The General Ledger End of Year Close is necessary to calculate current year income and establish opening G/L account balances for the following year. Do not confuse the EOY close with the EOM close.
|End of Month||End of Year|
Please note that the last month of the fiscal year still needs to be closed per normal procedure before the general ledger is closed for the year.
Accounts Receivable must be closed for the last period of the year and cannot be reopened.
Accounts Payable must be closed for the last period of the year and may allow invoice entries to a closed period per a company control flag.
See also: Year end close checklist
If you are considering changes in financial structure or G/L posting, please contact DDI Customer Care to discuss any implications. The following items may require a re-index of the system and should be implemented in accordance with a new fiscal year to avoid changing data in the current year.
- Inventory Costing Changes
- Product Line Specification Changes
- Changes or Additions to Branch Structure
- Changes in Chart of Accounts Structure
- Implementation of Financial Divisions
The final EOM close follows the same systematic process as other monthly closes, but there are a few additional considerations before the EOY close can begin.
- Bad Debts should be written off before closing the year. See Write off bad debt. Consult with your CPA about whether or not to write off unpaid sales tax before the debt. This applies to companies remitting billed sales tax as opposed to collected sales tax. See Enter sales tax credits and debits
Review Bank Statements online so ACH cash receipts and payments can be posted into the last month of the fiscal year.
- Review the Un-Invoiced PO Report for accuracy. If there are old uninvoiced PO's, determine if the AP invoice has been posted.
Users of the consolidated close should note that the value of un-invoiced PO’s is the determinant of the monthly inventory accrual.
Review the Inventory Value Report for accuracy. Check for the presence of negatives, consumables and unit of measure discrepancies.
Examine each regular warehouse for anomalies. Adjustments and cost corrections should be completed before the A/R close.
- Validate the Drop Ship warehouse. There should be no quantities in the warehouse and the G/L account should also be zero.
- Validate the Vendor Return warehouse. There may be a positive quantity of merchandise present. If so there should be a matching balance in the G/L.
All known sales should be invoiced (if on account) or posted as part of the daily POS batch for inclusion in the annual metrics and financial reports.
When a General Ledger Year is closed, the system performs the following actions:
- Carries Balance Sheet account balances forward for the start of the new fiscal year.
- Records an annual profit or loss to the Retained Earnings account.
- Starts Income Statement accounts with zero balances for the new fiscal year.
- Performs a General Ledger Re-index on the new year. The closed year is not re-indexed.
To close the fiscal year
- Go to Accounting > General Ledger > General Ledger Year End Close.
- On the confirmation message “Do you wish to close General Ledger Year End?” click Yes.
A re-index of the new year is performed. Depending on number of branches and transactions, this may take 1 to 30 minutes.
- To avoid locked records and other errors, do not allow users to update any records or post any transactions during this time. Any process that changes a customer, vendor, product, bank or G/L account balance is prohibited
Close the G/L at the beginning of the New Year and reopen as many times as needed to accommodate journal entries and adjustments. This option provides G/L balances for the new year.
New Year G/L Inquiry in collapsed mode after End of Year Close. Account balances are visible and up to date.
Current Fiscal Year: 18
You may choose to leave the G/L open as long as needed to accommodate year-end journal entries and CPA adjustments. If this is the case, the G/L Inquiry screen will display only current transactions for the New Year. You will have to expand the G/L to see the daily activity.
General ledger accounts will show only transactions for the new fiscal year (when viewed in expanded mode) and no opening or ending balances.
New Year G/L Inquiry in collapsed mode before End of Year Close. No account balances are visible.
New Year G/L Inquiry in expanded mode before End of Year Close. No account balances are available.
Inform ERP will not allow a Year End Close in the following circumstances:
- The A/R and A/P modules for the last fiscal month are still open.
- The G/L is out of balance. In some situations, a G/L re-index will correct the imbalance. Please proceed with caution and understand that re-index can change account balances. See General ledger re-indexing.
- For multi branch organizations with a consolidated Balance Sheet, if each individual branch is out of balance, go to File > Company > Master > Accounting > Close General Ledger End of Year Profit & Loss by Branch. The flag should be set to NO to enable closing in this situation.
- Multi-branch organizations with separate Balance Sheets should correct the imbalance and leave the flag set to YES; otherwise retained earnings will not populate correctly for all branches.
To accommodate journal entries, you can reopen a previous General Ledger year at any time .
- Go to Accounting > General Ledger > Re-open Previous Fiscal Year. The system will open up the General Ledger module only. Changes to system data will not occur at this time.
- Make any necessary entries and close the year when completed. If you do not close the current year after entering adjustments, the next year will not reflect any changes resulting from the adjustments.
- If there are any changes, reproduce financial reports.
- If a year needs to be re-opened after the current year has accumulated significant transactions, be sure to produce a current year Trial Balance before making any changes.
- The system will complete a General Ledger re-index of the current year when the re-opened year is re-closed.
An optional Fiscal Period 13 is available in the General Ledger and Financial Reporting modules. It can be assessed in G/L Inquiry, Financial Reporting, and Journal Entry functions by entering “13YY” in the Fiscal field. Fiscal Period 13 is intended for “extraordinary” transactions that should not impact regular operating periods. Only journal entries can impact this period, as all other source codes are reserved for operating activities. Note that when using period 13, it must be typed into the Fiscal field.