AX2012 ENUS FINII 11

Chapter 11: Year-End Close CHAPTER 11: YEAR-END CLOSE Objectives The objectives are: • Create a new fiscal year • Control transactions in a closing period • Hold or close a period • Create a closing sheet • Make adjustments or transfers between accounts • Transfer opening balances • Set up fiscal year close parameters Introduction At year-end, it is always necessary to: • Make adjustment entries that reflect transactions from the previous year • Print reports, including financial statements • Back up data • Create a new fiscal year and transfer opening balances Microsoft Official Training Materials for Microsoft Dynamics® Your use of this content is subject to your current services agreement 11-1 Financials II in Microsoft Dynamics® AX 2012 Fiscal Year-End Tasks The following list assists in closing a fiscal year in Microsoft DynamicsđAX Create a new fiscal year • Set the appropriate periods to On hold in the fiscal year being closed to prevent any accidental postings • Open the year-end closing period in the fiscal year being closed to enable posting of any necessary closing entries • Make any adjusting entries by using either the closing sheet or by using the general journal • Print final financial statements • Print 1099s for any vendor that requires a 1099 statement • Back up data • Transfer opening balances into the new fiscal year either automatically or manually Check the related General Ledger parameters before the transfer • Reset number sequences This is an optional step, and not recommended unless required by local authorities NOTE: If you use the Inventory module, run the Inventory Close process through the end of the fiscal year For more information about this process, refer to the Distribution and Trade training material Create a New Fiscal Year Consider the following when you create a new fiscal year: • The first step in the year-end closing process is to create a new fiscal year • Create the new fiscal year before you close the prior year because the year-end close usually does not occur immediately • Immediately after the new fiscal year is created, enter transactions The previous year does not have to be closed before you can enter the next year's transactions Procedure: Create a New Fiscal Year Follow these steps to create a new fiscal year Click General ledger, click Setup, then click Fiscal calendars Select a fiscal calendar, then click the New fiscal year button Enter the Start of the fiscal year date of the company and the End of the fiscal year date Type in the Fiscal year name of the fiscal year 11-2 Microsoft Official Training Materials for Microsoft Dynamics® Your use of this content is subject to your current services agreement Chapter 11: Year-End Close Define the length of each accounting period by entering a value in the Length of period field and then enter the defining the value in the Unit field The options in the Unit field include the following: o Days o Months o Years Depending on the structure of the company's operations, you may have to divide a period to obtain the required periods Creating, deleting, and dividing fiscal periods is discussed in detail in the Financials I training material Click the Create button to create the new fiscal year Control Transactions in a Closing Period When you create a new fiscal year, you might have to control or stop transactions from updating the ledger accounts during the closing process To stop transactions set the period or periods to "on hold" This differs from setting it to closed, because you can reopen a on hold period, but you cannot reopen a closed period When a period is closed, the system displays a warning message that requires a confirmation to indicate the period actually should be closed because the action is irreversible CAUTION: A closed period cannot be reopened Therefore, permission to close periods and years should be highly restricted Procedure: Setting a Period Status To view and control the period status, follow these steps: Click General ledger, click Setup, and then click Ledger Select the calendar from the drop-down menu in the Fiscal Calendar field Click Ledger calendar on the top left corner of the form and it will open the desired calendar Expand the calendar tree in the navigation pane and click on the desired period Use the drop down menu under the Period status field to set the period status Microsoft Official Training Materials for Microsoft Dynamics® Your use of this content is subject to your current services agreement 11-3 Financials II in Microsoft Dynamics® AX 2012 The three available period statuses include: • Open - Accounting transactions can be recorded in this period • On hold - Accounting transactions cannot be recorded in the period This status can be changed to Open or Closed • Closed - Accounting transactions cannot be recorded in the period If a period has a status of Open, you cannot select Closed unless the previous period also has a status of closed NOTE: A closed period cannot be re opened or put on hold NOTE: When a fiscal year is being closed, you can select the Set fiscal year status to closed check box in the General ledger parameters form This sets all periods in a fiscal year to a Closed status You can also select the Check journalizing check box in the General ledger parameters form if you want to verify whether periods are journalized before they are put on hold or closed FIGURE 11.1 CALENDAR, PERIODS Procedure: Change a Module Status in a Period A company might want to close all the modules, except for the General Ledger, during the closing process This allows for specific user groups to enter transactions and leave the period open Click the Module access level fast tab to control who can post transactions, but not stop the period Follow these steps to change a module status in a period Click General ledger, click Setup, and then click Ledger Select the calendar from the drop-down menu in the Fiscal Calendar field Click Ledger calendar on the top left corner of the form and it will open the desired calendar 11-4 Microsoft Official Training Materials for Microsoft Dynamics® Your use of this content is subject to your current services agreement Chapter 11: Year-End Close Expand the calendar tree in the navigation pane and click on the desired period Click the period to edit, and then click the Module access level fast tab In the Access field select All, None, or User Group o All - All users are authorized to update in the module in the selected period o None - No users are authorized to update in this module in the selected period For example, if a company wants to make some adjustments to a closed period, the modules that will not be adjusted are set to None o User group - Specific user groups are authorized to make updates in the selected period In the Module user group area, specify the user group that can make changes, when the module status is set to User group For example, after a period is stopped, limit access to the Ledger to only the user group that makes closing entries This ensures that no new entries are made during the financial closing process You can select one group of users to enter the last postings in the old period and select other groups to continue working only in the new period FIGURE 11.2 CALENDAR FORM, MODULE LEVEL ACCESS Microsoft Official Training Materials for Microsoft Dynamics® Your use of this content is subject to your current services agreement 11-5 Financials II in Microsoft Dynamics® AX 2012 Create and Post a Closing Sheet The company may print a trial balance sheet to look for inconsistencies and make any adjustments necessary before closing the period To make adjustments in Microsoft Dynamics AX, you can either of the following: • Make typical journal entries, depending on adjustment • Use the Closing Sheet Consider the following when you use the Closing Sheet: • It shows an advanced view of the balances on accounts, and you can perform year-end postings directly from it • The postings to it typically occur in the closing period of the fiscal year • It is possible to create several specific closing sheets (for revenue, expenses, balance accounts, and so on) and then load the balances from the General Ledger into the closing sheet After you load the transactions, make transfers from one account to another • It resembles a journal because you can create as many new closing sheets as needed and you can post several lines of entries Procedure: Create a Closing Sheet Follow these steps to create a closing sheet Click General ledger, click Periodic, click Fiscal year close, and then click Closing sheet Click the New button to create a new record In the Closing sheet field, give a unique identifier and Name Select the Posting layer that the closing sheet is used for The following options are available: o Current - ordinary transactions/adjustments Most frequently, the Current posting layer is used o Operations - extraordinary transactions/adjustments o Tax - used to make adjustments necessary for the tax posting layer reporting This field is for information purposes only 11-6 Microsoft Official Training Materials for Microsoft Dynamics® Your use of this content is subject to your current services agreement Chapter 11: Year-End Close Select a Period code from the following options: o Opening - The period can be used to record opening balances from the previous period o Operating - The period can be used to record accounting transactions o Closing - The period can be used to record general ledger transactions when closing a fiscal year It is not possible to make transactions to the Opening period in a closing sheet; use the Opening option only for a beginning balance transaction This is discussed later in this course You can make adjustments, however, to the regular period(s) and to the closing period(s) Usually this field is set to Closing FIGURE 11.3 CLOSE SHEET FORM Procedure: Create a Closing Sheet - Load Balances Follow these steps to load the account balances into the closing sheet From the Closing sheet form, click the Closing accounts button Click the Load balances button to identify the accounts to include When balances load from a company, Microsoft Dynamics AX totals all the transactions in each account Select the Delete existing accounts check box if balances already are transferred into this worksheet and to delete those and reload balances If the closing sheet is a new sheet, not select this option Microsoft Official Training Materials for Microsoft Dynamics® Your use of this content is subject to your current services agreement 11-7 Financials II in Microsoft Dynamics® AX 2012 Click the Select button to select Main accounts, such as all Payables or all Receivables, and to open the standard query window to specify the search criteria Click OK when you select the Main accounts to transfer into the worksheet A form displays the progress of the transfer It can take several minutes to load the balances, depending on the number of transactions in the database After the transfer is complete, the system returns to the Closing accounts form where the accounts and balances associated with them display NOTE: The determination of which columns to populate is made based on the Close option selected when you set up each account in the Chart of Accounts FIGURE 11.4 CLOSING ACCOUNTS FORM Procedure: Create a Closing Sheet - Define Dates Follow these steps to enter date ranges for the closing sheet From the Closing sheet form, click the General tab Enter the start date of the fiscal year closing in the From field and the end date of the fiscal year in the To field Enter the transaction Post date Procedure: Create a Closing Sheet - Make Adjustments or Transfers Follow these steps to make adjustments or transfers between accounts From the Closing accounts form, select a main account, and then click the Transfers button to make adjustments or transfers between ledger accounts after the balances are transferred into the worksheet Enter a Description 11-8 Microsoft Official Training Materials for Microsoft Dynamics® Your use of this content is subject to your current services agreement Chapter 11: Year-End Close Enter a Main amount, and the Offset account to transfer the amount to After you add all the transfers for the selected main account, close the form Post the Closing Sheet After the necessary transfers or adjustments are complete, click the Post button from the Closing accounts - closing sheet form to post the closing sheet The closing sheet only posts to the closing period At this time, also run reports and verify results before you close the period and transferring ending balances into the new year as opening balances HINT: To post the closing sheet, you must open the closing period in the Periods form After you post the closing sheet, ensure that you change the period back to On hold Transfer Opening Balances After you verify ending balances, you can transfer ending balances into the new year as opening balances Procedure: Define Fiscal Year Close Parameters Before transferring any balances in the new fiscal year, verify the fiscal year close settings in the General ledger parameters form Follow these steps to verify fiscal year close parameters Click General ledger, click Setup, and then click General ledger parameters Click Ledger on the navigation pane and then click on the Fiscal year close fast tab Select the Delete close-of-year transactions during transfer check box to delete open transactions and system-generated closing transactions when a transfer is repeated This can process the transfer multiple times if it is necessary but only creates one opening entry If it is clear, the previous transfers are not deleted Instead, the system transfers the net adjustments compared to the last time that a transfer is performed This allows for the tracking of historical transfers, but many transactions are created Select the Create closing transactions during transfer check box to create closing transactions for all the ledger accounts, including the profit and loss accounts, when running the opening transactions job This does not mean that it transfers profit and loss balances but only that it creates closing transactions Select the Set period status to year closed check box to require all fiscal periods for the year to be closed Microsoft Official Training Materials for Microsoft Dynamics® Your use of this content is subject to your current services agreement 11-9 Financials II in Microsoft Dynamics® AX 2012 CAUTION: If a period is closed, adjustments, which may be required by the auditor, are not possible Select the Voucher number must be filled in check box to enter a voucher number when opening transactions are created for a new fiscal year Transfer Opening Balances In the opening transactions process, Microsoft Dynamics AX creates: • A line for the opening transaction This line makes up the opening balance for the new year • A transaction for each currency and financial dimension It is necessary to maintain this to keep statistics and financial reporting available to the user You can transfer balances as frequently as needed during the year-end close process Procedure: Transfer Opening Balances After you verify the parameter settings, follow these steps to transfer opening balances Click General ledger, click Periodic, click Fiscal year close, and then click Opening transactions NOTE: The General Ledger parameters section is view only You can change these settings only by using the General ledger parameters form Enter the End date of the fiscal year The oldest fiscal year in which the periods have been closed might be displayed If you select an ending date for which multiple closing periods are defined in the Fiscal calendars form for the fiscal calendar that is being used, a Closing period for closing transactions field is displayed, and you must specify which closing period to post to This Closing period field is displayed only if the Create closing transactions during transfer check box is selected in the General ledger parameters form Profit and loss accounts are always reset by the system However, you must specify the transfer method for the balance sheet accounts In the Balance accounts field, designate how opening balances for balance sheet accounts transfer by selecting one of the following two options: o Reset - resets the balance accounts and enters the opening balances for the balance sheet accounts manually o Closing > Opening - continues with the balance sheet accounts, and has the opening transactions created automatically by the system 11-10 Microsoft Official Training Materials for Microsoft Dynamics® Your use of this content is subject to your current services agreement Chapter 11: Year-End Close Enter the Main account for transfer of year-end result This field is automatically updated with information from the Accounts for automatic transactions form, but can be edited Enter the Voucher Number for the opening transactions that are created automatically This is mandatory if the Voucher number must be filled in check box is selected in the General ledger parameters form Select the Print created transactions check box to print a list of the created opening transactions Click OK when all the fields are entered This process may take several minutes, depending on the amount of data When the process is complete, check the account balances or print a financial statement FIGURE 11.5 OPENING TRANSACTIONS FORM Microsoft Official Training Materials for Microsoft Dynamics® Your use of this content is subject to your current services agreement 11-11 Financials II in Microsoft Dynamics® AX 2012 Procedure: Transfer Opening Balances - Dimensions Follow these steps to specify multiple equity account dimensions during the transfer of opening balances for each account to a new fiscal year From the Opening transactions form, select the Dimensions tab Select the Transfer financial dimensions check box to include financial dimensions on the opening transactions generated for the balance sheet accounts If the option is not selected, the financial dimensions associated with the balance sheet transactions will not move forward In the Profit and loss transactions area, select a dimension code from the drop-down list to close all profit and loss transactions to a specific dimension code for any financial dimensions that are not Closing dimensions For example, Purpose is selected as a closing dimension Purpose has four dimension codes of 100, 200, 300 and 400 Select dimension code 100 to close all profit and loss transactions to this specific dimension code for the Purpose dimension Select the Close all check box if the profit and loss transactions must be closed to the dimension codes for this dimension based on the dimension code entered on each profit and loss transaction For example, Department is selected as a closing dimension Department has four dimension codes of 01, 02, 03 and 04 Profit and loss transactions entered for Department 01 will be closed to Department 01, Profit and loss transactions entered for Department 02 will be closed to Department 02 and so on If the close all check box is selected, and a specific dimension code is also selected, the selected dimension code will be ignored during the opening transaction process NOTE: The close all check box and the dimension code drop-down list selection are optional and can be modified at any time 11-12 Microsoft Official Training Materials for Microsoft Dynamics® Your use of this content is subject to your current services agreement Chapter 11: Year-End Close Lab 11.1 - Year-End Close Scenario It is the end of the fiscal year 2007 Phyllis, the Accounting Manager at Contoso, must create a closing sheet and make the following adjustments: • 2,500 U.S dollars (USD) from account number 110130 to account number 110110 • 800 USD from account number 403150 to account number 110110 • 1,250 USD from account number 140750 to account number 110110 • 500 USD from account number 220270 to account number 110110 When the adjustments are finished, she must post the closing sheet and create the opening balances for the next fiscal year Challenge Yourself! Help Phyllis create a closing sheet, make adjustments, post the closing sheet, and create the opening balances for the next fiscal year Need a Little Help? • Open the 6/30/2008 fiscal period • Create and post a closing sheet for 2007 • Transfer opening balances Step by Step Follow these steps to create and post a closing sheet for 2007 Click General ledger, click Periodic, click Fiscal year close, and then click Closing sheet In the Closing sheet field, enter 2007 In the Name field, enter 2007 Closing Sheet In the Posting layer field, click the arrow, and then click Current In the Type field, click the arrow, and then click Closing Click the General tab In the From field, type 07012007 In the To field, type 06302008 In the Post field, type 06302008 10 Click the Closing accounts button 11 Click the Load balances button 12 Select the Delete existing accounts check box 13 Click OK Microsoft Official Training Materials for Microsoft Dynamics® Your use of this content is subject to your current services agreement 11-13 Financials II in Microsoft Dynamics® AX 2012 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 42 43 Click Account number 110130 Click the Transfers button In the Description field, type 2007 close In the Amount field, type 2500 In the Offset account field, click the arrow, and then click Account number 110110 Close the form Click Account number 403150 Click the Transfers button In the Description field, type 2007 close In the Amount field, type 800 In the Offset account field, click the arrow, and then click Account number 110110 Close the form Click Account number 140750 Click the Transfers button In the Descriptionfield, type 2007 close In the Amount field, type 1250 In the Offset account field, click the arrow, and then click Account number 110110 Close the form Click Account number 220270 Click the Transfers button In the Description field, type 2007 close In the Amount field, type 500 In the Offset account field, click the arrow, and then click Account number 110110 Close the form Click the Post button Click Close to close the Infolog Close the form Click the Print button and select the Transactions check box to view the transactions Click the OK button Close all the forms Follow these steps to transfer opening balances Click General ledger, click Periodic, click Fiscal year close, and then click Opening transactions In the End date field, type 06302008 In the Voucher number field, type 123Open Close the form 11-14 Microsoft Official Training Materials for Microsoft Dynamics® Your use of this content is subject to your current services agreement Chapter 11: Year-End Close Summary The fiscal year in Microsoft Dynamics AX can be: • Set to any length • Divided into any number of accounting periods You can set up fiscal year and accounting periods according to: • Years • Months • Days Each accounting period can be closed completely for more transactions Selected users can be able to continue an update of one or several modules After the reconciliation of accounts and valuation of inventory, you might have to enter year-end transactions You can this in a simple closing sheet Use a closing sheet to post and report year-end transactions separately from everyday business transactions Use the opening transactions option to: • Reset the profit/loss accounts • Transfer balances on the balance sheet accounts into the new fiscal year If opening balances already are created and additional updates of the previous fiscal year are necessary, repeat the opening transactions job as many times as needed You can run the year-end job as many times as needed In Microsoft Dynamics AX, the opening balances update correctly If the Chart of Accounts for the new year differs from the previous year, you can create the opening transactions directly on the new accounts This is made possible through the option to set up a different opening account for each account on the Chart of Accounts Microsoft Official Training Materials for Microsoft Dynamics® Your use of this content is subject to your current services agreement 11-15 Financials II in Microsoft Dynamics® AX 2012 Test Your Knowledge Test your knowledge with the following questions What is the difference between an on hold period and a closed period? Is it possible to restrict user access to the application during the closing process, and if so, how? What is the closing sheet used for? (Select all that apply) ( ) To show an advanced view of the balances on accounts ( ) To transfer opening balances to the new fiscal year ( ) To create a new fiscal year ( ) To make adjustments to the balance sheet before closing 11-16 Microsoft Official Training Materials for Microsoft Dynamics® Your use of this content is subject to your current services agreement Chapter 11: Year-End Close Which posting layer should you use on the closing sheet for posting year-end transactions? ( ) Closing ( ) Current ( ) Operations ( ) Opening List the steps that are involved in transferring opening balances in order Step: _: Enter the Main account for transfer of year-end result _: Enter the End date of the fiscal year _: Select Closing > Opening _: Click OK _: Click General ledger, click Periodic, click Fiscal year close, and then click Opening transactions _: Enter the Voucher Number Microsoft Official Training Materials for Microsoft Dynamics® Your use of this content is subject to your current services agreement 11-17 Financials II in Microsoft Dynamics® AX 2012 Quick Interaction: Lessons Learned Take a moment and write down three key points you have learned from this chapter 11-18 Microsoft Official Training Materials for Microsoft Dynamics® Your use of this content is subject to your current services agreement Chapter 11: Year-End Close Solutions Test Your Knowledge What is the difference between an on hold period and a closed period? MODEL ANSWER: With a on hold period, no additional postings can occur, and the period can be reopened With a closed period, no additional postings can occur, and the period cannot be reopened Is it possible to restrict user access to the application during the closing process, and if so, how? MODEL ANSWER: Yes, click the Module level access fast tab in the Ledger calendar form and select None to deny everyone access to each selected module, or select User Group to give access to a specific user group What is the closing sheet used for? (Select all that apply) (√) To show an advanced view of the balances on accounts ( ) To transfer opening balances to the new fiscal year ( ) To create a new fiscal year (√) To make adjustments to the balance sheet before closing Microsoft Official Training Materials for Microsoft Dynamics® Your use of this content is subject to your current services agreement 11-19 Financials II in Microsoft Dynamics® AX 2012 Which posting layer should you use on the closing sheet for posting year-end transactions? ( ) Closing (•) Current ( ) Operations ( ) Opening List the steps that are involved in transferring opening balances in order Step: : Enter the Main account for transfer of year-end result : Enter the End date of the fiscal year : Select Closing > Opening : Click OK : Click General ledger, click Periodic, click Fiscal year close, and then click Opening transactions 11-20 : Enter the Voucher Number Microsoft Official Training Materials for Microsoft Dynamics® Your use of this content is subject to your current services agreement ... from account number 110 130 to account number 110 110 • 800 USD from account number 403150 to account number 110 110 • 1,250 USD from account number 140750 to account number 110 110 • 500 USD from... at any time 11- 12 Microsoft Official Training Materials for Microsoft Dynamics® Your use of this content is subject to your current services agreement Chapter 11: Year-End Close Lab 11. 1 - Year-End... statement FIGURE 11. 5 OPENING TRANSACTIONS FORM Microsoft Official Training Materials for Microsoft Dynamics® Your use of this content is subject to your current services agreement 11- 11 Financials