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A number of our customers have requested we provide them a list of procedures necessary to close their fiscal accounting year. All of the information is covered throughly in the MCBA user's manuals but it is indeed scattered between books and several chapters. The purpose of this document is to provide our customers with a concise list of procedure steps to follow with each step referencing the related user manual pages.
It is very important that ALL of your Quantum data is backed up before you run any year-end closing procedure. Most of the Fiscal Year-End items will relate to the General Ledger module. The other modules may have one or two things to consider:
Accounts Payable : Section 9 of the A/P User's Manual contains information on year-end and fiscal year-end closing. If your fiscal year is different than your calendar year then you may want to run Clear YTD Accumulators for Purchases and Discounts. The 1099 figures (Vendor Amount Paid) is only cleared at calendar year-end.
Accounts Receivable : Section 8 of the A/R User Manual contains information on year-end closing. These procedures are run only if your fiscal year ends at the same time your calendar year end.
Payroll : There is no fiscal year end processing that needs to take place in this module.
Fixed Assets : There is no fiscal year end processing that takes place in the fixed asset module. There are calendar year-end processes that can be found in the section 7 of the User's Manual.
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General Ledger : The year-end procedure is covered in detail in section 10.5 of the G/L user's manual. What is not completely clear from the manual is exactly when to run the year-end procedure. The reason for this is because the procedure can be run at the actual fiscal year end close or later in the new fiscal year after final adjusting entries have been made. The latter option seems to be the most popular with our clients.
Option 1 : Roll Forward Method
(Actual Year-End Close Performed Later after Adjusting Entries)
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Accounting Calendar Roll Foward: move the entire accounting calendar forward one year by typing in the first period and pressing tab. It should automatically change the year for each period you have defined in your accounting calendar. Also change the "current period" to the first period of the new fiscal year and proceed to operate as normal.
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When the auditors have finished and have presented you with the final adjustments, make certain all users have finished and posted any General Journal transactions. Then you will roll the accounting calendar "back" to the fiscal year that needs to be closed. This is done by typing in first period in the accounting calendar and pressing Tab -- all the other periods should automatically revert back to the previous year
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Make the adjusting entries through General Journal transaction processing, run your edit list and post. Do NOT make any adjusting entries to your Funds Balance or Retained Earnings accounts -- year-end closing will do that automatically. You may have to change the "earliest allowed transaction date" in the G/L control file to remove the "hard close" from that fiscal year. You may also need to change the "current period" in the accounting calendar to reflect the last period of that fiscal year.
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Print whatever year-end financial reports you need to review and verify that your books are consistent with everyone's expectations (basically you and your auditors). If they are not corrent then run Recalculate Financial Summaries and run them again.
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After the reports are correct you are ready to run the Year-End Procedure as described in section 10.5 of the G/L User's Manual. You will need to have your Retained Earnings or Funds Flow account number ready for the procedure. DO NOT roll the accounting calendar forward by hand -- this process will do it automatically. When finished running year-end then run the Recalculate Financial Summaries program again.
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Adjust the accounting calendar's "current period" back to the proper current period and re-run your financial statements to verify all is well with your books. You will see the finalized Funds Flow / Retained Earnings figure on your balance sheet.
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You are ready to resume normal processing.
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Option 2 : ReClose Option:
(Close Now : Reopen Later and Close Again)
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This other option is where you run Year-End Closing at the end of the actual fiscal year and then re-open the fiscal year, make your adjusting entries and re-run the Year-End Closing procedure. This method is used most often when there are several months inbetween the end of the fiscal year and your auditor's getting to you the final adjusting entries. Here are the steps:
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Make certain you have posted all General Journal Transactions and interfaced all transactions that relate to this fiscal year from your subledgers.
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Perform the Year-End Close procedure. Operate as you normally would and wait for the final adjusting entries.
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When you are ready to enter the final adjusting entries you should make certain all general journal transactions are posted and then manually move the accounting calendar "back" to the fiscal year you closed out in step #1. Also change the current period to reflect the last period of that fiscal year (should be the period you are entering the final adjusting entries into). Enter your final adjusting entries, print an edit list and then post them.
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If all is well then run the Year-End Closing procedure again for that fiscal year. It will post the net change to your Funds Flow Balance / Retained Earnings and roll your accounting calendar forward. Basically follow steps 3, 4, 5, 6, 7 from the first option above.
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Other Considerations: Don't forget about your Budgets : you may wish to copy last fiscal year's budgets into a new one. Make changes to any budget items you wish and then don't forget to "repoint" your financial statement specifications to that new budget code. If you have lots and lots of financial statement specifications then you will want to use Geneva's "SWITCH BUDGET CODES" program. That is where you enter the old budget code and the new budget code and the program switches statement specifications budget codes to from old to new. This saves a lot of time -- especially if you have to switch back and forth between fiscal year budget reports.
Also consider the G/L control file : Earliest Allowed Trx Date. If you wish to "hard close" the fiscal year you just finished - then make this date at least the first date of the first period in the new fiscal year.
TIPS AND POINTERS:
Don't forget to double-check your G/L chart of accounts. Make certain you have all your balance sheet accounts designated as "Balance Sheet" related and all your Income Statement accounts designated as "Profit & Loss Statement" related. Quantum's year-end closing procedure will use the P&L accounts to arrive at a Funds Balance / Retained Earnings figure and will zero out the beginning balances. If you have accounts that are not designated correctly then your funds flow / retained earnings figure will be incorrect. |
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