Closing an Accounting Year End

Overview

Quick view of the year-end closing process:  

  1. Make sure all of your income and expense accounts have a closing account, either the default from the closing account set at the Fund level or overrides at the income and expense account level as desired.
  2. Make sure every period/month is "soft closed", what we call "Mostly Closed". 
  3. Check those financials one last time, because the "hard close" locks everything down. 
  4. Execute the steps in the "hard close" process on the last period of the fiscal year, which "hard closes" every period for that fiscal year. 

Make sure all income and expense accounts have a closing account

  1. Run the Update P&L Closing Account query (in the General Ledger Workspace or query#50360) and confirm that each income and expense account has a Closing GL Account assigned.
    1. Where Closing Accounts Come From
      1. Check your list of Funds to make sure that each has a default closing account assigned.  
      2. Exceptionally, you can assign an override closing account on a specific GL account by opening the GL master, going to the General tab, and entering in an Override GL Closing Account.
      3. Refer to Assigning a Profit & Loss (P&L) Closing Account

Make sure all periods are "soft closed"  

It is strongly recommended that schools "soft close" each period as part of their regular, monthly closing process.  Even if you do, you'll want to make sure that each period  still shows as "Mostly Closed" in the system when you prepare to do the year-end close, since any adjustments made to a period after it has been "soft closed" will cause the "Mostly Closed" check mark to come off, as it should.  (The Business Office can manually flag a period as "Posting Prohibited" to prevent changes to soft closed periods prior to doing the fiscal year end hard close.  This flag can be added and removed as desired, until it is locked by the year-end close process.) 

  1. On the General Ledger home page, in the Other section, click on Fiscal Period Definitions, make sure the Fiscal Year you want to close is selected in the query, and click on Run Query.
  2. Execute the "soft close" process for any periods within the fiscal year you wish to hard close that are not checked as "Mostly Closed". 

"Soft Close" Process

  1. Create GL Monthly Summaries (creates summary data for each GL account for a specified accounting period).
    1. Click on Create GL Monthly Summaries.1
    2. Select a Fiscal Year.
    3. Select an Accounting Period.
    4. Click Add GL Monthly Summaries.
      1. This process will automatically check the "Mostly Closed" box on the period/month.
  2. Run a Trial Balance for the period to confirm that things are correct
    1. If things are not correct, make accounting adjustments as needed, and then rerun the GL Monthly Summaries again to refresh the table with the updated summary data for each GL account.
      1. Any adjustments made to the GL will automatically "remove" the "Mostly Closed" flag. 
    2. Repeat as many times as needed.
  3. Note:  Once a period is soft closed, but before you're ready to hard close the fiscal, you can optionally check a period/month "Posting Prohibited" to prevent entries from being made.  (And you can uncheck this as needed.) 

Check those financials once last time

  1. Run a last Trial Balance as of the final period and SUM by Account Type 2.  Save in case there are any questions about the closing.  (Refer to query number 53860 "GL Trial Balance _Summary by Account Type 2)" in the Workspace/System/General Ledger section.) 
    1. Engineering would have to open any years  hard-closed in error.  

"Hard close"/final close the year 

Run a Final Close on the LAST PERIOD of the Fiscal Year

  1. Click on Create GL Monthly Summaries.
  2. Select a Fiscal Year.
  3. Select an Accounting Period.
  4. Toggle Final Close? to Yes.
  5. Click Add GL Monthly Summaries.

Zero P&L Accounts on the LAST PERIOD  of the Fiscal Year 2 

  1. Click on Create GL Monthly Summaries.
  2. Select a Fiscal Year.
  3. Select an Accounting Period.
  4. Toggle Zero P&L Accounts? to Yes.
  5. Click Add GL Monthly Summaries.


Footnotes

  1. Financial statements (built with the FINS Reporting Tool) are designed to run off of journal entries.  However, comparisons to prior period data, whether for budgets for financials, read the GL Summaries.  Also, the Trial Balance will run more slowly without the GL Summaries, as the system would need to calculate the Trial Balance data for the requested period rather than reading it from the GL Summaries. 
  2. If the P&L balances are never zeroed out, there will be limitations doing period-over-period comparisons in the financial statements.