Presentation on theme: "Financials Year-End Processing"— Presentation transcript:
1 Financials Year-End Processing Paul SterzingerSenior Business AnalystLawson R&D
2 Accounts PayableAP195 – Period Closing is run to insure all transactions have been processed and interfaced to the general ledger.After the last period is closed for the fiscal year, run AP199 – Vendor Balance Year EndUpdates the new year period end dates on the vendor group.Transfers the current year vendor balances to last year.
3 Accounts Payable Archiving/Purging Vendor Invoices Archiving invoices is used to speed up batch and on-line performance (AP198).Moves historical invoice, distribution and payment records to archive files.May be used instead of purgingYou can inquire and or report on archived invoices.Purged invoices permanently deletes records and archives them to a csv file (AP300).
4 Asset ManagementMake sure you are finished adding, adjusting, transferring and disposing of asset records.Release transactions using AM170.Determine if the 40% tax rule applies to the depreciation calculations.This rule requires that if 40% or more of all assets are placed into service in the last fiscal quarter, special depreciation calculations apply
5 Asset Management 40% tax rule determination. Run AM220 to list assets added during the past year.Run the AM220 again for assets added during the last quarter.Compare the reports to determine if 40% of the assets placed in service during the year were placed in the last quarter.
6 Asset ManagementIf the 40% rule applies, adjust the depreciation conventions for the assets that were placed in service during the fourth quarter of the year.Run AM125 – Mass Adjustments. On the Asset Book Adjustment tab change the convention code to MQ (Mid Quarter)Update the changes made in AM125 by running AP170 – Processing Release
7 Asset Management Continue running the normal period close process. Run AP180 - Depreciation Calculation.Run system reports and verify asset information.Once satisfied that the reports and assets are correct post and close the period by running AM190 - Period Close.Running AM190 with the release parameter set to yes is irreversible.
9 Asset ManagementMake sure you have run all reports. You can not run them once year end is processed.Note: If you have depreciation history enabled for the books you can use AM281 – Depreciation History Report to report on previous year depreciation historyBack up the data.Run AM195 – Year End Close to close out the year.Verify the year end was successful by opening AM01.1 – Calendar and inquiring on the company and book.
10 Activities There are no mandatory procedures for year end processing. Optional - run AC195-System Control to close activities on a monthly basis.Closing the activities allows the users control over transactions for balancing purposes.Most clients do not close activities because there is no back posting functionality
11 Accounts ReceivableAR199 – Period Closing Report is also used for year end processing.The AR199 is run with the year end parameter set to “Y”.In addition to normal period end processing the AR199 will rolls the following balances from current year to last year.Period Billed, Chargebacks, Credits, Write-offs and PaidMoves any value for the next year to the first period.Moves the year-to-date Invoice Payment Average (IPA) and Days Beyond Terms (DBT) totals to last year to update customer statistics.The AR199 should prompt you to run the year end option for the last periodDo NOT run the AR199 twice .
12 Lawson General Ledger Year-End Procedures In this presentation, we will review the fundamentals of GL year-end closing.
13 Year-End Process Flow Backup Lawson Data Verify Fin. Stmts. for LY (2004)Run GL291, GL292& GL293Final Close allperiods of LY (2004)Run GL190 to postall entriesRun GL199 withFinal StatusIn this presentation, you see several year-end process flow diagrams. For purposes of this presentation, the year-end closing steps are covered in groups. An optional step in a process flow diagram is noted by a dotted-line. A required step is noted by a solid line.Following a brief overview of the steps within a process flow diagram, we will view the screens related to the steps and talk about the steps in more detail.Prior to beginning year-end processing, we recommend that you make a complete backup of your Lawson data.Then, you should verify your financial statements for the last year. If you haven’t previously closed the periods in the last year with a “Final” close status, you will need to do that before you can close the current year. Since you can’t make adjustments to periods with a “Final” close status, you should verify the financial statements prior to “final” closing the periods in the last year.Then, close all of the periods in the last year with a “Final” close status.If you are using closing control for your subsystems, you must close them prior to closing General Ledger.Verify all subsystemsare closed in CY (2005)Required if usingclosing control
14 Verify Fin Statements for Last Year (2004) Produce standard reports, such as the income statement, balance sheet or trial balance; or customized Report Writer reports to verify the balance in the last year prior to “final” closing the last year.Here is an example of the Trial Balance screen using the Lawson Portal. If you are using report currency, you should print a copy of this report for each report currency, as well as the base currency of the company.Verify totalsVerify company is in balance
15 Final Close All Periods of Last Year (2004) After you have verified the financial statements for last year and recorded any necessary adjustments, you are ready to close the periods in the last year with a status of “Final” close. All periods in the last year must be “final” closed before you can close the current year.May want to verify year-end fin statements after running this
16 Verify Subsystems are Closed in Current Year (2005) If you are using closing control for your subsystems, you will have to close them prior to closing General Ledger. There is a quick way to check the closing status of the subsystems.Right-click on the Company field on any General Ledger screen, then select the Status of Subsystems option. This will display the closing status of each of the subsystems.Access from Drill around on Company fieldInterface subsystem entries, then close subsystems
17 Year-End Process Flow Yes No Run Currency Revaluation (GL191) Yes Are you using Currency Exchange?YesNoRun CurrencyRevaluation (GL191)Run AP191 and AR196,if applicableAre you using Currency Translation?Do you have customers and vendors in different countries? If so, you are probably using currency exchange. Clients who use currency exchange typically run Currency Revaluation at the end of each period and the end of the year to revalue outstanding transactions based on current exchange rates.Do you have offices or locations in different countries? If so, you are probably using currency translation. If you are using Currency translation, you should run Translation Calculation (GL195) or Report Currency Translation (GL196) at the end of each period and the end of the year.YesRun GL195 orGL196 to translatemultiple CUsinto a common CUNo
18 Year-End Process FlowDo you store statistical amounts/units in Budgeting?YesRoll statistical or historical budgets forward one year using FB120NoBudgeting is primarily used to hold General Ledger budgets and forecasts. But some clients also use Budgeting as a “database”, to store statistical or historical amounts or units. These amounts or units can be printed on Report Writer reports or used in formulas within compute statements.If you store historical or statistical amounts in a budget, you may want to move these “budgets” to the current year. This will save maintenance on formulas that you have within your compute statements and Report Writer reports that you have created.Then, backup your data prior to closing the current year.Backup Lawson Data
19 Roll Statistical/Historical Budgets Forward If you want to move statistical or historical budgets to the current year, use Intracompany Mass Budgeting (FB120) to move the budgets from one year…Roll statistical or historical budgets ahead one year so RW reports don’t need to be modified
20 Roll Statistical/Historical Budgets Forward to the next year.
21 Year-End Process Flow Verify Year-End Fin. Stmts. for CY (2005) GL291, GL292 & GL293Review period end datesfor NY (2006)GL10.1Close last periodof the current yearGL199-Limited statusNow, we are ready to begin the year-end closing process for the current year.Prior to closing the year, you may want to verify your year-end trial balance, income statement, balance sheet and any customized financial statements you have created in Report Writer.Prior to entering transactions for the next year, you should review the period ending dates for the next year in Company (GL10.1).After verifying the year-end balances, you are ready to close the year. You close the year by closing the last period of the year. There isn’t a separate program for year-end closing.After you have closed the year, you may want to verify your financial statements for period one in the current year.Verify Fin. Stmts.for pd. 1, CY (2006)
22 Verify Year-End Fin Statements for Current Year (2005) Before you close the current year, you may want to produce standard reports, such as the income statement, balance sheet or trial balance, or customized Report Writer reports to verify the balances in the current year. If you are using report currency, you should print a copy of the financial statements for each report currency, as well as the base currency of the company.Verify totalsVerify company is in balance
23 Review Period Ending Dates Prior to entering transactions for the next year, you should review the period ending dates for the next year in Company (GL10.1) and make any necessary changes. You can’t change period end dates once transactions exist in a period. This step is especially important for clients on a fiscal year.
24 Close Last Period of Current Year (2005) Closes the last period and the yearRolls account balances forwardCurrent year last yearNext year current yearCreates consolidation records for next yearCalculates beg. balance for all BS accounts for next yearCreates a closing entry with a status of history in period 99Undistributed RE REWhen you close the last period of the year, you close the period and the year.Account balances that were stored in the current year are moved to the last year.Account balances that were stored in the next year are moved to the current year.Account balances that were stored in the last year are moved to the previous year.The system also creates new records, which hold a summary of your account balances, in the GLCONSOL file.The system calculates beginning balances in the new year for all of the balance sheet accounts (all accounts with a chart section of 1).The system also calculates period-end dates for next year for the General Ledger calendar.To record the net income or loss for the year, the system creates a closing entry in period 99 with a status of History. This entry closes the undistributed retained earnings account balance into the retained earnings account balance.
25 Close Year - Consolidation Company Doesn’t auto-reverse entry in next periodReverses out balance sheet account balances in period 1Prepares system for translation in new yearRemember, when you run Translation Calculation (GL195), the system creates a released entry in the consolidation company. Typically, the system translates the year-to-date balances for balance sheet accounts and auto-reverses the entry in the next period when Period Closing (GL199) is run in the consolidation company. This process differs if you are closing the last period of the year.If you are closing a consolidation company for the last period of the year, the translation entry for the balance sheet accounts is not reversed. Instead, the system creates an entry in period 1 in the next year to reverse out all balance sheet account balances. This prepares the year so that you can begin translation again to this consolidation company.
26 Year-End Closing Entry You can display the year-end closing entry on Journal Control, Journal Analysis or Transaction Analysis.The closing process doesn’t delete the balances in the income statement accounts, so they are available for reporting purposes after you have closed the year. It transfers the balance for undistributed retained earnings to retained earnings. The undistributed retained earnings account accumulates the net income or net loss every time you post a journal entry.Also, notice that the entry is posted to period 99 and it is created as a historical entry, so it can’t be backed out or edited.Use Journal Control (GL45), Journal Analysis (GL41) or Trans. Analysis (GL90) to display year-end closing entry
27 Processing in NY before Closing CY Select the Closing Option of Next Yr Beg Bal on Period Closing (GL199) to update beginning balances in the next year, prior to closing the current year.Select Next Yr Beg Bal prior to closing year to calc beg balances for the next year
28 Processing in NY before Closing CY Use the Next Year Beg Bal option to bring adjustments forward from the current year to the next year, prior to closing the current year.If you have multiple sets of adjustments that you want to bring forward to the current year, use this option each time you have a set of adjustments that you want to reflect in the beginning balances for the year.Use to bring adjustments from CY to NY prior to closing yearCan run multiple times for multiple batches of adjustments
29 Verify Fin Statements for Period 1 (2006) After you have closed the year, you may want to verify the account balances in the new year. Verify that the company is in balance and that the beginning balances for the accounts are correct.Verify totalsVerify company is in balance
30 Year-End Process Flow Adjust dates on CA and RJ entries Use CA10.2 & GL70.2to adjust dates for CY (2006)Delete TransactionHistory using GL300Delete unused accountsUse GL122 forposting accountsUse GL100 fordetail accountsTo prepare for the next year, you may need to extend the ending period and year on your allocations and recurring entries.When you run period closing, the system does not delete transaction history, budgets or balances. You can delete transactions, balances or budgets at any time using General Ledger History Delete (GL300).You can delete detail or posting accounts that haven’t had transaction activity or budgets for two years. Use Mass Account Change Delete (GL122) or Mass Chart Account Change Delete (GL100) to delete accounts in mass.
31 Adjust Dates on CA Entries If you are adjusting the dates on allocations, you may want to move the ending date beyond the end of the current year so you minimize future maintenance on the entries.May want to adjust ending dates beyond the end of the CY (2006)
32 Adjust Dates on RJ Entries You may also want to move the ending date on recurring entries beyond the end of the current year so you minimize future maintenance on the entries.This may not be a good idea if you are using Encumbrance Accounting, since the system will verify that there are budget amounts available through the Ending Period and Year that you enter for the recurring entry.May want to adjust ending dates beyond the end of the CY (2006)
33 Delete Transaction History Since period closing doesn’t automatically delete transaction activity, balances or budgets, you may want to delete this information for a selected year. You can choose whether you want to delete transaction activity, balances or budgets.You can optionally save the information that you are deleting in CSV files for future reference. Here is a list of the archive files and the information that they store:AMTARCH – account balances purged from GLAMOUNTS,BUDARCH – budget balances purged from FBDETAIL,CONSARCH – summary account balances purged from GLCONSOL,TRANSARCH – journal entries purged from GLTRANS,CURARCH – currency balances purged from CUAMOUNT,UNTARCH – unit balances purged from GLUNITSAMTXARCH – daily account balances purged from GLAMOUNTSX,BDHARCH – budget versions purged from FBDTLHIST,CURXARCH – daily currency balances purged from CUAMOUNTX, andFBTRANARCH – budget transactions purged from FBTRANS.Can delete unwanted transactions, balances & budgetsCan optionally save information in archive files
34 Delete Unused Posting Accounts Use Mass Account Change Delete (GL122) to delete posting accounts that haven’t had budgets or transaction activity for at least two years.Accounts must have no budgets or transactions for at least two years
35 Delete Unused Detail Accounts Use Mass Chart Acct Change Delete (GL100) to delete detail accounts that haven’t had budgets or transaction activity for at least two years.Accounts must have no budgets or transactions for at least two years
36 Special Considerations – Period 13 Can I use period 13 as an adjustments period?At least one day must be dedicated to this periodJournal entries can be auto-reversed from period 12 to period 1, other entries cannotSpread action in budgeting spreads to all periodsLet’s address a couple of questions that clients have at year-end and throughout the year.Can I use period 13 as an adjustments period?Some clients choose to use period 13 as an adjustments period. The advantage is that it makes it easier to report on the adjustment entries separate from the period activity for period 12.If you use period 13, you need to dedicate at least one day to this period. For example, you could assign 12/30 as the period ending date for period 12 and 12/31 as the period ending date for period 13.On version 8.1 or above, you can create a manual journal entry in period 12, using Journal Entry (GL40.1), and reverse it in period 1 instead of period 13. Recurring entries, allocations and other entries don’t allow you to indicate what period an entry is reversed in, so an auto-reversing entry created in period 12 is automatically reversed in period 13.There is a Spread action code that you can use to split an annual budget evenly or unevenly to the periods in the year. If you use this functionality, the system will spread the budget to all periods, including period 13, if you use it as an adjustment period.Based on those considerations, you need to decide whether it makes sense to use period 13 as an adjustments period in your company.
37 Special Consideration – Commitment Accruals What is the purpose of Period Year End GL Commitment Accrual?Optional processUpdates period/year on outstanding commitments & encumbrancesCreate accruals for outstanding commitments & encumbrancesAuto reverse accruals in next periodYear-end – can create a budget journal entry for NY instead of an accrual entryPeriod Year End Commitment Accrual (GL197) can be used by clients who track budget commitments and encumbrances in General Ledger. It is an optional process that advances the period and potentially the year on the outstanding commitments and encumbrances. You also have the option to create an accrual journal entry or a budget journal entry for the outstanding commitments and encumbrances. If you create an accrual entry, it is created as an auto-reversing entry so that it is reversed in the next period. If you are closing the year, you can choose to create a budget journal entry instead of an accrual entry for outstanding commitments and encumbrances to increase the next year’s commitment budget.
38 Related Knowledge Base Articles General Ledger Year End Closing ProcessArticles 83938, 74398, ,What Happens When I Accrue Encumbrances & Commitments?Articles 73832,Consolidation Company Year-end EntryArticle 72115, 83940Performing Optional Year-end ProceduresArticle , 92992, 73910There are many knowledge base articles that include information on the year-end closing process. Here is a list of some of the articles.
39 QUESTIONS ?? Paul Sterzinger Senior Business Analyst This concludes the Lawson General Ledger Year-End Procedures presentation. For additional information about year-end processing, please refer to the General Ledger User Guide.