Huber Cooney posted on November 15, 2011 15:37
As year-end approaches, questions arise about what procedures are required in Dynamics GP to insure accurate financial reporting and consistent transaction processing. The Dynamics support team does a good job telling us what the procedures do and how to do them, but they leave out an important detail: What happens if I don’t do them at the right time, in the right order? (Or, for that matter, what happens if I never do them?) Following is an analysis of those questions for modules with a year-end procedure.
General Ledger
This should be done shortly after the end of the fiscal year. Although the Dynamics GP user manual says this must be done after closing the sub-ledgers, it can actually be done any time after the first of the new fiscal year because what it does is entirely independent of the sub-ledgers. That said, you should wait until later in the first month of the new fiscal year when most of the adjusting journal entries for the prior fiscal year are done because otherwise those entries will create two journal entries for each entry posted into the prior fiscal year: one for the adjustment (i.e., dated 12/31/11) and one to update the balance sheet accounts in the new fiscal year (i.e., dated 1/1/12). Again, you can still post into the last fiscal year even after closing the fiscal year in the GL module, but you might as well wait until most of that posting has been done as a best practice. Until you run the fiscal year-end process, any financial statement or trial balance run from Dynamics, FRx, or Management Reporter that includes balance sheet account balances in the new year will not show beginning balances, only net changes. In sum, so as long as you run GL year-end procedures before you need to run a balance sheet or trial balance that includes new fiscal year activity, there’s no “wrong” time to run it.
Payroll
This year-end procedure should be run after all pay runs for the preceding calendar year are posted and adjusted, if necessary, and before you create W-2’s and other year-end procedures for the IRS, etc. Note that you can run payrolls for the new year before doing this process. It will not include that data in the year-end wage file. But you cannot run W-2’s until you create the year-end wage file. If you run the year-end wage file and then determine you need to do an adjusting entry to a prior-year payroll, you can always delete the year-end wage file (Payroll-Utilities-Remove Year-end Information) and then re-create the year-end wage file after the adjustment. Or you can adjust amounts through the Edit W-2 utility (Payroll-Routines-Edit W-2s).
Payables Management
Neither the fiscal year close nor the calendar year close procedures for Payables Management do much. They just update the amounts that appear in the Vendor Yearly Summary Inquiry. The calendar year close moves the 1099 balance in that window to the Last Year column but 1099’s will still print correctly no matter what this window says. This should be done before posting any transactions into the new fiscal/calendar year, but not doing so will only make the Vendor Yearly Summary Inquiry window inaccurate. All other inquiries, trial balances, 1099s, etc. will still work just fine. Although we don’t recommend it, some of our Dynamics GP clients don’t even bother to run this. If you do run it, it can be run before or after you close GL (see General Ledger section above) without issues, despite what the manuals say.
Receivables Management
Like the Payables Management year-end procedure, the RM year-end procedure does very little. The procedure just updates the amounts in the Customer Summary Inquiry and Customer Yearly Summary Inquiry windows, moving This Year to Last Year. The penalty for not doing it at all, or doing it after you post transactions into the new fiscal/calendar year, is an inaccurate amount in those inquiry windows. As with the PM year-end, some people skip it, although we don’t recommend that. And it can be run independently of when you run GL close.
Inventory Control
A lot of the things included on the Inventory Control year-end procedure window, like removing old cost layer history or discontinued inventory items, can be done any time, or don’t need to be done at all. Much like changing your smoke alarm batteries when daylight savings time begins or ends, it’s a convenient reminder. Actually running the year-end procedure, on the other hand, will reset several values in summary tables that may be useful to inventory activity reporting. For example, the Beginning Quantity on the Inventory Turnover report is set to the on-hand quantity at the time you run the year-end procedure and the Quantity Sold value for each item is set to zero. If reports using those values are valuable to you, then you should run the Inventory Control year-end procedure as soon after year-end as possible and before posting any transactions in Purchase Order Processing, Sales Order Processing, Manufacturing and the Inventory Control module itself that would affect inventory numbers. Otherwise, the Quantity Sold and Beginning Quantity values will be inaccurate, which would affect the reports on which those items appear. However, many of our clients don’t bother and most reports/queries are not affected.
Fixed Assets
It is critical for accurate depreciation calculations and information to run the Fixed Assets year-end procedures prior to running depreciation in the new year. The procedure updates Current Year values for depreciation, asset value, etc. to Last Year and updates Beginning of Year values to the current depreciated value. Failure to run this after all depreciation for the prior year is completed and before depreciation for the current year is run would require extensive work to repair.