Financials Year End Processing

1. Financials Year End Processing Presented by PARADIGM Business Solutions, LLC Matt Pieper mpieper@paradigm-erp.com

3. General Ledger • To Review - Closing the Period is completed by running the Period Closing GL199 program. • The GL199 Creates Reversing Journal entries • Labels the period as Closed • Increments the current period by one, or in case of Year End resets the General Ledger to the first period. • Changes the status of the record header for processed journal entries from Posted to Historical.

4. General Ledger Additional processes at Year End • Rolls account balances so that the current year balances reside in last year and the last year balances reside in previous year. • Calculates beginning balances for the new year for all balance sheet accounts. • Creates consolidation records for the new year. • Moves current year period ending dates to last year and next year period ending dates to current year. • Calculates period end dates for next year. • Creates a closing entry with a status of History in period 99 that transfers the balance in the undistributed retained earnings account to retained earnings.

5. Recommended Year End Close Procedures • Complete a General Ledger system Back Up. (Recommended) • Review Next Calendar Year Dates and update as necessary. • Final Close all periods of Last Year using GL199. (Required) • Run financial statements for last year (GL291, GL292, GL293) to make sure company is in balance. • Roll Budgets forward one year using FB120, to continue maintenance free reporting within the current fiscal year. (Optional) • Verify all systems are closed. Check GL01. (Recommended) • Run Currency Revaluation Program. (Optional) • Run the Translation calculation program. Optional • Save Last Year actual/unit data into a budget. Run FB120 (Optional – required prior to 7.0 version of software)

6. Year End Close Procedure - Continued • Close the last period of the current year using GL199. (Required) Recommended closed with a Limited Status. • What is the difference between limited and final close status? Other optional processes: • Adjust Cost Allocation valid posting date ranges. CA10.2 • Adjust Recurring Journal valid posting date ranges. GL70.2 • Delete Transaction History GL300 • Delete unused posting accounts from accounting units. (Optional) Run GL122 to delete posting accounts no longer used that have not had activity in the last two years. • Delete unused detail accounts from the chart. (Optional) Run GL100 to delete posting accounts that are not used any longer and haven’t has activity for more than two years.

7. Accounts Payable • Period Close AP195 is run to ensure that all transactions for the period have been processed and interfaced to the general ledger. • After the Period Close AP195 has been run for the last period of the year the Vendor Balance Year End AP199 should be run. • This program has two purposes: • The program requires that the new year period end dates to be entered and then updates them. • Transfers current year vendor balances to the last year balances. • Archiving/Purging Vendor Invoices • Archiving invoices is used to speed up batch and on-line performance. • May be used instead of purging • You can inquire and or report on archived invoices. • Purged invoices removes records • Purged invoices may be archived into data files outside of Lawson.

8. Accounts Receivable • Closing the Accounts Receivable Application at year end requires no additional programs. • The AR199 is run with the year end parameter selected with “Y” • The AR199 at year end will in addition to its normal processes rolls the following transaction amounts from the current year periods to the corresponding last year periods for: • Period Billed • Chargebacks • Credits • Write-offs • Payment • Moves any value for the next year into the first period. • Moves the Invoice Payment Average IPA and Days Beyond Terms DBT totals to last year to update customer statistics. • Rolls the ending balance to the balance for the year, as well as period, on the Audit Summary AR194. • The AR199 should flag you to run the year end option for the last period. • Do not run the AR199 twice. • To keep system running smoothly you may wish to purge historic invoices using AR300 and Customers using AR301.

9. Activities • Closing the Activities Application allows the user to control transactions for balancing purposes. • When activity transactions are posted, they post to the period, year, and Life to date activity balances. This is based on the calendar associated with the activity group. • A majority of users do not close activities because the Activities application does not have the ability to back post to a closed period. • There are no special procedures for year end processing.

10. Asset Management • At year end a special review of assets placed into service is required. • This rule requires that if 40% or more of all assets placed into service in the last fiscal quarter special depreciation calculations apply. • To verify if the 40% rule applies. • Release all transactions using AM170 • Run the Additions Report AM220 for all assets put into service for the entire year. • Run the Additions report AM220 for all assets put in service in the last quarter. • Compare the reports to verify if the last quarter assets where at least 40% of all assets placed into service for the year.

11. Asset Management • If the 40% rule applies you may adjust the last quarters in place assets depreciation conventions using the Mass Adjustment program AM125. • In the convention field of the Asset Book Adjustments tab enter the MQ and choose the change form action. • Then update the assets by running the Processing Release AM170. • Then complete the normal period close processes. • Run Depreciation Calculation AM180. • Run system reports and verify asset information. • Once satisfied that the reports and assets are correct post and close the period by running Period Close AM190. • Running AM190 with the release parameter set to yes is irreversible.

12. Asset Management – Con’t • To close year end run year end reports. • Addition Report AM220 • Adjustment Report AM225 • Transfer Report AM230 • Disposal Report AM240 • Projection report AM255 • Asset Report AM260 • Property Report AM265 • Account Balance Report AM270 • Current Year Deprecation Report AM280 • Book Comparison Report AM285 • Tax Credit Report AM290 • Recapture Report AM292 • FASB Reconciliation Report AM295.

13. Asset Management – Con’t • You can not run these reports once the year end is processed. • Back Up your data. • Run the Year End Close AM195 to close out the reports. • Verify that the year-end close has been successful by opening Calendar AM01.1 and inquire by company and book.