If you are a regular user of Dynamics GP, it goes without saying but at some point, you will be looking to complete the Year End routines for the General Ledger in Dynamics GP. This can often prove troublesome as it can get complicated if you don’t understand the process of doing so in your Dynamics GP system.
Therefore, in our latest blog article, we will take you through the steps required to successfully perform Year End routines for the General Ledger in Dynamics GP.
Step 1: Finish the posting procedures and the closing procedures for other modules (follow the order below)
Please note: You will only need to complete this step if your General Ledge is fully integrated with other modules. If the General Ledger is not fully integrated, then you can skip this step.
A) Simply post final transactions in all the modules except in the General Ledger.
B) Finish the month-end routine and the quarter-end routines for all the modules apart from the General Ledger
C) Finish the year-end closing routines for each module by following the order below:
- Inventory
- Receivables Management
- Payables Management
- Fixed Asset Management
- Analytical Accounting
- You will find that this functionality was introduced on version GP 10.0 SP2 to allow you to consolidate balances for dimensions in Analytical Accounting. Go to this link to ensure that you have correctly identified the dimensions that you wish to be consolidated during the year-end routines. It is important to note that there isn’t a separate year-end process that needs to be completed in the Analytical Accounting module. After the year-end process has been completed in the General Ledger it will automatically consolidate the balances and then move the transactions to Analytical Accounting for dimensions that were correctly marked. Furthermore, we strongly advise you to make sure that your AA data correctly matches GL data by executing the scripts in this link before you close the General Ledger year.
Step 2: Post the final adjusting entries in General Ledger
The adjusting entries will include all of the entries that correct errors that were completed when transactions were recorded. The adjusting entries will also include journal entries that are used to assign revenues or expenses to the period where the revenues were earned or where the expenses were incurred.
If you need to make any adjusting entries to allocate revenue, expenses or depreciation to the year in which you are closing, please go to the Transaction Entry window or Quick Journal window to make adjusting entries in General Ledger.
If you need to track initial adjusting entries or post audit entries that are completely separate from other fiscal periods, auditing periods can be created in the General Ledger. This feature will allow you to separate tracking of the adjusting entries that are added after the year has been closed.
Follow this link to find out how to setup adjusting periods in the GL in Dynamics GP.
Step 3: Print an account list to verify the posting type of each account
The posting type helps to identify whether an account is closed to the retained earning account or whether an account brings a balance forward to the next fiscal year. If the account balance will be brought forward at the end of the year, the posting type will need to be set to ‘Balance Sheet’. If the account balance will be closed to a retained earnings account at the end of the year, the posting type will need to be set to ‘Profit and Loss’. Make sure that you use the Account Maintenance window if you need to change the posting type for an account.
Go through the steps below to successfully print out an account list:
A) Go to the ‘Reports’ menu in Dynamics GP, then click on ‘Financial’ and then go to ‘Account’.
B) Within the ‘Reports’ list, pick ‘All Accounts’ and then select ‘New’.
C) Within the ‘Option’ box, type all accounts.
D) From here, hit the Inactive Accounts checkbox.
E) Pick ‘Destination’ to specify a report destination, then simply hit ‘OK’.
F) Pick the ‘Print’ option.
Step 4 (Optional): Close the last period of the fiscal year
The way to close the last period of the fiscal year is to go to ‘Tools’ then ‘Setup’ followed by ‘Company’ and then ‘Fiscal Periods’ to stop users from posting to the prior year when you are in the process of closing it and rolling balances forward.
You can make use of the Fiscal Periods Setup window to close all fiscal periods that are still open for the year. This enables you to prevent transactions from being posted to the wrong period/year.
Please note: Ensure that you have posted all the transactions for the period and for the year for all modules before you close the fiscal periods.
Step 5 (Optional): Perform file maintenance on the Financial series group of modules
In order to run the check links routine on the Financial series group of modules simply go to Microsoft Dynamics GP then select ‘Maintenance’ followed by ‘Check links’ then ‘Financial series’.
Please note: Once you check links this process cannot be reversed, so please do make sure that you run this in a TEST company first and review the report to ensure that you are happy with all the changes made and aren’t surprised. If you need Advantage to setup a TEST company please get in touch.
Step 6: Verify the settings in the General Ledger Setup window
If you would like to have historical records, you need to pick the ‘Accounts’ checkbox and the ‘Transactions’ checkbox in the ‘Maintain History’ part of the General Ledger Setup window. The account history will allow you to print financial statements and calculated budgets from historical information. Furthermore, the transaction history will allow you to print detailed historical trial balances as well as being able to view the transaction details. You will find that if these checkboxes are selected, both the account and transaction history is updated during the year-end closing routine.
Step 7: Make sure that you have a backup
Be sure to take a full backup of all company data and then put the backup in a safe and secure storage location. This backup will be a permanent record of the company’s financial position at the end of the year. Better still, should you need it, it can be restored later.
Step 8: Print a final Detailed Trial Balance report
You can use the Trial Balance Report window to print a year-end Detailed Trial Balance report.
Please note: We strongly suggest that you post all transactions for the period and for the year for all modules before you decide to print the Detailed Trial Balance report.
Step 9: Print the year-end financial statements
Print any year-end financial statements where they are needed. The most common of these are as follows:
- Balance Sheet
- P and L
- Statement of Cash Flows
- Statement of Retained Earnings
Step 10: Setup a new fiscal year
Before you can even start the year-end closing procedure, you will need to make sure that the next fiscal year is setup by using the Fiscal Periods Setup window which can be accessed by logging in to Dynamics GP then going to ‘Tools’ followed by ‘Setup’ then go to ‘Company’ and finally select ‘Fiscal Periods’.
Step 11: Close the Year
To complete this process please follow the steps below:
A) Login to Dynamics GP then go to ‘Tools’ then ‘Routines’ next go to ‘Financial’ followed by ‘Year-End Closing’.
B) Select an account within the ‘Retained Earnings Account’ box.
The account that you have selected in the ‘Retained Earnings Account’ box is the account to which the year’s profit and loss accounts are closed. The default account is the account that you selected in the General Ledger Setup window by going to ‘Tools’>>’Setup’>>’Financial’>>’General Ledger’.
You will find that all current-year earnings or current-year losses are transferred to the account that you selected in the ‘Retained Earnings Account’ box. If you would like to distribute the retained earnings for the year to more than one account, you are able to specify an allocation account to distribute the retained earnings amount to the appropriate accounts.
Or if you wish you can transfer the year’s profit or loss to accounts that contain a specific account segment. This process is often referred to as closing a divisional retained earnings account. Follow this link if you wish to learn more.
C) Select the number that you would like to use as the first journal entry number for the next fiscal year in the ‘Starting Journal Entry’ box.
You are able to accept the default number. The default number is one more than the highest journal entry number that is posted for the current year or you can choose to specify a new number. The journal entry number that you specify is used as the journal entry number for the Year-End Closing report.
D) To being the procedure, simply hit ‘Close Year’.
Please note: Only click ‘Close Year’ once! If you keep clicking on it, you will close more than one year during the process. Furthermore, if you find that the progress window appears to stall at 50%, do not under any circumstances restart the routine. If the hard disk is progressing, leave the process still it is complete.
If you choose to maintain the account history, you will find that the year-end closing process transfers all of the current year information for each individual account in the chart of accounts to the account history. If you wish to keep the transaction history, the year-end closing process all transfers all current-year information for each account in the chart of accounts to the transaction history. From this, the process then prepares the accounting system for a new fiscal year. As well as transferring the current year figures to the transaction and account history, the year-end process also completes the following actions:
- The year-end closing process also reconciles and summarises the general ledger balances that have accumulated over the course of the year.
- The year-end closing process also removes accounts that are highlighted as inactive if the accounts match the designated criteria for deleting a posting account. You will find that inactive accounts that have been setup as budget accounts can also be removed if they have not been used for the year. These accounts can also be deleted even if budget amounts from past years are associated with these accounts.
- The year-end closing process moves all profit and loss account balances to the retained earning account.
- The year-end closing routine summarises balance sheet accounts and brings the balances forward as the beginning balances of the account in the new fiscal year.
- The year-end closing process also prints the Year-End Closing report.
After the year-end closing process has been completed, the year-end closing report will be printed. This report will also state the accounts that were closed and the transactions that were created to close those accounts. The year-end closing report forms part of the audit trail. Simply save this report for the company’s permanent records. The year-end closing report cannot be reprinted.
Please note: If you are still using a Microsoft SQL server, and if database maintenance is not automated, we strongly suggest that you look to perform database maintenance after you complete the year-end process. Follow this link to find out how you can do this or just get in touch with Advantage who can do it for you.
Step 12 (Optional): Close all the fiscal periods for all the series
To do this go to ‘Tools’ followed by ‘Setup’ then go to ‘Company’ then select ‘Fiscal Periods’. After you have finished the closing procedures for all the modules, you can use the ‘Fiscal Periods Setup’ window to mark all the periods for all the series as closed. We strongly suggest that you do this in order to prevent transactions from being posted from any module to any period that you have closed. Once a period is marked as closed, transactions will not be posted to the period unless you reopen the period. Furthermore, if you do need to do this further down the line, simply return to the ‘Fiscal Periods Setup’ window to reopen the period.
Step 13: Tweak the budget figures for the new year, and then print the financial statements
You can tweak the budget figures through the use of one of the below:
-
Excel-Based Budgeting which can be accessed by going to ‘Cards’ then ‘Financial’ after this go to ‘Budgets’ then ‘select a budget ID’ then finally select ‘using Excel’.
-
Budget Maintenance which can be accessed by going to ‘Cards’ then ‘Financial’ after this go to ‘Budgets’ then ‘select a budget ID’, then ‘Click Open’ and finally select ‘using Microsoft Dynamics GP’.
-
Single Account Budget Maintenance
At this point, print the ‘Profit and Loss’ statement to verify that profit and loss accounts were closed to the retained earnings account. Print the balance sheet to verify that the balance sheet accounts indicate that the balances were brought forward.
If you are using Advanced Financial Analysis (AFA) to print the financial statements, you will need to update the report layout to reflect the current fiscal year. In order to achieve this, you will need to take the following steps:
- On the ‘Reports’ menu, go to ‘Financial’ then select ‘Advanced Financial’.
- In the ‘Reports’ list, pick the financial statement then go to ‘Open’ then select ‘Layout’.
- Double-click each column button to verify the Column Definition for the column.
- If you find that the column type is set to ‘Period Range’, to ‘Year-to Date’, or to ‘Variable Year-to Date’, simply select the current fiscal year in the ‘Year’ list and then click ‘OK’.
- Repeat the first four bullet points above for each column for each report.
Step 14: Make a full backup
Make a full backup of all the company data and after this put the backup in a safe and secure location. This backup will provide you with a permanent record of the company’s financial position at the start of the new year. This backup can be restored further down the line if you need to.
Next Steps?
If you have reviewed the above part of the year-end process and are struggling to find the time to complete this yourself, you can get one of our leading Dynamics GP consultants to do this for you by getting in touch today.
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