Dynamics GP Year End Procedures and Processes

Dynamics GP Year End Procedures and Processes

It seems that every year I have the same conversation with several clients over the procedure for year end closing of Dynamics GP. We usually discuss two sides of the system requirements as well as year end timing.

System Process

The system side is pretty straight forward and there is great tech knowledge by Microsoft on the steps and issues that may be encountered. This document is Year-end closing procedures for GL – Dynamics GP | Microsoft Docs.

This document lays out the basic 14 steps required, and then details what each step is. I will not expand on this, but will note that the following items that cause the most issues on the system side are:

• Disk space. Closing the fiscal year needs disk space. In fact, it duplicates every transaction for the current fiscal year (copies from GL20000 to GL30000 and does AA tables as well). Since this duplication occurs prior to the deletion of the current year’s transactions, you need to have space for this to occur.
• Verification of the posting type. This is a simple step (#3) but is often overlooked. Each GL account is listed as either a balance sheet or a profit\loss. Balance sheet accounts roll their closing numbers to the next year and profit\loss accounts are rolled up to retained earnings (Accounting 101). If the account is listed incorrectly, the close will complete but will have failed on an accounting level. This is not easy to correct, so please ensure all accounts are the right type. (Happens at least once per year.)
• When you run this procedure, the steps are counted on the bar (7 in total). It runs the first few quickly, then appears to hang. This is normal as there is one slow step that copies the data from open to history and then removes the transaction after the copy. Please be patient, restarting at this point requires a restoration from back so you need to wait for it to complete (this can take a long time if you have a large number of transactions for the year).

Year End Timing

Now for the timing on when to do the processes. There is no set answer to this question and it will depend on your closing for accounting procedures.

There are subledgers that require closing (Accounts Receivable, Accounts Payable and Inventory) and there is the General Ledger. These are usually closed on different days based on the flow of transactions for the firm.

Accounts Receivable

This close updates some statistical accounts, and copies the year to date since last close to last year, and then zeros out the current year to date. It does this based on the data posted at the time of running the procedure so should be done when AR is completed for year end. This is completed when:

• All invoices for the year are posted.
• All cash receipts are posted for the year.

In most cases this is either the first or second business day of the new year. The numbers will be correct if no transactions are posted for the new year. Don’t worry if this type of cut-off is not possible, there is a feature in Dynamics GP that allows date sensitive this year versus last year comparisons.

Accounts Payable

This close updates some statistical accounts and copies the year to date since last close to last year, and then zeros out the current year to date. It does this based on the data posted at the time of running the procedure, so should be done when AP is completed for year end. This is completed when:

• All vouchers for the year are posted.
• All receipts for the year are posted.
• All invoices for the year are matched.
• All cheques are posted for the year.

This is always a moving target as all the invoices from vendors are not available right at year end and are received in the first week of next year. I would close AP as soon as most are done, but know that the amounts since last close are not perfect. Again, don’t worry as there is a feature in Dynamics GP that allows date sensitive this year vs last year comparisons.

Inventory

This close updates some sales information and can remove discontinued items, this is done after the following is completed:

• All receipts for the year are posted.
• All invoices for the year are posted.
• Stock counts for year end are updated and completed.

The sales information update is seen on the item quantity and sites screen, it resets the sold number to 0 when the close is run. If this is used for sales reports, then the timing is important. If it is not possible to stop shipments prior to close, we can rebuild that number if required.

General Ledger

This is usually done later in the first month of the new fiscal year. The account books are kept open until ready to be presented to the accountants or auditors, to allow for adjusting entries to be done for year end. Once approved and ready, the GL should be closed. It is always possible to do prior year adjustments by allowing posting to history. This rolls forward the balance sheet items and resets the income statement accounts. Until this is done, the balance sheet for the next year will not include the opening balances. Most firms close by the end of the first month so they can create the period 1 financial statements correctly.

As always, please feel free to contact us at Encore for assistance on these procedures or for more information.

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