Image
IT Managed Services Provider
Category:
Tech Tea

“…You don’t have to go home, but you can’t stay here”
-That one guy from Third Eye Blind, or maybe it was Semisonic?

While the rest of the world is spreading holiday cheer, we accountants are making our annual transition into Ebenezer Scrooge. The end of the year is loaded up with making year-end adjustments, processing 1099 vendor forms, and closing periods. If you’re lucky enough, you get to have your work put under a microscope and have your auditor pull out his fine-tooth comb to go over every detail.

‘Tis the season for stress that keeps on giving into the new year, and until the opinion has been rendered. Although my present does not come wrapped, or under a tree, I can help with some of the procedural activities you will need to do in order to close your books within Business Central (BC), and get your ERP ready to tackle another year of operations.

As far as the stress of your outlook app continually going off, the endless hail of printing documentation and preparing reports, or trying to keep your staff in line (which can feel like herding cats) you are on your own. But hey, there will be plenty of sweets to comfort these stressors and a cocktail wouldn’t hurt either. So, grab yourself a cookie and a glass of cold milk while jolly St. Nick comes to town to help with your year-end close.

Business Central makes printing out your 1099 forms a breeze. That is, of course, if you took the time to elect this option at the time you created your vendors. BC has been loaded with all the new codes and will show you the minimum amount reported that would be required to file. You will also want to make the selection on the vendor card if they are a natural person, or a business. If you have processed transactions before making this election on the vendor card, not all is lost but you will need to do some work for those historical transactions to be added to the 1099 list.

You can view the 1099 history:

  • Navigate to the vendor.
  • In the ribbon click on navigate>history>1099 statistics.
  • If you want a printed report you can select report>Vendor 1099 Information.

When it comes time to print your 1099 forms, you will want to first load up your printer with the forms that can be purchased at any office supply store, and then again click>report. You will see that on the sub-ribbon you can print either 1099-Misc, 1099-Div, or 1099-Int. This can also be accomplished from the main vendor screen to print all of your 1099 forms at once.

The first thing to note as we get started is that Business Central operates on a soft close. This means even after a period has been “closed,” you may still post adjusting entries to it. Therefore, you could be closing periods every month so that less work needs to be done at the end of the year. In order to have BC recognize which periods may be hit, I want to direct you to the General Ledger setup.

In the General section of this card you will find the “Allow Posting From/To” fields. This lets BC know which periods can be hit. If you are going to roll forward by closing by month, you will want to have this set to the current month. As you close periods this field will need to be manually updated to the next current month. If you have a controller, or other accounting person that you would like to have access to post anytime during the year, then you need to update their information on their user card.

Once navigating to “Users” and selecting their name, you will find these same fields that can be populated with the fiscal year instead of the current month. Remember, the dates provided on the user card override those in the general ledger setup! This would mean marginally more work for you and/or your staff at the monthly level but could save you some time and energy come December. If you just don’t have the resources to allocate throughout the year, you can still get your year wrapped up and we are here to help you with that. 

The process will start with posting all open activity. Posting all finished productions orders, sales orders, purchase orders, etc. and reconciling those to the controlling accounts (A/P, A/R, Inventory, and Cash). Next you will want to do some verification to make sure that your aging reports match the G/L, your inventory valuations match what’s in the master record, and most importantly what is on your bank reconciliation matches the cash account(s). 

If you have ever looked through the accounting periods screen, you may have noticed that there is a close year process there. It is important to note that this process will not zero out your income and expense accounts. Consequently, it will not close them to your retained earnings either. This is only to let the system know that the year has been closed and locked. You will need to run the Income Statement close for this to happen.  

To run the Income Statement close procedure:

  • You will first want to make sure that you have a general journal batch in BC that is clean.
    • By clean I mean that there are not any other journal entries sitting there waiting to be posted.
  • I would also suggest that you have a batch dedicated to these closing procedures so that other employees know not to post out of this batch, as it is reserved only for closing entries.
  • You will use “Tell Me” magnifying glass in the top right of your screen and type in “close income statement” to navigate here.
  • Once you click on the corresponding task, you will be greeted with some options.
  • You will be asked to enter the Fiscal year end date, the general Journal Template and Batch names, and most importantly the GL number for your retained earnings.
  • Once this information has been filled in, you click “ok” and the system will let you know that the entries have been created in the general journal batch that you have provided.
  • Navigate to it, and you can then look over the entries that have been made.
  • All that is left to do is post the batch.

Once this has been completed, you will want to head over to the Accounting periods card. This is easily navigated to by again clicking the “Tell Me” and typing “accounting periods.” Here you will find a complete listing of all years of data in your system.

  • You will then click process>close year.
  • The system will prompt you, asking if you would like to close the fiscal year 01/01/20XX to 12/31/20XX.
  • Select yes, and you will see that the check marks for closed in the months of the year you just closed will appear.
  • The date locked check box will also be marked, but this does not mean that you cannot post to these periods.
  • If an adjusting entry needs to be made to a prior period that has been previously closed, you will need to have the correct permissions but it will still be possible.

Whether you close the income statement first, or the accounting period does not matter. I would suggest however, that you game plan how you would like to operate your year-end procedures so that you have a strategy, and nothing gets missed.

I hope that I was able to clear up any questions that you may have had on what to do at year end and could alleviate any stress associated. Also, I hope that you have a Merry Christmas, Happy Hanukkah, Happy Kwanzaa, or whichever holiday you celebrate this time of year. Enjoy time with family, even if it is a virtual call. Hey, at least we can be thankful there won’t be any lingering guests this year and you can close the party with a couple clicks of your mouse. Just like you did in Business Central.

Please do not hesitate to contact Nick Conley, support@manersolutions.com, with any questions on year end close.