Accounting Year End

Preparing for Year End

Complete the following steps to prepare for year end.

1. Do not run a month end for period 12
   The period 12 month-end routine is completed during the year-end process.
2. Add as many periods to the Control Record as needed to complete the year end verification (9-6-13)
   This will enable you to continue working in the next period without closing the year. If additional periods are not added, invalid transactions with a period of XXYY will result.
3. Verify that all protected account information is correct
   Make sure all payables, receivables, payments, checks, inventory, floorplan, deals, work orders, and payrolls have been entered and posted in period 12 as needed. Also verify that all bank deposits have been updated and the bank reconciliations have been done. Process all sales tax. Record all adjusting journal entries. Remember that only journal entries to non protected accounts can be made to that year once it is closed. Reconcile the Big 4 (AP, AR, Inventory, and Floorplan) to the Balance Sheet.
4. Verify that all necessary general ledger accounts exist
   A general ledger account cannot be added for a year once the year is closed. Make sure all adjustment accounts for journal entries are in place before closing the year.
5. Verify Parts Value to GL Value
   Reconcile the Parts Value Report (3-3-9) to the general ledger balance after the parts year-end routines have been performed.
6. Move Parts Sales History (3-7-11)
   This routine is mandatory and MUST only be completed on the last day of your fiscal year end (not the last day of the calendar year unless they are one and the same). This routine moves the parts sales history from the current year to the previous year as displayed in 3-2-6.
7. Post transactions (9-1-3)
8. Review the Balance Sheet
   Review the Service Labor Payable account to verify that the service technician payroll is posting correctly. Review the Salaries/Wages/Commissions account to verify that the salesman payroll is posting correctly. Review the Sublet Payable account to verify that the sublet work is being billed correctly. Review the Deferred Parts Liability account to verify that the parts and purchase orders are being received into inventory correctly. Review the License Payable account to verify that the license fees are being paid correctly. Verify that all accounts have reasonable balances.
9. Review the P&L
   Verify that the income and expense accounts look reasonable. Review any accounts that have an incorrect balance (such as an expense account with a credit balance or an income account with a debit balance) to verify correct posting.

Closing the Fiscal Year

• All users should be logged off the system while performing the year end routine.
• Never break out or turn off your terminal/computer during the year end routine.
• Although it is not necessary to make an appointment, plan on running the year end routine while IDS support is available.
• Plan on running the year-end routine on a reliable workstation with a reliable printer.
• Read the help screen directions available through menu 9-6-H1.
• Follow the directions given throughout the year end routine.
• Make sure to get a good back up and keep in a safe place. Do not put the tape back into rotation. Any discussion of the floppy backup can be ignored. This is no longer part of the routine.
• The following will be completed by the year-end program:
  • Validate the general ledger
  • Post transactions
  • Print trial balance – period 12
  • Generate closing entries to Retained Earnings
  • List transactions created by the routine
  • Post year-end closing entries
  • Print closing trial balance – CLO”YR”
  • Move data to history

Year-End Close (9-6-1)

1. A message stating that no one should be on the system while this routine is run displays. Verify that everyone is off the system. When ready, enter Y.
2. The next screen shows the current year (the year that you are closing). Verify that this is the correct year and enter Y to continue. The next prompt is to specify which printer you will be using. Enter P for the system printer or S for the slave printer.
3. This routine clears and rebuilds the sub legers, validates the General Ledger and posts transactions.
4. The Trial Balance for period 12 prints.
5. Verify the Retained Earnings General Ledger account number. The Retained Earnings account pulls from the standard parameters setup in 11-5-9. If the account is correct, press the Enter key. The closing entries for the income and expense accounts are created. If the account is not correct, enter the correct account here. Be sure to change the account in the standard parameters when you have completed the year-end routine.
6. A list of the closing entries prints and the closing entries are posted.
7. The Trial Balance for the CLO period prints.
8. The General Ledger for the current year is moved to a new file.
9. Verify and enter the new fiscal period end dates. Be sure to have a calendar handy to allow for holidays or any office closures that will affect the month or year end closings.
10. Once the fiscal year has been updated, press the Enter key to complete the year-end process.
11. Press the Enter key again to exit the year end routine.

Journal Entry for Last Year (9-6-3)

1. After the year end routine has been run, this is the only routine which will allow a journal entry into last year’s General Ledger.
2. For any non-protected account balance corrections, journal entries can be made in this routine. The transaction will post immediately and Retained Earnings will be updated at that time, if necessary.