MONTH/YEAR-END CLOSING PROCEDURES

We need to split this out into three different sections.

Periodic

Perpetual at Standard

Perpetual at Actual

When to create your new fiscal year – We need the future fiscal year to use the Budget and to use Forecast

You are now ready to close out your month.  Don’t forget to open your new period’s status.

Go to G/L Chart of Accounts -> Options -> Define G/L Periods, and change the G/L, A/P, and A/R status to “OPEN” for the subsequent month in order to allow transactions to be posted.

1. Change the G/L, A/P, and A/R status to “OPEN” for the first period on the new GL year, in order to allow transactions to be posted.
   

1. Close Inventory Status for future periods when creating a new Fiscal Year
   
2. Alert- to open inventory status based on System Date for the new month
   

MONTH-END CLOSING PROCEDURES:

1. G/L Periods shut off the ability to post Inventory Transactions (closing out previous month)
   

Go to System Set-upSystem ParametersG/L Set-upDefine G/L Periodschange INV Status to “CLOSED” so that nothing further can be posted to the month.

1. Print the Trial Balance report for the period as a starting point or checklist for reconciling various G/L accounts.  (This is a choice as some users just review the Trial Balance screen instead of printing the report) – And print again after completing any other adjustments to the ledger.
   
2. Ensure that all Accounts Payable related items for the month have been entered and posted. 
   

1. Verify all purchase order receiving has been done for the month.  
   
1. Utilize a report such as PO Backlog By PO Number located in the PO Reports Menu
   


2. Check that all vendor invoices for the month entered and posted.  Run Accrued Receipts As Of report (enter last day of G/L period) to check for any outstanding receipts still to be invoiced.  This final report should tie out to the G/L Accrued Receipts account if using actual or standard costing. Also review the report catalog to ensure the user is using the correct report based on their inventory parameter settings. 
   
1. Confirm if you are using Enable Selection by Receipts only to allow you to use the As Of reports.  Set security at the workstation/user level. (Add to impact to help files for this feature).
   
2. This should be changed to be either the for Customers using PIT
   
1. Accrued Receipts At Purchase Price For The Period Ending – customers realizing PPV at PIT Posting
   
2. Accrued Receipts For the Period Ending – customers not realizing PPV at Posting
   


3. Make specific recommendations.
   


3. All Debit memos for the month generated and posted, either through the Vendor RMA function, PO Receiving or through AP invoicing, whichever is appropriate.  Vendor RMA’s pending debit memo amounts and po receiving rejects will both surface on the Accrued Receipts Reports. (Test)
   
4. All A/P checks should be generated and posted, including making sure that all manual, handwritten checks have been entered and posted.
   
5. Run Accounts Payable Aging – Any Period report for the period being closed.  This final report should tie out to the G/L Accounts Payable account.  
   

Note that the “As of Aging” reports are based off of batch date and not period.

1. Go to G/L Chart of Accounts -> Options -> Define G/L Periods and change the A/P Status to “Closed” so that nothing further can be posted to the month.
   

1. Ensure that all Accounts Receivable related items for the month have been entered and posted:
   

1. Customer invoices for the month generated and posted; Run the Shipments Pending Invoicing report to make sure that all items for which packing slips have been issued have been invoiced.
   
1. If PIT Customers – they should run the Shipments Pending at Standard Cost Report to tie out (RMA’s will be included on this report)
   
2. If using Shipments Pending Invoicing parameter then post all PIT –Shipments transactions as usual.
   
3. Ensure that Shipments Pending Invoicing GL Account is at a zero balance.  Note that VMI users may have a balance.
   


2. All cash receipts for the month entered and posted, including any A/R adjustments or write-offs.
   
3. All credit memos for the month generated and posted, either through the RMA function in Sales and Distribution or through invoicing, whichever is appropriate.
   
4. Run Accounts Receivable Aging – Any Period report to get total dollars in open receivables (be sure to note multi-currency totals).  This final report should tie out to the G/L Accounts Receivable account.  
   
5. Go to G/L Chart of Accounts -> Options -> Define G/L Periods and change the A/R Status to “Closed” so that nothing further can be posted to the month.
   

1. Make sure that all customer orders received during the month have been entered.  Run any related reports that may be needed, e.g., New Orders, Customer Backlog, etc. 
   
2. Ensure that all production reports for the month have been entered and all dispositions completed.  Run any reports that may be needed, e.g., Cost vs. Value Summary, Press Scrap Report, Unit production Report Summary, etc.  Enter and post any other items that may affect inventory balances.  If a physical inventory has been performed, make sure that all adjustments to inventory balances have been posted.
   
3. Go to Process Cost-Post Inventory Transactions:
   
1. Post all transaction types that are relevant to your company’s procedures, for the month, have been compiled, journal entry created and posted to the general ledger. (This step required only if using Actual or Standard Cost Accounting)
   

Run the scope for the full month – make note of the dates of outstanding transactions.  Then set the scope back to daily and post each day that has pending transactions.

Ensure that you uncheck the option “Hide Unprocessed Floor Dispositions to see if there are any outlier transactions that were disconnected from their corresponding raw material consumption transactions.

Note: If you are NOT using Shipments Pending Invoicing then do NOT post the Shipments Transaction Type.

Pick up at next meeting:

1. Note: Review help files section called “Comparing Perpetual On Hand to the General Ledger Inventory Accounts”
   

1. Run Inventory Reports:
   
1. Run “Inventory Value at Cost by GL account As of by Transaction Date” report for standard cost.
   
2. Run ‘Inventory Actual Costs by Location.”  Since actual costs are frequently adjusted it is suggested to run a report such as this.  An IQAlert may be set up to run this report at month-end during your companies desired cut-off.
   
1. What are we going to do about this considering we have no reports for Actual Cost?  – Would like to use Inventory Period Valuation – add location and act cost on that location (fgmulti) info.
   


3. Run “Inventory Actual Cost by Item and/or by Location” report (if using Actual Cost Accounting–perpetual inventory method) compare the totals on these reports to any corresponding general ledger inventory accounts to ensure that these are equal
   

1. If not using standard or actual costing (periodic inventory method)–pick the inventory report that suits your needs to properly reflect cost of goods sold for the period. 
   

1. Go to Bank ManagerReconcile all Bank Accounts to the end of month bank statements.  Print the Bank Reconciliation report when complete.
   
2. 
   
3. Make sure that all items affecting the General Ledger have been posted:
   
1. All reversing and recurring journal entries for the month posted to the G/L.  
   
1. Hint: create G/L templates for recurring entries to save time when entering journal entries e.g. depreciation accrual, month-end adjusting entries.
   


2. Make any new accrual (reversing) journal entries needed to adjust G/L accounts to the appropriate monthly amount. 
   
1. 
   


3. Go to System Set-up, System Parameters, G/L Set-up, Define G/L Periods, and change G/L Status to “CLOSED” so that nothing further can be posted to the month.
   
4. Run a Trial Balance Detail report and check all general ledger transactions to ensure that these have been posted to the correct G/L accounts.  Do journal entries to make any corrections.
   
5. Financial Reports are now ready to be generated.
   

YEAR-END CLOSING PROCEDURES

1. On the last month of the Fiscal Year, process all the task and steps from the “MONTH-END CLOSING PROCEDURES”
   
2. Make sure that all items affecting the general ledger for the year have been posted.
   
3. Create your new Fiscal Year that is subsequent to the current year.  Reference the Define GL Periods Section.
   

Note: The fiscal year usually needs to be created well in advance as it is used for EIQ budget model, Forecast and other features.

1. Current Earnings (P&L) automatically rolls to the Retained Earnings account and the Revenue accounts and Expenses are adjusted to a zero start balance.  The roll is based on the GL calendar dates assigned to the year in GL SetupDefine Periods. There is no manual JE required. 
   
1. In order for this to occur, confirm that your Retained earnings GL account is linked to account type called “RETAINED EARNINGS”.  
   
2. There can only one GL account linked to that account type per Eplant.  Create a link to Account Type Setup section.
   

We need to add to help files in Account Type Maintenance, Trial Balance and Financial reports that

In order for stock Financial Report to calculate the Net Income we need Acct type 

Need time of Retained earnings roll.

Do we need this statement to cover our liability?

These procedures are based on the assumption that all system users are familiar with the EnterpriseIQ software that bills of material are correct, that customer and vendor master records are accurate, and that other underlying data is correct, thus insuring the integrity of the output.  The tasks outlined here can be done in the order in which these are written given the normal timing of closing a month.