The year end process is an easy way to close your accounts for a financial year so that you can prepare your profit and loss
Also known as an income statement. account and balance sheet Also known as a statement of financial position..
Before You Start
The year end process will not run if any of the following is true:
- There are "In Progress" or "Ready to Post" documents for the selected year. You must post or discard these documents before running the year end process.
- The year end process has been run before for the same year or a future year and the Year End Status has changed to "Closed". You must run year end processes in chronological order.
- There is another year end process running for the same company and the year's Year End Status is "Closing".
- The selected year has no special periods defined.
- Period 101 and 000 have documents posted to it. This means both these periods must be empty.
- The following year or period 000 of the following year do not exist.
When running a Year End, you must have your correct brought forward balances in period 000 of the year for which you want to run the process. A warning is displayed if period 000 for the current year exists but is empty. This means that you have no opening balances for this year.
Before you start a year end process you must specify the following items on the current company and year. If these items are defined at company level, they are used as a default at year level but you can amend them at any time before the process starts.
- The general ledger account The general ledger will normally include general ledger accounts (GLAs) for items such as income, expenses, assets, liabilities, and reserves. to use as a suspense account.
- The general ledger account to use as a retained earnings account.
- The Year End Mode GLA Only or Full Accounting Code. This mode controls the detail and size of your year end journal lines. for the year end process.
If your multi-company org has more than one home currency The main working currency of the current company., you must create a separate retained earnings and suspense account GLA for each home currency. So, for example, if you have two USD companies and one GBP company in your org, you must create the following GLAs:
- Retained Earnings USD
- Suspense USD
- Retained Earnings GBP
- Suspense GBP
The two USD companies can share the same USD GLAs.
Before running a year end process, you must:
- Post all transactions
- Make corrections and adjustments
- Reconcile bank accounts
- Check key reports, such as:
- Debtors aged analysis
- Creditors aged analysis
- Trial balance
- Profit and loss Also known as an income statement.
- Balance sheet Also known as a statement of financial position.
Local GLAs
The year end process allows for the use of local GLAs. You must map all local GLAs to the equivalent corporate GLAs. However, for the two following fields you must still select a corporate GLA:
- Retained Earnings GLA
- Suspense GLA
Those two corporate GLAs must map to the equivalent local GLAs, and be of the same type. For example, if the corporate GLA entered in the Suspense GLA field is a balance sheet account, the mapped local GLA must also be a balance sheet account. If not, the year end process might include the document in the wrong journal type.
For the year end process to include documents related to a local GLA, for example the account on a payable invoice, you must map it to the equivalent corporate GLA. If not, the year end process might include the document in the wrong account type.
You must complete the required mapping in the Chart of Accounts Mappings tab. For more information, see Mapping Corporate and Local GLAs.
Flexible Decimal Places
If you have enabled the Flexible Decimal Places feature, the year end closing journals are rounded to two decimal places, regardless of the number of currency decimal places. Opening journals for the following year are rounded to the decimal places of the home or dual currency.
For more information, see Enabling the Flexible Decimal Places Feature.
Custom Settings
The following custom settings include fields that relate to the year end process:
- Accounting Settings
- Document Line Volume Settings
See Managing Custom Settings for more information.
Validation Rules
Before running your year end process, work with your administrator to review your validation rules on Certinia objects, in particular rules that affect transactions and transaction line items. Validation rules that interfere with the posting of year end journals and documents might need to be temporarily disabled.
Running a Year End
For more information, see Running the Year End Process.
What Happens during the Year End Process?
- Batch jobs are initiated to create and post a series of year end journals. The balance sheet Also known as a statement of financial position. process starts immediately after the profit and loss Also known as an income statement. process has completed successfully.
- If you are using Multi-Book Accounting, the year end process takes into account your accounting books and:
- Runs a year end process for each book.
- Calculates year end journals by identifying the balances book by book.
- Associates the resulting year end journals with the correct accounting book.
This is done automatically so you do not need to run a year end process per company and accounting book. Multi-Book Accounting is compatible with both year end modes: General Ledger Account and Full Accounting Code. The year end process for multiple years and companies supports Multi-Book Accounting. - The profit and loss process reads all transaction line items associated with GLAs of type Profit and Loss for the selected year's trading periods and sorts them either by general ledger account or by full accounting code. This depends on the year end mode in force. You can select the year end mode at company and year level.
- The balance sheet process reads all transaction line items associated with GLAs of type Balance Sheet or Retained Earnings for the selected year's brought forward values in period 000 and its trading periods and sorts them either by general ledger account or by full accounting code as before.
- A new journal line item is created at each change of general ledger account or full accounting code. The values on each transaction line item are summarized on each journal line item and its sign is reversed. When the maximum number of journal lines is reached, a new journal header is created.
- In the closing period (period 101), the balances in the profit and loss GLAs are transferred to the retained earnings GLA assigned to the year.
- Once the profit and loss balances are transferred to retained earnings, all balances in the remaining GLAs (including the retained earnings GLA) are carried forward to the following year. This is done by clearing out all the balances in Period 101 and restoring them in period 000 of the following year.
- When a year end journal reaches its maximum number of lines, the suspense GLA is used by the year end process to split that journal into several journals. The suspense GLA line includes the balancing figure for each of the journals. Once all the year end journals are processed, the balance in the suspense GLA is cleared to 0.00.
- When the transactions related to the year end journals are created, the exchange rates do not apply to calculate home, dual, GLA, and dimension values.
- The home, dual, and reporting values in the year end journals are calculated by adding their respective values in the relevant transaction line items.
Notifications
When the process completes you will receive a notification by email. If Chatter is enabled, you will receive a notification on your Chatter feed too.
We recommend enabling the Year End Log so that you can resolve any errors encountered during the year end process more easily. Any errors will be shown in Year End Logs. If there is no related list on the Year object, contact your administrator. For more information, see Custom Object Descriptions.
Additional error information can also be found on the Apex jobs page, with the Apex class CODAYearEndBatch.
Year End Journals
All resulting journals have a type of "Year End Journal", a status of "Complete", and are created in home currency. If the Enable Year End by Document Currency custom setting checkbox in the Accounting Settings is not selected, all the year end journals are created in home currency. You cannot amend, cancel, or delete year end journals.
- Journals created by the profit and loss process have a reference starting "PL".
- Journals created by the balance sheet process have a reference starting "BS".
Year End Adjustments
You can post adjustments automatically using the year end adjustment process. For more information, see Running Year End Adjustments
Year end adjustments must be reflected in both periods 100 and 000 so that your opening balances are correct.
Here is an example:
| 100 | 000 |
|---|---|---|
| Sales | –400 | |
| Deferred Income | 400 |
| Retained Earnings | –400 | |
| Deferred Income | 400 |
Once you have run the year end process, the year is closed. You cannot reopen and adjust the special periods 000 and 101. However, you can still reopen and adjust the following periods of the last closed year:
- Trading periods
- Adjustment period
For more information on closing and reopening a period, and on how different closing options control the saving and posting of documents, see Editing and Deleting Years and Periods.