A2000 ONLINE SUPPORT DEPARTMENT

KNOWLEDGE BASE

DESCRIPTION         What do we need to do for doing a year-ending function for our accounts? What  are the concerns of doing a Year-End?

Year Ending is a function in A2000ERP to transfer current year P&L balance into a retained earning account (balance sheet item). This function allows the earnings from current year to be carried over to the new financial year. 

Yes, it is imperative to perform a Year Ending function. Otherwise your Trial Balance for the new financial year will be out of balance (with the P&L from previous financial year). However it is not necessary to perform this immediately after the year ends.

The following Checklist is a requirement prior to a Year End process to be done by the Accounts Manager: 

 User must follow this checklist, which ensures:-

3.1 SYSTEM DIAGNOSTICS – run Diagnostics in System Manager à Diagnostics à All Diagnostic Routines. Clear all the errors shown in the diagnostic page to have a system with a “clean bill of health” in the transactions.

3.3 STOCKS VALUATION AMOUNT TIES WITH GL STOCK CONTROL A/C – without this validation, you will surely not pass the audit process. To do a Year Ending, system mandates that Stock Valuation must tie with the GL Stock A/c.

If amounts do not tie, perform Recalculate Product Cost utility in Inventory module Via Inventory à Operations à Recalculate Product Cost. With this utility, you can isolate stocks whose costs are incorrect due to negative stock or entry sequence problems. Run this utility and repost until there is no negative stock error – the Stock Valuation must tie with your GL Stock A/c.

          3.4 OUTSTANDING CUSTOMER BALANCE TIES WITH TRADE DEBTOR A/C –your sum of outstanding customer balances must tie with your GL Trade Debtor A/c. If there are issues, refer to the Diagnostics, and correct the numbers before proceeding.

          3.5 OUTSTANDING SUPPLIER BALANCE TIES WITH TRADE CREDITOR A/C – your sum of outstanding supplier balances must tie with your GL Trade Creditor A/c. If there are issues, refer to the Diagnostics. Correct the numbers before proceeding.

 

3.6 AUDIT ADJUSTMENTS – if there are audit adjustments and reclassifications, please complete these transactions before proceeding to do a Year Ending. You will not be allowed to do further transactions in the ended year once the GY is posted.

 

3.7 LOGGED USER – user performed this checklist will have their User ID logged into this, in order to check back who pass this entry and the date it was performed.

IMPORTANT – if the checklist does not provide a clean bill of health in your numbers (especially if audit is not a requirement), do not proceed. The data carried over to the new financial year will create problems for you later on.

4. HOW DO I PERFORM THIS PROCEDURE?

If this is the first time you are doing Year Ending function, please ensure the options are properly setup:-

System Manager à Transactions Tab à Account Posting Setting à Year Ending                        

• Transaction Type    - choose type = GY or GJ (preferred is GY)
•  P&L Account            - use an Income Type to post Current Year Profit
• Balance Sheet A/c - use a Liability Type to post Retained Earnings accounts

The GY transaction will need to follow a particular numbering scheme.

If this is the first time doing this, check that this is setup at:- System Manager à

Transactions à Transaction Number Maintenance

• Look for GY Transaction in the list. If it exists, you are good to go. If it doesn’t exist, go to last record and type GY to let system assign a numbering schema.

Once the setting is done, you may follow this step-by-step procedure.

A. Print a copy of your Profit & Loss and Balance Sheet for file

                          *Ensure that all audit adjustments and reclassifications are filed together

B. To proceed, go to GL -> Operations -> Year-Ending Option. Enter the [FINANCIAL YEAR] to be closed.
          *E.g. - if your FY is 1-Jan 2020 to 31-Dec 2020, Choose Year = 2020. If the FY is 1-April 2021 to 31-Mar 2012, choose Year =2021

C. Fill in the control account figures.

• Ensure the Stock Valuation value ties to GL Stock A/c
• Ensure your Customer Outstanding ties to GL Trade Debtor A/c
• Ensure your Supplier Outstanding ties to GL Trade Creditor A/c
• If you had done Audit Adjustments, click the check box.

* NOTE: If the above are not in order, the YES button will not be activated to let you proceed with the Year Ending function.

D. Click "OK" to complete.

• The system will auto-create a GY entry. User can check the posting via the GY transaction at General Ledger à  Operations à  GL transactions (Journal Voucher). Example of posting (assuming Net Profit = $100,000) should be:-
                                 DR    CR

Current Year P&L A/c      100,000

Retained Earnings A/c             100,000

4.4 STOCK VALUATION LIST

*NEW* at the posting for Year-Ending, the stock valuation for the period being closed will be stored in a table as a Stock Valuation List. As long as the GY exist for the year, users are no longer allowed to perform any new transactions (or edit) anything in the closed period.

The Stock Valuation List contain records of products, warehouse quantities, unit cost and ageing date as at the GY closing date. The last GY transaction date will be basis of “opening values” in the new financial year, whenever the system performs a Recalculate Product. It will no longer access historical stock movements of past years(s) in the system.

4.5 PERIOD LOCKING AFTER YEAR END

 The GY-function will auto-lock your period setting. You may verify the financial year is locked by going to System Manager-> System Settings – Period Locking

 

5. CAN I EDIT TRANSACTIONS AFTER YEAR END?

No, a period that is close is NOT OPEN for user to edit. If users are allowed to edit past year data, it will affect closed (audited) financial reports. Stock costing will be impacted and will hit the Cost of Goods Sold Account when such edits happen.

NOTE: Another concern is when Windows account books are migrated to the web. Due to GST at line level, the system MUST NOT allow the web version to edit/post previous year's Windows system transactions.

6. IMPORTANCE OF THE YEAR-END FUNCTION?

The Year Ending function is now used to manage the integrity of past year transactions. If a GY transaction exist for the year that ended AND has posted GL transaction lines.

 6.1 PERIOD LOCKING AFTER YEAR-END - this will be set to locked status. User cannot unlock before this date. For example, if the year is ended on 31-Dec 2020, the systems will hard-lock the PERIOD LOCK to Year 2020 Period 12. If user wants to open the period, they can only open any period in year 2021 and above.

6.2 PREVENTION - all transactions in the system will be locked to prevent accidental actions at/before the Period Lock date. This includes Recalculate Product Cost and Reposting GL Transactions. Diagnostic screens will not display erroneous transactions in period that are locked.

6.3 PROTECTION - it is a universal requirement that once the account is finalized and audit is completed, no user has any business to touch prior year's transaction. In a way, this serves as a protector of data integrity

7. WHAT IF I NEED TO UNDO THE YEAR END?

It is now NOT POSSIBLE to reverse or undo a Year Ending transaction. The ONE and ONLY way to do that is to restore the database backup, up to the date the GY transaction took place. If this is done, user will be charged a Data Restoration Service Fee, and user must re- enter those transactions that were not found in the backup database that was restored.

NOTE: To avoid inconvenience and wrong closing, users must ensure all items in Year-end Checklist are in order before doing this function.

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