About the Year End Process

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..

Warning:  

• You must be assigned the Accounting and Billing - Year End and the Accounting and Billing - Year permission sets to run the year end process.
• If one or more companies do not have the Year End Mode specified, the year end process will run in Full Accounting Code mode for those companies.
• You must make sure that the opening balances in period 000 are the correct brought forward balance sheet values. Once the year end process starts, the periods in the selected year are closed and locked. You can only run the year end process once. When the year end process is running for a current company, you cannot deselect that company until the process is complete.
• Check the adjustment status of any previously closed years to ensure that the company is not in Error status. If it is, log a case with Certinia Customer Support to rectify this prior to running any further year end processes for the specific company. Note if the Adjustment Status field is not displayed on your Year page layouts, you must manually add it.

• Before running your year end process, work with your administrator to review your validation rules on Certinia objects, in particular rules that affect transaction, transaction line items, journals and journal line items. Validation rules that interfere with the posting of year end journals and documents might need to be temporarily disabled.

• Once you have run the year end process, the year is closed. However, you can still reopen and adjust the following periods of the last closed year:
  • Trading periods
  • Adjustment period
    
  You cannot reopen and adjust the special periods 000 and 101. 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.

• If you open and post adjustments in a period within a closed year, you must run Process Adjustments. This ensures that all of the related transactions are accurately reflected in the company reports for that year. For more information, see Running Year End Adjustments.

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 of the current year or period 000 of the following year have documents posted to it. This means both these periods must be empty.

Note:

If you have installed Summer 2023 SP8, this validation has been updated and it is possible to run the year end process if period 101 of the current year or period 000 of the following year contain year end transactions only. This allows you to re-run the process if it fails to run correctly.

• 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.

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

See the Warnings above.

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:
1. Runs a year end process for each book.
2. Calculates year end journals by identifying the balances book by book.
3. 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 1-4 values.
• The home, dual, reporting, GLA, and dimension 1-4 values in the year end journals are calculated by adding their respective values in the relevant transaction line items.
• The value in the General Ledger Account Value field and the Dimension 1-4 Value fields in each year end journal transaction line items are calculated except for the retained earnings GLA transaction line item. A value of 0.00 is assigned to the General Ledger Account Value field and the Dimension 1-4 Value fields of the retained earnings GLA transaction line item.

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 the 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".

If you select the Enable Year End by Document Currency custom setting checkbox in the Accounting Settings, the year end process runs as follows:

1. Takes into account the different document currencies of the relevant transaction line items retrieved.
2. Creates one year end journal per document currency. This applies while generating each of the following journals:
   • Profit and Loss Year End Journal
   • Closing Balance Year End Journal
   • Opening Balance Year End Journal
3. Adds up the values in the fields of the transaction line items retrieved per document currency to calculate the values to be assigned to the lines in the year end journal.

Year End Adjustments

You can post adjustments automatically using the year end adjustment process. For more information, see Running Year End Adjustments

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.