As 2021 draws to an end, many companies will start looking at closing the financial year too. If you are a Sage X3 Business Cloud user, here is an overview of the Year-End Closing function in the product.
The Fiscal Year End function FIYEND (Financials > Period Processing > Fiscal Year End) closes a Company’s fiscal year and generates the corresponding accounting entries with the document type “NEW”. The fiscal year-end processing is done on a single screen. To get started, you’ll have to specify the company for which the fiscal year will be closed, the document type, and the journal on which the new journal/document/invoices must be generated. The start date for the new fiscal year is automatically displayed. After the process is launched, a log file will trace all processed operations.
The Year-End Simulation function should be run for the ‘new year’ before closing a fiscal year for the ‘current year’.
The Year-End Simulation (SIMULFINEX – Financials > Utilities > Year-End Simulation) can be run to simulate what the Fiscal Year-end function will do.
It would be best to use the year-end simulator for cases where the previous fiscal year must remain open for a period into the current year. Please note, there are no journals created, nor is the fiscal year closed, but it will roll the balances forward for any asset or liability accounts. Performing a year-end simulation allows you to run a trial balance for the new year without formally ‘closing’ the current year.
A few Preliminary Setups
- Verify that NEWPR Document Type is created.
- Verify that NEWPR Journal Code is created.
- Account classes must be set up correctly, and subsequently, each General Ledger account is classified correctly. These steps are essential in determining whether or not to carry forward opening balances into a new year.
Checklist for closing the year:
- Set SUP General Parameter ENDDAT to 12/31/xx, where xx is a couple of years in the future.
- You must open the next fiscal year before closing the current fiscal year.
- Execute the Dimension Balance Recovery function if necessary; you need only to run the Dimension Balance Recovery function if the dimension views have changed or new dimension views have been added.
- Validate all invoices.
- Validate all receipts and payments (Batch Posting).
- All recurring journal entries must be generated and posted.
- Validate all journals before closing. Take note that if the company is using Simulation journals, there may be other functions to execute before Final Validation, such as changing the status of Simulated journals to Actual journals.
- Must enter price updates for the following year.
- Cost transfers/cost calculations must be entered/updated for the next fiscal year.
- Must close all periods for the Current Fiscal Year.
- All users must be out of Sage ERP X3.
It would be best if you ran CLOPER, a Pre-Closing verification report, before the year-end closing procedure. This report will list out any open items that you may have missed before a successful year-end close.
Year-End Process
The Year-End Process will shut down the Journal Status Monitor. Therefore, when executing Year-End, the log displays two journals with NEWNP document types. The first entry closes out the current fiscal year (Rolls forward Balance Sheet account balances and posts the Net Income/Loss to the New Period Suspense account – ANOUVO). The second entry clears out the New Period Suspense account and DR/CR the Retained Earnings account. To view the closing journals, restart the Journal Status Monitor.
Please take note: the ‘Closing Document’ field should be blank.
The two sample closing journals are referenced below:
Year-End Simulation
Year-End Simulation function can be run for cases where the previous fiscal year must remain open for at least a month into the current year. This function will roll forward the ending balances for the Balance Sheet accounts without creating the closing journal entries or permanently closing the Fiscal Year. By simulating the close, the monthly statements will include the correct opening balances until the previous Fiscal Year is ready to be closed and retained earnings calculated.
Prerequisites
Before you get started, please make sure of the following to ensure correct balances:
-
All users are logged off the system
-
Journal monitor, EDI monitor, and ADC monitor are stopped since they are considered a user.
General parameters
Setup, General parameters, Parameter values/CPT chapter (Accounting), FIY group (FY end)
The following general parameters may change the way the function is working:
Accounts
Setup, Financials, Account Classes (GESCLS)
Account classes must be set up for “carry forward” amounts.
-
Yes: The carry-forward amount is carried to the following fiscal year, either in a simulated manner if the fiscal year under progress is not closed or via the carry-forward entry when starting the fiscal year closure.
-
No: The closing of the accounts is globalized in the results of the following fiscal year, either in a simulated manner if the fiscal year under progress is not closed or via the carry-forward entry when starting the fiscal year closure.
If any account carries a balance, that shouldn’t check the account class associated with the GL account.
Periods
Common Data, GL Accounting Tables, (Fiscal) Periods (GESPER)
-
All the accounting fiscal year periods should be closed, but this isn’t required for the year-end simulation function.
-
It would be best if you opened the new fiscal year before running the year-end simulation.
Users
Development, Utilities, Verifications, System monitor, Users (PSADX)
-
All users must be logged off the system
-
The journal and EDI monitor and ADC monitor must be stopped since they are considered a user.
-
Having users logged off will ensure balances are reflected correctly.
Have queries? Is the process stuck somewhere? Contact us today for expert support.
How to Resolve this error? We assume that by now you have a robust backup process in place. Implementing any fix without proper backup in place in risky. Get in touch with us it you aren't sure of backups. The following steps explain how to resolve the above mentioned query: 1. Go to Maintenance | Inventory | Transaction Types. 2. Ensure that the INV (Invoice) and IS (Issue Stock) transaction types (or relevant transaction type) have both valid debit and credit GL accounts selected. 3. Also ensure that where Inventory / Customer / Supplier Groups are used, that relevant valid GL accounts are also used in these records. 4. Save all changes and then reprocess the source document
When running the GL Relink, Evolution needs to check for, and correct GL related database inconsistencies. If it finds any GL transactions with a transaction date prior to the date mentioned above, it has to change them to this date.
How to resolve this?
The seriousness of encountering this problem is quite obvious with having incorrect historical report data as a result, if your company has any transactions prior to this date. The only way to resolve this matter would be to restore the backup that was made before the GL Relink (or Purge first year was ran), and to recapture any transactions that were processed after the GL Relink.
Finally, it is highly recommended that users should rather make use of the period blocking feature on the Company Details | Accounting Periods screen to safely prevent transactions on specific periods, instead of changing the above mentioned date.
Note that it is even possible to block transactions to specific periods per specific agents as can be seen below.
