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General Ledger

WHAT DOES CLOSING GENERAL LEDGER DO ?

During the year-end closing routine, all the records that will be moved are put in a temporary table before they are moved to the Account Transaction History table.

STEPS TO FOLLOW

Step 1: Complete the posting procedures and the closing procedures for other modules

Follow these steps if the General Ledger module is integrated with other modules.

• If the General Ledger module is not integrated with other modules, skip this step.
• Post final transactions in all the modules except the General Ledger module
• Complete the month-end procedure and the quarter-end procedure for all the modules except the General Ledger module
• Complete the year-end closing procedures for each module in the following order:
  • Inventory;
  • Receivables Management; and
  • Payables Management:

Step 2: Post the final adjusting entries in the General Ledger module

• Adjusting entries include all entries that correct errors that were made when transactions were recorded.
• Adjusting entries also include journal entries that are used to assign revenues or expenses to the period in which the revenues were earned or in which the expenses were incurred.
• Use the Transaction Entry or Quick Journal Entry window to make adjusting entries in the General Ledger Module.
• Make adjusting entries to allocate revenue, expenses or depreciation to the year that you are closing.

Step 3: Print an account list to verify the posting type of each account

• The posting type determines whether an account is closed to the retained earnings account or whether an account brings a balance forward to the next fiscal year.
• Set the posting type to Balance Sheet to bring forward the account balances.
• Set the account balance to Profit and Loss to close to retained earnings A/c.
• Use the Account Maintenance window to change the account posting type.
• To Print the accounts list: Navigate To: Financial>>Reports>>Accounts>>All Accounts Report

Step 4: Close the last period of the fiscal year (Optional)

• Use the Fiscal Periods Setup window to close any fiscal periods that are still open for the year.
• This prevents transactions from being posted to the wrong period or year. Navigate To: Tools>>Setup>>Company>> Fiscal Periods

Step 5: Perform file maintenance on the Financial series group modules (Optional)

• Run the check links procedure on the financial series group of modules. Navigate To: Microsoft Dynamics GP menu>>Maintenance>>Check Links

Step 6: Verify the settings in the General Ledger Setup window

• Click on the Accounts and Transactions check box in the Maintain History area of the General Ledger Setup window to keep the historical records
  • The account history lets you print financial statements and calculated budgets from historical information.
  • The transaction history lets you print detailed historical trial balances. The transaction history also lets you view the transaction details.
• Both the account history and the transaction history are updated during the year-end closing routine if these check boxes are selected.

Step 7: Make a backup

• Make a backup of all company data, and then put the backup in safe permanent storage.
• The backup gives you a permanent record of the company’s financial position at the end of the year.
• The backup can then be restored later if it is required. Navigate To: Microsoft Dynamics GP>>Maintenance>>Backup

Step 8: Print a final Detailed Trial Balance report

• Use the Trial Balance Report window to print a year-end Detailed Trial Balance report.
• Navigate To: Reports>>Financial>>Trial Balance

Step 9: Print year-end financial statements

• Print any year-end financial statements that are required. The most common financial statements include the following:
  • Balance Sheet;
  • Profit and Loss Statement;
  • Statement of Cash Flows; and
  • Statement of Retained Earnings:

Step 10: Set up a new fiscal year

• Setup the new fiscal year by using the Fiscal Period Setup window before the year-end closing routine is performed. Navigate To: Tools>>Setup>>Company>>Fiscal Periods

Step 11: Close the fiscal year

• To close the fiscal year, Navigate To: Financial>>Routines>>Year-End Closing
• Specify an account in the Retained Earnings Account box

Step 12: Close all fiscal periods for all series (Note: This step is optional)

• Use the Fiscal Periods Setup window to mark all periods for all series as closed, after the closing procedures for all modules are complete.
• We recommend that you do this to prevent transactions from being posted from any module to any period that you closed.
• After a period is marked as closed, transactions cannot be posted to the period unless you reopen the period. Later, if you must post a transaction to a closed period, return to the Fiscal Periods Setup window to reopen the period. Navigate To: Tools>>Setup>>Company>> Fiscal Periods

Step 13: Adjust budget figures for the New Year and print financial statements

• Adjust budget figures by using one of the following windows:
  • Excel-Based Budgeting
  • Budget Maintenance
  • Single-Account Budget Maintenance

Step 14: Adjust budget figures for the New Year, and print financial statements

Step 15: Make a backup

• Make a backup of all company data, and then put the backup in safe permanent storage.
• The backup gives you a permanent record of the company’s financial position at the start of the New Year.
• This backup can be restored later if it is required.

Payables Management

WHAT DOES CLOSING PAYABLES MANAGEMENT DO ?

• The Payables Management procedures transfer current-year balances to last year’s balance and clear out the current-year balances.
• There are two closing procedures for Payables Management—fiscal year and calendar year. Both the calendar and fiscal year must be closed even if only fiscal periods is being used

STEPS TO FOLLOW

Step 1: Post all transactions for the year

• Post all transactions for the year before the year is closed.
• If you want to enter future period transactions before you close the year, create a new batch for the future period transactions.
• Save the future period transactions in the new batch, but do not post the new batch until after the year has been closed.

Step 2: Print the Aged Trial Balance with Options report

• Print a paper copy of the Aged Trial Balance with Options report to keep with year-end permanent financial records.
• Navigate To: Dynamics GP>>Purchasing>Reports>Trial Balance. In the Reports list, click Aged Trial Balance with Options

Step 3: Print the Vendor Period Analysis report

• Print a paper copy of the Vendor Period Analysis report to keep with year-end permanent financial records. To do this, follow these steps:
• Navigate To: Dynamics GP>Purchasing>Reports>Analysis. In the Reports list, click Period

Step 4: Make a backup that is named Pre-1099 Edits

• Create a backup and then put the backup permanent storage.
  • The backup lets you recover data quickly if a power fluctuation or other problem occurs during the year-end closing procedure.
• Follow the below steps to create a back up in Microsoft Dynamics GP:
• Microsoft Dynamics GP>>Maintenance>>Backup
• Change the path of the backup file if it is required
• Click OK.

Note: It is recommended that you name this backup “Pre-1099 Edits” to differentiate it from other backups

Step 5: Verify the 1099 information and edit it if it is required

• Print the 1099 Edit List. On the File menu, click Print.

Step 6: Print the 1099 statements

• Print the 1099 Statements. Navigate To: Purchasing>>Routines>>Print 1099

Step 7: Make a backup that is named “Pre Year-End”

• Create a backup, and then put the backup in safe, permanent storage.
• Follow the below steps to create a back up in Microsoft Dynamics GP:
  • Microsoft Dynamics GP>>Maintenance>>Backup (Select Company name in the Company Name list)
  • Change the path of the backup file if it is required
  • Click OK.

Note: It is recommended that you name this backup “Pre-Year End” to differentiate it from other backups

Step 8: Close the year

• Navigate To: Purchasing>>Routines>>Year-End Close
  • If you are closing both your fiscal and calendar year at the same time, click All.
  • If you are just closing your calendar year, click Calendar.
  • If you are just closing your fiscal year, click Fiscal.
• Click to select the Print Report check box, and then click Close Year.

Step 9: Close the fiscal periods

• Navigate To: Microsoft Dynamics GP menu>>Tools>>Setup>> Company>>Fiscal Periods
• Click to select the Purchasing check box for the Period that you must close.

Step 10: Close the tax year

Note: This procedure should only be completed after you have completed the year-end closing procedures for all sales and purchasing modules.

• To close the tax year, follow these steps:
  • Navigate To: Microsoft Dynamics GP menu>>Tools>>Routines>> Company>>Tax Year-End Close
  • Click to select the Close Year check box and the Print Report check box.
  • Click Process. Click ‘YES’ when you are prompted to continue with the year-end close.

Step 11: Make a backup that is named “Post Year-End”

• Create a backup and then put the backup in safe, permanent storage.
• Follow the below steps to create a back up in Microsoft Dynamics GP:
  • Microsoft Dynamics GP>>Maintenance>>Backup. (Select Company name in the Company Name list)
  • Change the path of the backup file if it is required
  • Click OK.

Receivables Management

WHAT DOES CLOSING RECEIVABLES MANAGEMENT DO ?

• The Receivables Management procedures transfer current-year balances to last year’s balance and clear out the current-year balances.
• There are two closing procedures for Receivables Management—fiscal year and calendar year. Both the calendar and fiscal year must be closed even if only fiscal periods are being used.

STEPS TO FOLLOW FOR CLOSING THE CALENDAR YEAR<

• Use the Receivables Year-End Closing window to close the calendar year to update information that is displayed in the Customer Finance Charge Summary window. Make a backup of all company data. Navigate to: Dynamics GP>>Tools>>Routines>>Sales>>Year-End Close
• Mark All, if the calendar year coincides with your fiscal year.
• If the periods do not coincide, close the fiscal year separately
• Mark Print Report to print the Year-End Closing Report when the closing process is complete.
• Save this report to be part of the audit trail.
• Choose Process to begin the closing process.
• Close the fiscal periods for the Sales series using the Fiscal Periods Setup window. Navigate To: Dynamics GP>Tools>Setup>Company>Fiscal Periods Setup

STEPS FOR CLOSING THE FISCAL YEAR

• Use the Receivables Year-End Closing window to close the fiscal year to update information that is displayed in the Customer Finance Charge Summary window. Make a backup of all company data. Navigate to: Dynamics GP>>Tools>>Routines>>Sales>>Year-End Close
• Mark Fiscal to close the fiscal year.
• If your calendar and fiscal years coincide, you can close them at the same time by marking All
• Mark Print Report to print the Year-End Closing Report when the closing process is complete.
• Save this report as this report is part of audit trail.
• Choose Process to begin the closing process.
• Close the fiscal periods for the Sales series using the Fiscal Periods Setup window. Navigate To: Dynamics GP>Tools>Setup>Company>Fiscal Periods Setup

STEPS FOR CLOSING THE TAX YEAR

• Use the Tax Year-End Closing window to prepare your tax records for a new year.
• When you close the tax year, the accumulated year-to-date tax totals in the Tax Detail Maintenance window are cleared and transferred to last year’s tax totals.
• Separate year-to-date tax totals can then be recorded for the New Year.
• Any tax amounts entered after closing the tax year are added to the new year-to-date total.
• Closing a tax year affects all the tax details entered for the year. Navigate To: Dynamics GP>>Tools>>Routines>>Company>>Tax Year- End Close to open the Tax Year-End Closing window.
• Mark Close Year as tax year cannot be closed unless the ‘close year’ option is marked.
• Mark Print Report to print the Tax Year-End Closing Report when the closing process is complete.
• This report shows year-to-date and last year’s tax amounts as they appeared in the Tax Detail Maintenance window before the tax year was closed.
• Save this report as part of audit trail.
• Choose process to begin the closing process

Inventory Series

WHAT DOES CLOSING INVENTORY SERIES DO ?

• Closing a year transfers all summarized current-year quantity, cost and sales amounts to transaction history for the items for which you have been keeping summarized Sales History.
• This procedure also updates the amount in each item’s Beginning Quantity field to the Quantity on Hand field at each site.

STEPS TO FOLLOW

Step 1: Post all transactions for the year

Be sure that all Invoicing, Sales Order Processing and Inventory transactions for the current year have been entered and posted before year is closed. This is important to ensure that historical information is accurate for the year being closed and year-to-date amounts are accurately stated for the New Year.

If you want to enter future-period transactions before closing the year, create a new batch with new transactions, but do not post it until after the year has been closed.

Step 2: Reconcile Inventory Quantities

Use the Reconcile Inventory Quantities window to ensure that Inventory Control data has not become damaged over the course of the year.

Navigate to: Inventory>Utilities>Reconcile

Be sure that all Invoicing, Sales Order Processing and Inventory transactions for the current year have been entered and posted before year is closed. This is important to ensure that historical information is accurate for the year being closed and year-to-date amounts are accurately stated for the New Year.

If any differences are found during the reconcile process, the quantities will be adjusted. If adjustments are made, they will be reflected on the Reconcile Report, together with any serial numbers and lot numbers that were added for the adjusted items. If you want to edit these serial numbers and lot numbers, you can use the Item Transaction Entry window to make adjustment transactions.

Navigate to: Inventory>>Transactions>> Transaction Entry

Step 3: Complete a Physical Inventory count and post any adjustments

• Stock Calendar: Use this to set up and maintain information about when stock counts can be performed, and which days will be recounted when the system calculates suggested dates for the next stock count for a specific item-site combination.Navigate to: Tools>>Setup>>Inventory>>Stock Calendar
• Stock Count Cycle Assignment: Use this to assign one stock count frequency to many items.Navigate to: Cards>>Inventory>>Count Cycle Assignment.
• Stock Count Schedule: Creates a list of the specific items at a specific site that will be counted during a specific count. When you start a stock count schedule, the quantity on hand for each line in the stock count schedule is captured. Later, the actual count number quantities will be compared to the captured values to create default variance transactions. Stock Count Forms can be printed during this process. Navigate to: Transactions>>Inventory>>Stock Count Schedule
• Stock Count Entry: Use this to enter information about the results of your stock counts. When you process a stock count, variance transactions are created. If the Auto-post Stock Count Variances check box is marked, the transactions will also be posted.Navigate to: Transactions>> Inventory>>Stock Count Entry
• Physical Inventory Checklist: Print a Physical Inventory Checklist using the Inventory Activity Reports window and perform a physical count of your Inventory Items to verify that quantity on hand amounts are accurate for all Items.Navigate to: Inventory>>Reports>>Activity>>Inventory Activity Reports
• Ensure no difference exists. If difference still exists, enter the necessary adjustments in the Item Transaction Entry window, and then post the transactions.

Step 4: Print additional reports:

• Print any additional reports you will need for planning or your permanent records.
• Generally the below reports will be good to be printed via Inventory>>Reports:
  • Stock Status Report;
  • Purchase Receipts Report;
  • Turnover Report;
  • Transaction History Report;
  • Serial Number List; and
  • Lot Number List:

Step 5 – Backup

• Make a backup of all company data.

Step 6: Close the year:

• Use the Fiscal Periods Setup window to close any fiscal periods that are still open for the year.Navigate to: Microsoft Dynamics GP>>Tools>>Setup>>Company>>Fiscal Periods Setup
• Stops the user from posting to wrong period or year.
• Ensure all transactions for the period and year for all modules before closing fiscal periods have been posted.
• Re-open the Fiscal Periods Setup window, in case you later need to post transactions to a fiscal period you have already closed.

This post is written by Shrikant Indavar. Shrikant is a Senior Business Analyst in the Microsoft Dynamics GP Practice at Ignify. Ignify is a Global Microsoft Dynamics Inner Circle Partner specializing in Microsoft Dynamics ERP for RetailDistribution, Manufacturing and Chemicals verticals. For help on Microsoft Dynamics ERP email us at dynamics@ignify.com