Year End Closing Procedures

CONSIDER THE FOLLOWING BEFORE DOING A YEAR END CLOSING

1. Backup Your Data: One of the most important things you can do before closing the books is to backup the database.  Check and test the backup to ensure it was successfully executed. Often, the best and easiest way to recover from unwanted errors is to restore data from a backup.

2. Follow the Module Closing sequence (bottom up): The execution of one module closing can write data to another module, so closing modules in the proper sequence is important to maintain the integrity of the data.

3. Seek Help When Needed!  Be sure to Contact Us if you have any questions. We can guide in the process and advise you in best practice procedures with regard to year end closing procedures.

Specific Year End Considerations:

1. General Ledger Module can stay openIt is common practice to keep the General ledger open for an extended period of time until the audit and final year-end adjustments are complete.  This will not affect your ability to stay current with the other subsidiary ledgers that should be closed on a more real-time basis, ensuring that the day-to-day operational transactions are posted in a timely manner to the correct period.

2. Payroll Closings – Note that all W‐2’s and quarterly reports must be printed before processing the first payroll for the new year, so you will need to close out the payroll module at the end of the calendar year, in a timely manner. It would probably be a good idea to start reconciling your payroll tax reports to the general ledger in early December.

3. Update All Transactions – Be sure to update all transactions across all modules still in data entry and not yet updated. You cannot perform a year end closing while transactions remain un-posted in a module.

3. Master Console (user’s logged in) – All users should be logged out of the system before initiating a year end closing. The master can help you identify users still logged into the system, and if need be, they can be terminated from the master console by a user with sufficient permissions. You can also broadcast a message to all users from the master console, which should be done, before terminating user sessions.

Frequently Asked Questions

Can we print financial statements for the most recent year end if we have not closed the periods for the year end?
The short answer to this is yes. In a much older version of Sage, being to run financial statements was dependent on having been up to date on period end closings so that the retained earning account was correctly update with the Income Statement. That concept has not applied for some time now. You can freely print an accurate set of financial statements that will accumulate retained earning correctly, irrespective of the last year that was closed.

After executing a year end closing, can we delete accounts that we will no longer use?
No, it is not recommended that you do this. These accounts may still be needed for running prior year financial statements, or when running trend or comparative financial reports. Rather set the account to inactive. That will prevent users from posting to these accounts, but still retain historical data for reporting.

Can I open a closed fiscal year to make General Ledger postings/adjustments?
Yes, you can reopen a prior period in module setup to make an adjustment to a prior period. remember to close the period again after making your adjustment. But if your company has been audited, it is unlikely that you will need to reopen a period, unless in the rare situation where the financial statements have been restated, and in most cases that will be a prior year adjustment which does not require to reopen a prior period.

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