Closing Accounting Periods Delivered Basis

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1 Page 1 of 5 Month-End Closing Overview Two programs require a minimal month end closing procedure. These are the: Inventory Control System Accounts Payable Module Please be sure to make a complete backup copy of your data before closing. Inventory Control System When to Close - The ICS can be closed after the last Daily Sales report for the month has been printed and finalized. The closing should be completed before entering sales invoices for the next month. Before Closing - Make sure your final Daily Sales report for the month has been printed and finalized. You want to print and/or save to the Report Warehouse any of these reports since a few contain information that is reset during the month end closing process: Sales Analysis report (Standard) Sales Analysis (Delivered Sales Report option) Print this report only if you record sales on a delivered basis (from this report comes the COGS entry made in GL). Current Inventory Summary (On-Screen reports) gives you current cost value of your inventory. Be sure to include Reserve List Values. AR Future Due & Customer Deposit report. Gives you AR and Customer Deposit balances. Follow these steps to complete the ICS month End Closing: 1. Start the ICS program. 2. Click on Maintenance and then Month or Year-End Reset. 3. Select the appropriate fiscal month and fiscal year. 4. Set the date range from the beginning to the end of the fiscal period you are closing. 5. Click on Post Closing Journal Entries to General Ledger. This will instruct Genesis to post two journal entries to the General Ledger: ICS Period Closing This entry contains the month-to-date totals on the Account Analysis Summary from your last Daily Sales Report. This will be journal entry number 80 in your General Ledger. You can change this journal entry later from within the General Ledger if required. Cost of Goods Sold This entry records the cost of the merchandise you have sold this month. This will be journal entry number 82 in your General Ledger. This journal entry can also be changed form within the General Ledger program if required. The amounts used for this entry depend upon the way in which you accrue sales income. A. Delivered Basis The total sales (at cost) delivered this month. You can see this amount on a report by printing a Sales Analysis with the Delivered Sales reporting option selected. (If you use this method for accruing sales, you will want to print this report each month). 6. Click Start.

2 Page 2 of 5 Note You can save time at the end of your fiscal year by completing on the Year-End Closing. Doing so will perform the Month End and Year-End closing simultaneously. Accounts Payable Determine the closing method you are presently using and then follow the appropriate steps listed below. You can see which closing method you have selected by clicking Maintenance, Defaults, and then Posting Defaults. If Accounts Payable Account is selected, you are using the Distribution Method. If Expense Accounts is selected, you are using the Expense Method. Note: You should only change posting methods at the end of a month if you decided to change methods. Follow the steps for the closing method you are using: When to Close Distribution Method: Close the A/P module on the same day each month (31 st, 1 st, 5 th, etc.). Make sure all invoices from the month being closed have been set up for payment prior to completing the Closing. The closing totals will consist of all invoices setup for payment during the month. Expense Method: Close the A/P module on the same day each month (1 st, 5 th, etc). Make sure all open invoices are entered in the computer with correct invoice dates before closing. Correct invoice dates are important because the closing totals will consist of open invoices with invoice dates in, or before, the month being closed. Before Closing Print these reports prior to closing the A/P module: Distribution Method: Print an A/P Distribution report. Store this report in a permanent binder or save to the Report Warehouse. Also print or save to the Report Warehouse the Vendor Balance report. Expense Method: Print a Vendor Balance report before closing. It is important to print this before entering any new invoices or paying and current invoices, as the balance will change with these actions. Store this report in a permanent binder or save it to the Report Warehouse. Follow these steps to complete the A/P month end closing: 1. Start the A/P module. 2. Click Maintenance and then Period End Closing. 3. Select the appropriate fiscal month and fiscal year. Also select the beginning and ending date for the period. 4. Click Start Closing. One or more journal entries will be posted to the general ledger. 5. The contents of the journal entry will vary with the closing method you have selected. Distribution Method: The journal entry will contain the total amount for each G/L Account number appearing on the A/P Distribution report. This represents the total amount of invoices set up for payment during the month being closed. Journal number 60 is used for this AP period closing. Expense Method: Two journal entries are posted. The first (journal entry number 60), Will contain totals by G/L account number for all open invoices with invoice dates in, or prior to, the current fiscal month you are closing. A second Reversing Entry (journal entry number 61), is also posted to the G/L. The Reversing Entry cancels, or reverses, the A/P closing entry from the previous month. This prevents the totals from an open invoice from being posted to the G/L (via a closing journal entry) more than once. In particular when an invoice has extended terms.

3 Page 3 of 5 Year End Closing Overview Three programs require a year-end closing procedure. These programs are: Inventory Control Payroll General Ledger Please be sure to make a complete backup copy of your data before closing. Important: Year-end closing for the Inventory Control System and General Ledger modules should be completed only at the end of your fiscal year (not your calendar year), unless your fiscal year is the same as your calendar year. Inventory Control System You can save time at the end of your fiscal year by completing only the year-end closing. Doing so will perform the month end and year-end closing at the same time. Follow the steps outlined for the month end closing process with one exception: Click on Year End Closing instead of Month End Closing when the closing screen is displayed. Be sure to save any needed reports to the Report Warehouse for later lookup. The following are reports advised to be saved at Year End. Sales Analysis report (Standard) Current Inventory Summary (On-Screen reports) gives you current cost value of your inventory. Be sure to include Reserve List Values. On-Order Report gives you total on order at end of period. AR Future Due & Customer Deposit report. Select Include Customer Deposit Sub-totals option. A- Be sure to select Year End Closing and month 12. B- select the date range of your last fiscal month for the COGS values. DO NOT select the entire year.

4 Page 4 of 5 Payroll When to Close - Year-end closing of the Payroll program should take place after the last Payroll for the current year and before processing the first payroll of the new year. DO NOT create Payroll checks for the new year if you have not closed out the previous year. Before Closing - Print these reports before closing or save them to the Report Warehouse: W-2 Statements (if desired). YTD Summary report. Quarterly Tax Reports. YTD History report (if desired). 1. Start the Payroll program and click Maintenance. 2. Click year-end Activities and Reset Year to Date Totals. 3. Print the W-2 statements for your employees (if desired). Consult the on-line help system in the Payroll program for detailed instructions about how to print W-2 statements. You can print W-2 statements prior to or after completing the Year End closing of Payroll. General Ledger When to Close - The General Ledger can be closed anytime after the final fiscal month of the year (see below). You can enter checks and journal entries into the General Ledger for the New Year without completing the year-end closing process for the prior year. Before Closing - Month End Closings for Accounts Payable and Inventory Control for all periods in the prior year should be completed. You will also need to enter the year-end adjusting entries from your accountant. We have provided a 13 th period for this year-end adjusting entry. The 13 th period allows you to enter your adjusting entries without affecting the 12 th period s monthly figures. You can print Profit & Loss and Balance Sheet reports before or after the closing is complete. 1. Click on Maintenance. 2. Select Year-End Closing. 3. Select the location, fiscal year you are closing, and date for the opening entry in the new fiscal year. 4. Click on Start. (The software will close out YTD profit to Retained Earnings account and carry forward Balance Sheet accounts into the New Year by creating an opening entry in the first fiscal period of the New Year. The date of the entry will be the first day of new fiscal year). As an Optional Closing process for GL, you can complete an unadjusted YTD closing at the end of the year. You must complete the MTD closings for ICS and AP prior to completing the YTD closing in GL. This will bring forward unadjusted balance sheet figures into the New Year so you have an idea of what you have in Cash, Inventory, Accounts Receivable and Accounts Payable. The idea behind this is that if you wait until you get your adjustments back from your accountant, which can take several months, you will not see the carry forward of last years figures. If you complete this process, at some point you will receive your year end adjustments from your accountant. You will enter them into last year and then need to re-close the year so correct adjusted figures move into the New Year. A Completing an Unadjusted closing.

5 Page 5 of 5 1. Go into GL after closing out ICS and AP. 2. Verify that ICS and AP closing entries are in last fiscal month. 3. Click on Maintenance and then Year-End closing. 4. Select the fiscal year you are closing and the date for the Opening Entry. (This will be the first day of your new fiscal year) 5. Click on the Start button. (You will be asked if you want the fiscal calendar in GL Setup to be reset for the New Year. It is okay to do this.) 6. After the completing the closing, go into the first fiscal period of the New Year and verify that the Journal Entry is correct. (You can compare the new entry with your balance sheet figures from the last fiscal period of the previous year. Remember that these figures are Un-Adjusted figures). 7. At some date in the future you will receive your year end adjustments from your accountant. When you receive the adjustments, go into the 13 th fiscal period of last year. Make the adjusting entry. 8. Print out your new Adjusted Year-End reports in the GL. 9. Go into the first fiscal period for the New Year. Click on Journal Entries and the Void option. 10. Double left click on the current Opening Entry. Left click on the Void option in lower right corner. Answer yes to continue. (This will void the Unadjusted opening entry. This is needed so you do not end up with two Opening Entries in the period. The idea is to delete the Un- Adjusted entry.) 11. Go to the main General Ledger window, click on Maintenance, and Year-End closing. 12. Be sure to select the fiscal year you are closing (you will have to click on the pull down arrow and select the correct fiscal year). Also select the correct date for the first day of the current year. 13. Click on Start and complete the closing. (This will be moving the correct Adjusted figures forward into the new period). 14. When it asks you if you want to reset the fiscal calendar, answer No. This is because you have already reset the fiscal calendar in the previous closing. This completes the entire closing process. This process allows you to move Un-Adjusted figures into the GL at the beginning of the New Year so you have an idea of where you are at financially, even though the figures are not exact. When you get the adjustments you delete the previous Un- Adjusted closing. When you complete the new closing you will have correct adjusted figures in the New Year.