Closing out the year on GP is a process that takes time and needs to be completed in a specific order. As mentioned yesterday, the closing process is a 14-step procedure that starts with closing out each module before moving on to posting, creating a new book, and ultimately closing the books. As we go down the list, we would today like to look at some of the new features and discuss the core modules. Tomorrow, we hope to answer questions on the payroll, W-2 Functionality, and ACA considerations before moving to final tips and tricks on our Friday blog.
To see the entire list of updates made to the 2015, 2016, and 2018 editions of the GP platform, and to download, click here.
At the core of the year-end close is the General Ledger.
One of the many modules that you will need to close at the end of the fiscal year before running the final GL close (if you have the module integrated with general ledger) is the inventory module. While there were no updates to Inventory Control in the Year-End Update, Microsoft offered some notes on closing inventory in GP, discussing what goes on when you close inventory:
- For items which you are maintaining summarized sales history, all summarized current-year quantities, costs, and sales amounts are moved to last-year.
- Current Quantity on Hand becomes Beginning Quantity.
- Quantity sold is zeroed in the Item Quantities Maintenance window.
- From here, you have the option to remove discontinued items, sold purchase receipts, or sole lot attributes, and update item standard costs.
Following Inventory management, Microsoft notes that the next step is to complete receivables management. The year-end update features no changes to the receivables management functionality, and depending on whether you use calendar or fiscal year, there is a slightly different process:
- The Calendaryear end close clears the Calendar Year-to-Date Finance Charges and moves them to the Last Year Calendar field in the Customer Finance Charge Summary window found under (Cards >> Sales >> Summary >> Finance Charges).
- The FiscalYear end close transfers all amounts other than the Calendar Year-to-Date Finance Charges to the Last Yearcolumn in the Customer Summary window (Cards >> Sales >> Summary).
To complete the close in receivables management, users need to post all transactions for the current year before following the steps mentioned in KB 857444. For even more information on closing receivables, click here.
Following inventory management and receivables, users should progress to the payables portion of the close. Before digging into the processes and practices, we need to look at a few changes and improvements added to payables. In the year-end update, the following forms have changed:
- 1099-DIV Form: Box 5 (Section 199A Dividends) has been added. Investment expenses has moved from Box 5 to Box 6. Further, all boxes have been incremented.
- 1096 Form: There are now 17 boxes, up from 15.
- Note: There are NO changes to the 1099-INT or the 1099-MISC forms.
With this said, now it’s time to look at the processes. As with the fiscal vs. calendar year note in the receivables management, the following holds true:
- The Calendaryear end close process transfers the 1099 Amount from the Year to Date column to the Last Year column in the Amounts Since Last Close view in the Vendor Yearly Summary window, found under (Cards >> Purchasing >> Summary >> Yearly Button).
- TheFiscal year end close process transfers all other amounts from the Year to Date column to the Last Year column in the Amounts Since Last Close view, also found under (Cards >> Purchasing >> Summary >> Yearly Button).
*If the Year to Date or Last Year amounts are incorrect in the Amount Since Last Close View: contact support for scripts that can be ran to correct these amounts.
- When these amounts are transferred this will also affect SmartListamounts that contain Year to Date or Last Year summary columns.
- The Vendor Summary reportwill also be affected by the transfer of amounts from the Year to Date column to the Last Year column when closing the year.
To close out the year, post all transactions for the current year, ensuring any transaction for the next year are saved but not posted. From here, make a backup of the company database. For more information, see KB 875169 and read the Payables Management Close blog.
Another pre-GL close module is the fixed assets module, in which depreciation, salvage value, and other long-term assets are closed.
There are no changes to the Luxury Auto Maximum Depreciation Deduction, but Dynamics GP 2015 now features a Fixed Asset Year-End Closing report added to the year-end close process. This optional report will print per Book, and show the Asset ID, Description, Cost Basis, YTD depreciation, Accumulated Depreciation, NBV, Placed in Service Date, Depreciated to Date, Quantity, YTD Maintenance, and Status for all assets impacted by the year-end close process.
Microsoft recommends you close fixed assets after payables management, and notes that during the closing process, all assets must be ‘depreciated through’ the last day of the current Fixed Assets year, doing so for each book you have set up, and closing all books before you run depreciation for the new year. For more information on running year-end close in Fixed Assets, click here.
The final module that you close out in your year end is Analytical Accounting (Note: Payroll is to be completed at calendar year—regardless of your year-end. We will discuss this in a coming blog). Analytical Accounting is often one of the more time consuming parts of the close, due to the processing power required.
Microsoft notes a wide range of considerations to make in closing out AA. First, there are no AA changes in the Year-End Update.
Second, AA closing is integrated in the GL close—there are no separate steps.
Third, one thing to be aware of in AA is this: If your Financial reports need to pull data from AA tables, (such as Management Reporter Data Mart), be sure to give yourself plenty of time to go through all the information in KB Article 2910626 before you close the General Ledger year.
Fourth, if the AA data does not match General Ledger data, and financial reports are pulled from AA tables: This could skew your Financial reports (when AA tables are not consistent with General Ledger) and you won’t balance to the General Ledger Trial Balance reports. Microsoft discusses the reasons this may happen in their blog.
Questions? Need Assistance? Contact Us Today!
At Wipfli, we’ve been in the business of supporting Microsoft Dynamics GP for years, and have helped companies like yours to ensure a speedy, accurate, and hassle-free close. In tomorrow’s blog, we will cover additional tips and answer other commonly asked questions, but if you don’t have time to read that one and you take one thing from this blog, let it be this: Make backups. We can’t stress that enough.
If there are any close issues, please contact firstname.lastname@example.org immediately to resolve questions or concerns.