OVERVIEW
This guide contains the recommended procedures for preparing for and completing your end of year procedures in Adjutant. The guide assumes a calendar (January through December) year structure with December as the end of year month. For customers with a different fiscal calendar setup, simply adapt the procedures in this guide to your calendar.
The guide is categorized by pre-end of year preparation steps and actual end of year closeout steps. Not all of the steps will apply to all customers. The steps presented are the best practice procedures for most customers and may not reflect every customer’s end of year needs. This guide is also not meant to be an all-inclusive guide for every customer. Some customer’s unique required end of year reporting procedures may not be included.
ABIS Consultants are available to help with any of the topics presented in this guide.
PREPARATION FOR END OF YEAR
PEFORM AN INVENTORY CYCLE COUNT
ABIS recommends performing a full inventory physical count at least once a year. Performing a full inventory count at end of year is popular because it offers the opportunity to start the new year with a clean inventory. However, the timing of a full inventory cycle count is up to the individual customer’s operational realities.
Performing a full inventory cycle count at the end of the year, after all current year business is complete – but before the new year begins – offers the following advantages:
- Final inventory adjustment can be posted in the correct year
- Inventory reports for the new year start with accurate values
- Reduces the need to run inventory reports in ‘as-of’ mode
- Many customers have a slow period in the last week of the calendar year
The Cycle Count screen can be used with wireless scanners to complete a paperless count, or it can be used to generate count sheets for a manual count. Pending counts can be completed in batches or all at the same time. Once counts have been entered, either by entry on the ‘Pending Counts’ tab, or by entry via wireless scanners, the counts must be finalized, or committed.
Once the counts are committed from the ‘Completed Counts’ tab, an accounting batch is created for any inventory value adjustments and the inventory records are updated with the current count.
For more information on the Cycle Count screen, refer to the following
Wiki:
CLEAN UP UNBILLED PO RECEIPTS
The Unbilled PO Receipts report should be run throughout the year as a regular procedure to spot check for purchase order receipts that may need attention or correction. However, at end of year, it is important to perform a deep-clean of the report and remove any lingering purchase order or accounts payable issues that have remained on the report throughout the year and need attention.
This end of year deep clean can have several benefits:
- Helps start the new year off with cleaner reports
- Forces you to reconcile, write-off, or otherwise adjust items that need a resolution
- Keeps any related accounting adjustments in the correct year
- Prevents issues from getting so old that the details are no longer remembered
Run the Unbilled PO Receipts report without any filters to see a complete picture of purchase order receipts that do not have a linked accounts payable invoice entry. The report has both Summary and Detail modes, as well as a DrillDown mode for working directly on screen.
The Close Unbilled PO Receipts utility is also available for quickly writing off the PO Clearing values to an offset GL account. Depending on the scenario, the correct clean-up procedure may or may not involve creating accounting, or it may or may not involve voiding or reversing an existing record. Pay close attention to each situation and take the appropriate action to correct each situation individually.
For more information on the Unbilled PO Receipts report, refer to the following
Wiki:
RECONCILE & BALANCE KEY GL ACCOUNTS
There are several general ledger account balances that should be reconciled against their corresponding operational reports (that do not use GL data) on an ongoing basis. Reconciling the following systems on an ongoing monthly (or more frequent) basis helps find potential operational or personnel surprises while they are still current. Generally speaking, there are many more options available for correcting a situation before the situation gets to be months (or worse) old.
For all reconciliations, all unposted batches should be posted prior to reconciliation, and a clean cutoff should be established for the comparison.
- ACCOUNTS RECEIVABLE
- Reconcile A/R GL account(s) individually against the A/R Aging Report
- Write off any outstanding A/R that will never be collected to bad debt
- ACCOUNTS PAYABLE
- Reconcile A/P GL account(s) individually against the A/P Aging Report
- Adjust any A/P GL discrepancies accordingly based on the situation
- INVENTORY
- Perform the Unbilled PO Receipts clean-up and review prior to inventory reconciliation
- Reconcile inventory GL account(s) individually against the Inventory On Hand Report
- Adjust/write off any discrepancies accordingly based on the situation
- PRODUCTION WORK IN PROCESS (WIP)
- Reconcile production WIP GL account(s) against the Production WIP Report
- In many cases, any imbalance between the Production WIP Report and the WIP GL reflects an accumulation of minor variances over time, and the appropriate action is to plug/adjust the GL to match.
REVIEW AND PREPARE 1099 DATA ¶
Vendor 1099 reporting is based on A/P Invoices that have been paid to vendors with a valid 1099 Type established in their organization’s Remit To screen. Before the year is done, take some time to review the current year’s 1099 setups and paid invoice totals to locate any missing vendors or invoices.
- The 1099 Types (TYPE1099) Rule Maintenance record contains the valid 1099 types for your system. The 1099 form controls are linked to the 1099 type in this screen. Review this setup for any changes needed for the current year.
- Run and review the AP Invoice Report for the current year’s paid invoices in Summary mode to look for any vendor records that should have been set up for 1099 reporting.
- Update the Remit To ‘1099 Type’ settings for any vendor that should be included in 1099 Reporting.
NOTE - Setting the ‘1099 Type’ will not retroactively update any previously paid A/P Invoices. Contact your Implementation Consultant to discuss your options for correcting paid invoices.
- IMPORTANT – Use the ‘Close/Recalc’ tab on the Print AP 1099s screen to recalculate the amounts from the appropriate year before producing the final 1099 reports and forms. The ‘Recalc Amounts’ function runs through all AP transaction data for the selected year and updates the 1099 final numbers. If this step is skipped, final 1099 data can be incorrect.
- The ‘Recalc Amounts’ function will also replace any manually entered 1099 YTD values in the Remit To screen with the amounts calculated from A/P. If any 1099 Amounts have been manually updated in the Remit To screen, those will need to be re-entered after each ‘Recalc Amounts’ function.
- The ‘List Report’ option in the Print AP 1099s screen can be used to generate an audit report of the vendors with 1099 amounts for the selected year.
For more information on the Print AP 1099s screen functions, refer to the following
Wiki:
UPDATE THE FISCAL CALENDAR FOR THE NEW YEAR
The Adjutant Fiscal Calendar drives the reporting periods throughout the accounting system. A Fiscal Calendar record must be created for every reporting period in every reporting year.
Setting up the new year’s Fiscal Calendar and General Ledger account balance records is a simple process. Fiscal Calendars can be added for future years at any time.
- Open the Fiscal Calendar controls from the ‘Fiscal calendar’ tab in the CID Maintenance application. The current Fiscal Calendar year should be displayed.
- In the ‘Fiscal Year’ field, type in the new four-digit year you wish to add, and a pop-up window will ask if you would like to add the default calendar for the new year. Click on ‘Yes’ and a brief process will add the Fiscal Calendar and update all general ledger accounts with the new reporting periods.
- Note = For leap years, the default calendar dates for the February period should be reviewed carefully and adjusted if needed.
REVIEW THE FISCAL CALENDAR CLOSED/LOCKED STATUS
Review the current year and any prior years’ fiscal calendars to ensure that all months are accurately closed and locked. Any previously closed fiscal periods should be marked as ‘Locked’ if posting is no longer allowed for that period.
- Fiscal periods can be manually locked from the ‘Fiscal Calendar’ tab by editing the selected Fiscal Year and clicking the ‘Locked’ checkbox for any period that should be locked.
- Fiscal periods can also be locked from the Close GL Period and Year screen while closing the period by checking the ‘Lock Also’ box before clicking ‘Close Period’.
- All fiscal periods prior to the end of year period should be closed using the Close GL Period and Year screen.
UPDATE THE WORKING CALENDAR FOR THE NEW YEAR
The Working Calendar is used to calculate available working days for task management features, production scheduling, and some reporting features.
A ‘Working Calendar Ends in Less Than 60 Days!’ message will begin displaying upon log in when the calendar needs to be updated. To quickly update the Working Calendar:
- Access the Working Calendar screen and click the ‘AutoGen’ button in the lower right corner.
- A pop-up window will ask if you would like to generate the calendar working days for the next 365 days.
- Click ‘Yes’ and the calendar will be automatically built for the next year.
- Scroll through each month and make any adjustments for holidays, or other non-working days as needed.
- To adjust days, click ‘Edit’ on the displayed month, and click on any calendar days that should be changed. Clicking on a date will toggle it between working (green) and non-working (red). Click ‘Save’ for each month if changes are made.
REVIEW POSTING WINDOW CONTROLS
The Posting Window controls are used to prevent general ledger posting transactions outside of the approved posting months. The Posting Window can be set to a short range of just a month or two, or it can be set to include the whole year. Any posting date that does not fall within the Posting Window date range will be prevented.
- Review the Posting Window date settings in the ‘Accounting Backend’ tab of CID Maintenance and edit as needed.
- If you are opening the window to include the upcoming year, understand that you may need to keep the current month available for posting until all year-end activity has been completed.
- The Posting Window controls can be adjusted at any time to allow posting as needed.
OTHER END OF YEAR ACTIVITIES
The following items are recommended activities for good data maintenance habits to promote a lean operating environment with fewer obsolete records.
- CLOSE ‘OLD’ RECORDS
- Use the Sales Order Grid screen to locate open sales order records that are not going to ship and either void or manually close them.
- Use the Quote Grid screen to locate open quote records that are not going to move forward and either void them or mark them lost/closed.
- Use the Project Grid screen to review any incomplete project records and take action to either complete them or delete them if not needed.
- Use the Production Work Order Report to look for incomplete or unneeded PWO records and take action to close them.
- CLOSE BLANKET/MAKE FOR STOCK PWOS AND MAKE NEW PWOS
- This action can improve load times and generally offers a cleaner experience.
- MERGE ANY DUPLICATE ORGANIZATIONS
The following items are recommended but may not apply to all customers.
- REVIEW THE ‘RETAINED EARNINGS’ GL ACCOUNT
- This is found in the ‘Clearing’ tab inside the ‘Accounts’ tab of the CID Maintenance screen (This is used for EOY posting)
- REVIEW A/R CREDIT LIMITS AND UPDATE AS NEEDED
- USE THE GL BUDGET EXPORT/IMPORT TO BUILD BUDGETS FOR THE NEW YEAR
- COPY AND UPDATE ANY CUSTOM FINANCIAL REPORTS FOR THE NEW YEAR
- UPDATE ANY COMMISSION PLAN STRUCTURES FOR THE NEW YEAR
- RUN AND ARCHIVE ANY FINAL, END OF YEAR VERSIONS OF CRITICAL FINANCIAL REPORTS
END OF YEAR CLOSING PROCEDURES
Closing the accounting year in Adjutant is as simple as clicking a button.
CLOSE THE END OF YEAR FISCAL PERIOD
Closing the end of year fiscal period and closing the fiscal year are two separate steps.
When you are ready to close the last fiscal period of the year (December for most clients):
- Access the Close GL Period and Year screen and use the ‘Close Period’ button to close the Current GL Period displayed.
- Use the ‘Lock Also’ checkbox to lock the period and prevent any further posting to that posting period.
- After clicking the ‘Close Period’ button, the system should respond that the close process is complete, and the Current GL Period will update to show the next fiscal period.
- If you need to catch up on closing previous periods until the Current GL Period is the end of year period, you can process them one after the other in this screen.
CLOSE THE FISCAL YEAR
When you are ready to close the year, first access the Close GL Period and Year screen and use the ‘Close Period’ button to close the fiscal period just like the previous step. The Current GL Year will display the fiscal year that needs to be closed.
- Click the ‘Close Year’ button and the system will automatically process and post all of the entries needed to clear profit/loss to your retained earnings account.
- The retained earnings account that will be used can be found in the ‘Clearing’ tab inside the ‘Accounts’ tab of the CID Maintenance screen.
- The process generally only takes a few seconds and will open the next fiscal year for posting.
RE-OPENING AND RE-CLOSING THE YEAR¶
If any fiscal periods need to be re-opened for posting, you can edit and clear the ‘Closed’ and ‘Locked’ checkboxes for the period in the ‘Fiscal Calendar’ tab in CID Maintenance.
After the adjustments have been made, follow the procedures above to re-close the affected period(s).
To re-close the year after making adjustments:
- Access the Close GL Period and Year screen.
- The ‘Current GL Year’ should show the new year if the prior year has been closed.
- Use the ‘Re-Close Prior Year’ button to generate the adjustments to retained earnings and any other affected accounts from any posting entries in the end-of year period.
If you need assistance with any of these procedures, don’t hesitate to contact your Implementation Consultant.
