Year-End Close Tips and Tricks

Posted on: September 4, 2024 | By: Guy Logan | QAD Financials, QAD Manufacturing, QAD Business Process, QAD Distribution

Performing a fiscal year end close can present its challenges. This includes facing time constraints, validating that all transactions are recorded properly, coordinating across departments to obtain all required information, preparing for audits, and complying with any regulatory or tax requirements. 

However, closing the fiscal year in your ERP system does not need to be complicated. QAD makes closing the year straightforward and provides the necessary tools and reports for ensuring you don’t miss a beat. Some tips and tricks to consider the next time you perform a year-end close are outlined below.  

 

Reporting the GL calendar year

All GL periods for the closing year must have a status of Reported. The Reported status represents periods which have had a month-end close and have been successfully reported though financial statements. You can reset a reported GL period to an Open status to continue making changes and adjustments in a prior period.  

Mark the period as reported in the Entity GL Periods screen: 

The visualization below depicts how GL periods can flow between statuses. Once a period has been frozen during the year-end close, it cannot be reopened. 

Utilizing a Correction Period

There are three types of GL periods: 

• Normal
• Correction
• Year-End Closing

The purpose of a period type is to differentiate special activity from the standard period activity. For example, a Correction GL Period may be used to post audit adjustments to a reported GL year. The correction period is normally the last period in the GL calendar year. Companies may choose to utilize Correction periods to have the flexibility of printing financial statements with or without year-end adjustments and to keep year-end adjustments separated from standard operational reporting. 

Confirming All System Setups have been Completed

Before conducting the year-end close, first validate that all the below setups have been configured in your QAD environment.

1. P&L Closing Account (GL Type = Closing Account)
2. Balance Sheet Closing Account (GL Type = Closing Account)
3. Daybook of type Year-End Closing
   To restrict which users are allowed to perform a Year-End Close, assign an appropriate access role to the Year-End Closing Daybook. This ensures that only users who are assigned to that role are allowed to post against the daybook.
4. Review the Daemon Monitor and verify that the History daemon has no records to process
5. Run a Trial Balance for the closing year and confirm that the Trial Balance adds to zero.
6. Make sure that the Auto Balance system GL account has no outstanding balance for the closing year in the official and management layers.
7. The next GL year has been created.

Execute the Year-End Close

Once all setups have been completed and no further GL adjustments are needed in the closing year, close the year in the Year-End Closing screen. Define all the required fields and click Save:

Several system checks are performed. If any of the checks fail when closing the layer, the system displays an error message and stops the year-end closing process. And if all the checks are passed with a warning, the system displays a warning message but allows the year to be closed. When all checks pass, the system displays a message indicating you can register the year-end closing.

Once a year-end close has been registered on the official layer, the statuses of all the GL periods of the closed year change to Frozen. A Frozen period cannot be reopened.

 

Next Step

For more QAD implementation Tips and Tricks contact our experts here.

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