YEAR END CLOSE PROCESS

The fiscal year should be closed when all activity has been properly recorded and reported. The fiscal year is typically divided into twelve, thirteen, fifty-two, or 365 journal periods as defined in Setup Information. The status on each of these journal periods must all be set to “closed” which prevents any additional posting to these journal periods. The actual year-end close process does not have to be completed prior to posting entries in the new fiscal year. Transaction entry may resume at the subsidiary level, as it does during any normal month-end

The year-end close process consolidates the balances in all income statement accounts to the retained earnings account. The retained earnings account must already exist in the chart of accounts and must be designated in Define Ledger Accounts option in Setup Information.

1. Select this final journal period in the old fiscal year.

2. Post manual adjusting journal entries, as required by the company accountant and/or auditor. A manual journal entry is not required to consolidate the income statement accounts into the retained earnings account since that occurs automatically with the year-end close process.

3. Reset the status code of the final journal period to “closed” to prevent any additional posting to this journal period. Using <ALT><E> on highlighted period to open “status” window for marking “closed”.

4. If budget information is to be rolled over into the new fiscal year, journal periods for the new year must be added and the roll-over process must be completed prior to the year-end close. The ledger journal periods for the old fiscal year, which are necessary by the roll-over process, are removed by the year-end process. If budget information is not maintained in this dataset, you may skip this step.

5. Reports (output may be directed to the report spool utility to produce multiple copies):

   1. Trial Balance which summarizes each account’s balance.

   2. General Ledger Report which shows the detail of journal entries posted to each account for the current year (adjust parameters to change the range selection entry fields for the ledger period.)

   3. Any other journal reports as requested by the company accountant or auditor.

   4. Prior year balance reports may be produced since the values in this file will be over-written by the year-end process.

6. Calculate account balances and print financial statements (output may be directed to the report spool utility to produce multiple copies.) The statements may be selected for printing by detail code, profit center, and location codes. If calculating balances for comparative analysis, be sure that the correct journal periods are specified. It may be desirable to re-calculate the balances using different date ranges and/or selection criteria.

7. Make a permanent backup copy of the dataset (with users out of the system)! Attach labels to the backup and store in a safe place with a compatible version of this software. If the source files in General Accounting, Commodity Accounting, and/or Payroll Accounting have recently been purged, be sure to document on the labels that the general ledger files in this permanent backup copy match the source files located on a separate backup copy. The reports generated in SJI during the fiscal year should also be properly labeled and stored for possible audit purposes.

8. If you are maintaining a DTR Historical Dataset, run the DTR Transfer Before the fiscal year close.

9. In Live dataset, go into LDG and select any active journal period in the new fiscal year.

10. Select the Year-End Close option on the utilities Menu, (LDG > Utilities > Year End Close Out). The fiscal year to be closed should default in the entry field. Users must be out of ledger at this time.

EFFECTS OF YEAR-END CLOSE

1. The system automatically clears the Profit for Period account into the Retained Earnings account.

2. Balances in the income statement accounts are consolidated into the Retained Earning account through the end of the old fiscal year, thus starting the new fiscal year with a zero balance. Journal entries already posted in the new fiscal year re not lost.

3. A new journal period is generated to contain balances for the new fiscal year for the balance sheet accounts. The format of this journal period is YY000 where YY represents the new fiscal year and 000 is period number zero. This journal period is not listed in the Select Journal Period option.

4. A compressed journal entry is generated with the balances for the balance sheet accounts in the zero period with a data/time stamp set to 1980 to prevent these transactions from transferring through the Agris Data Transfer System unless someone overrides the transfer date prior to 1980.

5. The prior year file (PRIORBAL.LDG) is overwritten with the total amount and quantity for each journal period for each account. This file is used for financial statements comparing this period this year to this period last year.

6. The journal periods from the old fiscal year are removed from the LPERIODS.LDG file.

7. Budget information related to the old fiscal year is removed from the YTDBUDGT.LDG file.

8. The records that are deleted through the year-end close procedure are not stored in the TRANSACT.AGR file in order to permit the procedure to be completed at both remote and consolidated sites.

9. The GL Detail is purged from J07ENTDT.LDG
   This is what will take the longest in the fiscal year close.
   If time is an issue, you may want to purge SJI on a weekend, before you need to do the year end close, so that J07ENTDT.LDG is cleared out BEFORE you run year end close.

Document Written by Alisa Mueller, Updated 04/2020