performing year end closing in sap business one

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PERFORMING YEAR END CLOSING

IN SAP BUSINESS ONE

11.18.2020

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A. GENERAL PROCESS OVERVIEW1. System Checks

• Checking Open Items for document completion

• Banking – Payment Wizard check for completion of recommendations

• Review Clearing Accounts balances

2. Preparing for Year-End Closing• Change period status to closing period

• Reconciliation of Aging reports (AR & AP)

• Reconciliation of Inventory accounts (Audit Report) - Perpetual Inventory System

• Deeper Dive into Inventory Reconciliation

• Run Financial reports for Year-End review (BS, P&L, Trial Balance)

3. Performing Year-End Closing• Create New Periods for the new fiscal year

• Run Period End Utility – Confirm Retained Earnings

• Illustrate how to run period end utility in SAP

• Change the Period Status to Locked

B. Q&A – How can we help?

AGENDA – YEAR END CHECKS & BALANCES










System ChecksPrepping

(Balance/Reconcile)Perform Year-End

Close

PROCESS PHASES: THE THREE PHASES OF YEAR-END CLOSING

Tasks

• Confirm Month-End close completed.

• Check/Verify account balances & validate open documents for FYE.

Objective: Identify areas that require preparation and action prior to Year-End Close

Tasks (Sample List)• Update period to Closing Period

• Run Financial Reports

• Reconcile & Confirm

• Business Partners Accts

• Prepaids & Accruals

• Inventory

• Banking

• Depreciation

• Journal Entries, Recurring & Reversing Entries

• Tasks

• Create New Periods

• Roll FA year (if applicable)

• Run Period-End Utility

• Validate Financial Report – Retained Earnings

• Lock Periods










SYSTEM CHECKS (EXAMPLES)

1. Checking Open ItemsA. Run Open Item Report by Document TypeB. Validate open documents as accurate

2. Banking – Payment WizardA. Open payment wizard to check for open Recommendations

3. Reviewing Clearing Accounts for any open balancesA. Examples of clearing accounts

i. Incoming payment clearingii. Goods Received not Invoiced

B. Use drill down feature to open / review open documents

NOTE: This presentation presents general concepts that you can apply to your specific situation, it is not all inclusive. Any procedure described in this presentation does not guarantee the accuracy of the content or the completeness of a year-end closing. It is recommended you discuss and determine your year-end process in detail with your accounting and tax

professionals.










PREPPING, CHECKS & BALANCES

1. Verify the posting period statusA. Open Posting Periods

Navigate to Administration > System Initialization > Posting Periods

B. Verify/Update posting period status = “Closing Period” for each period.

2. Reconciliation of Aging ReportsA. Run Aging reports - both available under Business Partner Reports\Aging

i. Customer Receivable Agingii. Vendor Liabilities Aging

B. Verify totals match balance sheet


professionals.










PREPPING, CHECKS & BALANCES (CONT.)3. Reconciliation of Inventory Accounts

A. Run the Inventory Audit Report (Inventory\Inventory Reports)i. Inventory sub-ledger report for reconciliation & verificationii. Multi-functional

B. Verify totals match Balance Sheet

4. Run Financial Reports for Year-End reviewA. Balance SheetB. P&LC. Trial Balance

Next - As requested from our poll results, we will be diving deeper into the inventory reconciliation process (Step 3 from above).


professionals.










➢To compare the on-hand inventory value reconciliation to inventory G/L account balances

➢To be able to work out the difference between what’s in your records and what’s in your warehouse

➢reduce stock discrepancies and understand why there are discrepancies in the first place

➢Run inventory valuation reports that are reliable and represent accurate equity value in the balance sheet

➢To be able to run audit trail for the posted inventory transactions in the chart of accounts

➢For year-end valuation reporting and period end postings

RECONCILIATION OF INVENTORY ACCOUNTS – WHY IS IT IMPORTANT?










Step 1: Check your physical inventory count

Step 2: Compare physical count with inventory records

Step 3: Look at inventory deliveries/shipments since the last reconciliation

Step 4: Double down on discrepancies and prepare Cycle Counts

Step 5: Consistently reconcile your inventory

RECONCILIATION OF INVENTORY – WHERE TO START?

✓ Start with the actual Physical Inventory Reconciliation










➢This report provides an audit trail for the posted inventory transactions in the chart of accounts

➢use this report to make comparisons between the accounting view (inventory balance accounts) and the logistics view

➢This report does not recalculate the cost but displays the information from the database

➢The report is available only for companies using the perpetual inventory system

➢This report displays the total inventory value for the items in your warehouses

RECONCILIATION OF INVENTORY – AUDIT REPORT










When you run this report, make sure that:

• The system date information is selected properly.

• The Display setting is set to Items.

• The Display OB for Items/Accounts with No Transactions checkbox is selected

Note: If a variance remains after reconciliation between SAP Business One and the legacy system, for example, due to different prices, you must correct this difference manually.

RECONCILIATION OF INVENTORY – AUDIT REPORT (CONT.)










PERFORMING YEAR-END CLOSE

The third and final phase – will illustrate Closing the Fiscal Year.

1. Confirm period status and create the new fiscal year (If not previously created)Navigate to Administration > System Initialization > Posting Periods

2. Run Period End UtilityNavigate to Administration > Utilities > Period-End Closing

A. Review Utility ScreensB. Verify Total & ExecuteC. Run Balance Sheet – verify retained earnings

3. Open Posting Periods – Change period status to Locked


professionals.









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performing year end closing in sap business one

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