscal Year Close > Year-End Close
Select the correct ledger accounts for retained earnings
Run the process with the option to create opening transactions

Troubleshooting

Error Persists: Double-check posting definitions for both closing and opening entries. Ensure they are assigned to the correct Posting Type (e.g., "Purchase order year-end close").
PO Year-End Close Fails: Confirm all POs are in a final state (approved/invoiced) and no open workflows exist.

Final Checklist

✔ Posting definitions for year-end close and opening entries are correctly set up
✔ Purchase order year-end close process is completed
✔ All subledger transactions (AP, AR, Inventory, Fixed Assets) are posted
✔ All periods are closed before running the fiscal year-end close
✔ Year-End Close process is run with correct retained earnings account selection

Next Steps

Fix Posting Definitions as mentioned in Section 1
Retry the Purchase Order Year-End Close process
Follow the structured year-end close order to avoid missed steps

This should resolve your issue and help you successfully close the fiscal year. Let me know if you need further clarification! 🚀

Community site session details

Public Sector Fiscal Year-End Close - Questions

Public Sector Fiscal Year-End Close in Dynamics 365

1. Correcting the "Posting Definitions for Closing or Opening Entries" Error

Solution: Define Posting Definitions for Year-End Closing Entries

2. Understanding Purchase Order Year-End Close in Public Sector

Steps to Run the Purchase Order Year-End Close

3. General Order of Year-End Close in Public Sector

Step 1: Close Purchase Orders

Step 2: Close Accounts Payable & Accounts Receivable

Step 3: Inventory and Fixed Assets

Step 4: Close General Ledger Periods

Step 5: Run Year-End Close for General Ledger

Troubleshooting

Final Checklist

Next Steps

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Community site session details

Public Sector Fiscal Year-End Close - Questions

Public Sector Fiscal Year-End Close in Dynamics 365

1. Correcting the "Posting Definitions for Closing or Opening Entries" Error

Solution: Define Posting Definitions for Year-End Closing Entries

2. Understanding Purchase Order Year-End Close in Public Sector

Steps to Run the Purchase Order Year-End Close

3. General Order of Year-End Close in Public Sector

Step 1: Close Purchase Orders

Step 2: Close Accounts Payable & Accounts Receivable

Step 3: Inventory and Fixed Assets

Step 4: Close General Ledger Periods

Step 5: Run Year-End Close for General Ledger

Troubleshooting

Final Checklist

Next Steps

Helpful resources

News and Announcements

Quick Links

Responsible AI policies

Mansi Soni – Community Spotlight

Congratulations to the July Top 10 Community Leaders!

Subscribe to this forum!

Select categories

Leaderboard > Finance | Project Operations, Human Resources, AX, GP, SL

Featured topics

Product updates