Fiscal Year Closing Procedures.doc

8/10/2019 Fiscal Year Closing Procedures.doc

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CLOSE YEAR PREREQUISITES

In order to ensure a smooth transition of closing your fiscal year to opening a new, Pentagon 2000Software has recommended prerequisites to accommodate your accounting practices close yearprocess. Although the Pentagon 2000 Software has an automatic and systematic way of closingthe fiscal year, there are many transactions to be analyzed and entered and reports to run in order

to correspond with the general accounting practices inoled in closing a fiscal year.

!ere are some special notes and rules good to "now before you proceed#

NOTE: In the new year you can edit or update any $% &odes if necessary.

NOTE: If you do not close the year, you can continue to post into future dates, the system willprompt you with a warning message but will not stop you.

NOTE: 'ou can run financial reports only for the date range that is in your current fiscal yearsetup( i.e. you cannot run financial reports for the ne)t year if you did not close the current year,

but you can run the *$eneral %edger +ransactions ournal- report for any date range at any time.

NOTE: If you close the year, you cannot run financial report for the preious, closed year. a"esure you hae copy of the financial reports prior to closing.

Step 1 Document Posting / Test Posting: In the /inancials enu under $eneral %edger &lose'ear, you will see the option to test 1post each type of transaction.

• +est ournal 3ntries# manual entries to the $4%

• +est Stoc" 5pdates# manual ad6ustments to stoc" 1cost 4 qty

• +est 7isbursements# accounts payables

• +est 8eceipts# accounts receiable

• +est 9endor 8eceiers 1when applicable# unouchered inentory• +est 9endor Inoices# purchase inoices

• +est 9endor &laims 1debits# returns to endor

• +est &ustomer Inoices# sales inoices

• +est 8A:s 1credits# returns from customer

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If all transactions tested hae been posted to the $4%, you will receie the following message#

&lic" ;< to continue to the ne)t transaction to test.

NOTE: If any transactions hae not been posted to the $4% for the period or year you are testing,you will be prompted for *;pen 7ocuments- upon closing. *;pen- meaning not posted to the $4%.

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NOTE: If you clic" ;< to the Information message you would receie for open transactions, youwill get a list of these transactions which you can then decide what to do with.

Step 2 Cose Pe!io"s: $o to the /inancials = Administration = Accounting Setup and ma"e sureall Periods are *&losed-. +o close a period, you must increase the *&urrent- period.

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NOTE: If you try to Pre&lose or &lose the /iscal 'ear without closing the Periods, you will receiethe following message, prompting you to close them before you proceed.

Step # Ret$ine" E$!nings: &hec" to ma"e sure the 8etained 3arning $eneral %edger &ode iscorrectly defaulted in the Accounting Setup. +his &ode will be used to automatically calculate theyear end net income into 1sales = costs = e)penses.

Step % &e!i'( )egin )$$nce Reco!"s: 'ou must chec" to ma"e sure each $eneral %edger &odehas only one >udget Plan 4 >egin >alance 8ecord per &ompany 4 7iision 4 7epartmentcombination 1where multiple &ompany 4 7iision 4 7epartment enironments apply. If you arewor"ing in a single &ompany enironment with no 7iisions or 7epartments, there will need to beonly one >udget Plan 4 >egin >alance 8ecord per $eneral %edger &ode.

$o in the /inancials = Administration = $4% &odes = >udget Plan 4 >egin >alance and ma"e surethere are no duplicate records per $% &ode.

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NOTE: If you try to Pre&lose or &lose the /iscal 'ear without erifying the duplication, you willreceie the following message, prompting you to fi) the duplication manually before you proceed.

Step * Run +in$nci$ Repo!ts: Sae to file and print hard copies of any necessary /inancial8eports. !ere are some suggestions reports =

• >alance Sheet

• Income Statement

• +rial >alance

• Account Aging 8eports 1for A48 and A4P

• Inentory 9alue As ;f

Step , )$c- Up D$t$.$se: ?e highly recommend you hae a full, current bac" up of yourPentagon 2000 Software S@% 7atabases after all &losing Prerequisite Steps are ta"en and 4 orright before you Pre &lose or &lose 'ear. &ontact your I+ Administrator or Pentagon 2000Software +echnical Support if you need assistance with this step.

PRECLOSE YEAR PROCEDURES

+he Pentagon 2000 Software also has the option to Pre&lose the /iscal 'ear for an unlimitedamount of time needed prior to final closing. +his method is beneficial to help erify the balances

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will forward correctly as well as to gie the users the ability to post into a new fiscal year with thepreious year set aside awaiting final auditing transactions and ad6ustments.

?e recommend the &lose 'ear Prerequisite Steps are ta"en, 6ust as you would need to do to for afinal close, for the Pre&lose /iscal 'ear process.

Step 1 Cose Ye$!: In the /inancials enu under $eneral %edger &lose 'ear, doubleclic" onPre&lose 3nd of 'ear =

Step 2 Open T!$ns$ctions: If there are any open transactions dated the fiscal year you are aboutto preclose, you will be prompted with a window listing the open transactions. !oweer, once thetest has been done as per the &lose 'ear Prerequisites, you will not receie this message unlessthe open transactions can be bypassed. If the open transactions can be bypassed, clic" ;< tocontinue or go bac" to the &lose 'ear Prerequisites Step .

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'ou must then confirm you hae done the &lose 'ear Prerequisites, clic" ;< to continue#

!ere is a list of what the Pentagon 2000 Software will systematically do when you proceed withPre&losing a 'ear#

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a"e sure no users are logged into the database, especially using the /inancials odule#

+he Pentagon 2000 Software will process the Pre&lose 'ear#

;nce the process is complete, you will receie the following message#

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&lic" ;< to proceed to e)it the Pentagon 2000 Software

NOTE: ;nce a year has been *Pre&losed-, transactions can be posted bac" into it according tothe flag in Accounting Setup as shown#

CLOSE YEAR PROCEDURES

;nce all of the &lose 'ear Prerequisite Steps are ta"en, you can then proceed with &losing the'ear in the Pentagon 2000 Software.

Step 1 Cose Ye$!: In the /inancials enu under $eneral %edger &lose 'ear, doubleclic" on&lose 'ear =

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Step 2 Open T!$ns$ctions: If there are any open transactions dated the fiscal year you are aboutto close, you will be prompted with a window listing the open transactions. !oweer, once the testhas been done as per the &lose 'ear Prerequisites, you will not receie this message unless theopen transactions can be bypassed. If the open transactions can be bypassed, clic" ;< tocontinue or go bac" to the &lose 'ear Prerequisites Step .

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'ou must then confirm you hae done the &lose 'ear Prerequisites, clic" ;< to continue#

!ere is a list of what the Pentagon 2000 Software will systematically do when you proceed with&losing 'ear#

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+he Pentagon 2000 Software will process the &lose 'ear#

;nce the process is complete, you will receie the following message#

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&lic" ;< to proceed to e)it the Pentagon 2000 Software

NOTE: ;nce a year has been closed, transactions cannot be posted bac" into it.

PROCEDURES +OR 0ANUAL CALCULATION YEAR END CLOSE

5se this alternate method of closing the fiscal year if you would rather calculate the balancesmanually.

BB If you hae ulti &ompany, run the reports and calculations per company BB

. 8un the +rial >alance report as of the end of year.

2. &lose the year in the /inancials enu.

>egin balance for the Cew 'ear#

. &odes ,2,D remain the same as the ending of last year

2. &odes EF reset to 0.00

D. 8etained 3arnings calculation#

G%ast 'ear 8etained 3arningsH G1+otal of %ast 'ear 3nding >alance of codes E 1+otal &odes JKJLJMJFH

G8etained 3arnings alue for the Cew 'earH

NE3 +ISCAL YEAR

In the Accounting Setup = chec" to see if the new /iscal 'ear and Periods are correct.

8un a +rial >alance as of the >egin of the /iscal 'ear to ensure the >egin >alances were carriedforward from the 3nding >alances( also confirm any other necessary /inancial 8eports.

'ou can iew any Preious &losed 'ears in the Accounting Setup = ;ptions#

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NOTE: A *&losed- fiscal year will reflect the &urrent ;pen /iscal 'ear and the /iscal Periods asthe same, the new year as shown#

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NOTE: A *Pre&losed- fiscal year will reflect the &urrent ;pen /iscal 'ear as the year you haenot closed and the /iscal will reflect the new year as shown#

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+he system will as" you to confirm this process, clic" 'es to continue#


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+he system will then process the 8eopening of the last closed /iscal 'ear#

;nce the process is complete and successful you must log out and bac" in again in order for thechanges to ta"e into effect#

NOTE: ;nce you reenter the system, go to the Accounting Setup to erify your preiously closedyear is now open and run a +rial >alance.

Cose P!ocess C4ec-ist

Acti5it(

P!eCose

Cose Ope!$tions

Sign ;ff all echanics = 3+S

&lose &ustomer ?or" ;rders

&lose In!ouse ?or" ;rders

&lose ;4S ?or" ;rders if receied

Post ?IP %abor and ?IP Parts 1whereapplicable

S$es Documents

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5pdate all Pic" +ic"ets

Approe Sales Inoices

Approe 8A &redits

Pu!c4$sing Documents

5pdate all 8eceiers

Approe all Purchase and isc 9endorInoices

Approe &laim 7ebits

Accounts Recei5$.e

7eposit all A48 &hec"s and &ash receipts

&lose all Accounts 8eceiable receipts

Accounts P$($.e

&lose all Accounts Payable 7isbursements

In5ento!(

5pdate and &lose all manual Stoc" Ad6ustments

+in$nci$s

3nter and &lose all final 3mployee 3)pense 4Payroll ournal 3ntries

3nter and &lose all final other ournal3ntries i.e. accumulated depreciation, ban"fees, ad6ustments, write offs.

Cose

Post all documents to the $eneral %edger &lose the /iscal Period in Accounting Setup

PostCose

Repo!ts

8un /inancial 8eports

8un ;peration 8eports

8un Sales 8eports

8un Purchasing 8eports

8un Inentory 8eports

+in$nci$s

>an" 8econciliation

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