The general ledger end of year close calculates current year profit/loss, posts it to retained earnings and establishes opening G/L balance sheet accounts for the new fiscal year.
Closing the fiscal year is a separate process. The final month for Accounts Receivable and Accounts Payable must be closed prior to closing the general ledger year.
See also: End Of Month Close Process.
Write off bad debt and review online bank transactions to ensure posting in Inform.
This process should be performed only when there are no users actively posting on the system. It takes one to five minutes to complete the process. It is recommended to close the fiscal year right after the final month of the year is closed. The year can be re-opened as many times as necessary as explained below (Reopen a Previous Fiscal Year).
- Navigate to Accounting > General Ledger > General Ledger Year End Close.
- When prompted to Close General Ledger Year End, click Yes.
- All Balance Sheet accounts will roll forward with balances.
- All Income Statement accounts will close into Retained Earnings to start the new year at zero.
- The system will re-index the G/L in the new year.
Reopen a previous general ledger year at any time to make adjustments to a closed fiscal year. There is no limit to the number of times a G/L year can be reopened.
Note: Before opening and closing the fiscal year, review the current fiscal year in the upper right corner of the G/L inquiry screen. Refresh the G/L inquiry screen by closing it then reopening the screen. Ensure that the G/L is in the proper fiscal year before opening or closing the year.
To re-open a closed year, navigate to Accounting > General Ledger > Re-Open Previous Fiscal Year.
- Make the adjustments to the prior year.
- Reclose the year after making the adjustments; otherwise the balances are not updated for the current year.
Inform does 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 a re-index can change account balances. See General ledger re-indexing.
- For multi-branch organizations with a consolidated balance sheet, a error message (see below) may appear. It means that each individual branch is out of balance. To allow the year to close, navigate to File > Company > Master > Accounting > Close General Ledger End of Year Profit & Loss by Branch. Set the flag to NO to allow closing in this situation. Run the year end close process again.
- 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.
The last month of the fiscal year takes longer than month end closes. Wait for the process to be completed. Do not exit Inform or end the task, as this could cause problems. If the year end closing takes longer than 2 hours, contact DDI Customer Care.
If a year end close has been completed, there are 2 options to enter additional expenses in the last month of the fiscal year once the year has been re-opened:
- Use Journal entry accruals in the month (recommended).
- Update a company flag
- Navigate to File > Company > Master.
- Click the Accounting tab.
- Set Allow Period Change in Accounts Payable to Y to enable invoice entries in closed periods.
Note: This applies to the invoice entry only and not to the payment of the invoice. Disbursements are restricted to the current A/P period.
- Navigate to Accounting > General Ledger > Re-Open Previous Fiscal Year to reopen the G/L year.
- Enter the invoice and edit the accounting period. Assigning a date does not affect the invoice period and must be set manually.
- Navigate to Accounting> General Ledger > General Ledger Year End Close to close the G/L Year.
Note: The Accounts Payable Aging Report generated at the time of A/P end of month close is no longer a valid representation of the A/P liability at the end of the year. Any A/P invoices that are backdated must be added to the end of month aging report to tie to the G/L A/P balance.
Sales tax code calculations cannot be re-indexed. Changes to the rate or column must be made after the final billing for the period, but before the first billing of the new tax rate period. Consult your CPA for tax rates in your jurisdictions.
Navigate to File > Customer > Tax to view or edit tax codes.
See also: Sales tax rate changes
Note: Inform does not print IRS tax forms. Consult your CPA or irs.gov to obtain the relevant form.
A vendor must be defined as 1099-eligible to be included on the 1099 report. A report can be generated from Inform that lists the YTD 1099 data.
An optional Fiscal Period 13 is available in the general ledger and financial reporting modules. Fiscal Period 13 is intended for extraordinary transactions that will not impact regular operating periods. Only journal entries can be posted to this period. Note that when using period 13, it must be typed into the fiscal field when posting the journal entry and running the financial statements and G/L inquiry screen so these adjustments are included in the results.
The prior fiscal year has not been closed. See Financial statement and GL inquiry screen are blank in the new year.