YEAR END CLOSING
Closing the fiscal year in Navision Financials involves five steps:
1. Review all your accounts and make sure that all the accounts that should be closed out to retained earnings are set to Income Statement.
2. Backup your data.
3. Close the fiscal year. On the General Ledger menu, click Periodic Activities, Fiscal Year, Accounting Periods. Click Close Year.
4. Close Income Statement. On the General Ledger menu, click Periodic Activities, Fiscal Year, Close Income Statement. This routine will create the closing journal entry into a batch.
5. Review and then Post the year-end closing entry along with the offsetting equity account entries.
Navision Financials does not require you to close a year, but doing so will make working in the system easier for you because you will be able to take advantage of the convenient filtering options provided by Navision Financials. And you don't have to worry about losing details of transactions when you close. Navision Financials retains all details, even after you close the year.
When you close at the end of the year, the system moves your earnings from calculated earnings, or the Current Earnings account, to a posted account, or the Retained Earnings account. The system also marks the fiscal year as "closed", and marks all subsequent entries for the closed year as "prior year entries".
The system then generates a closing entry, but it does not post the entry automatically. Navision Financials offers you a great deal of flexibility by letting you make the offsetting equity account entry or entries, which lets you decide how to allocate your closing entry. For example, if your company has several divisions, you can let the system generate a single closing entry for all the divisions, and you can then make an offsetting entry for each division's equity account.
After you close the fiscal year you can still make entries in the accounts in that year. However, the system marks them as prior period adjustments.
Closing the Fiscal Year
The Accounting Periods option lets you close the fiscal year and the accounting periods within the year. After you close these periods, you can generate the year-end closing entry. Once you close the fiscal year you cannot open it again.
From the General Ledger Menu, select Periodic Activities, Fiscal Year. Select Accounting Periods, then click on the Close Year button. The system displays a message explaining what will occur if you close the fiscal year. It also verifies the dates and lets you confirm your choice before it closes the year.
Generating the Year-End Closing Entry
The Close Income Statement option lets you generate the year-end closing entry in the general journal. From the General Ledger menu, select Periodic Activities, Fiscal Year. Select Close Income Statement and a definition window appears. Enter the information for the statement in the fields on the definition window. These include:
Ending Date - Enter the last date in the fiscal year you're closing.
General Journal Template - Enter the name of the general journal for which you want the system to make the year-end closing entry. Do a Lookup (F6) for a list of journals to choose from.
General Journal Batch - Enter the name of the batch in which you want the system to make the year-end closing entry. Do a Lookup (F6) for a list of batches to choose from.
Document # - Enter a document number to be used of the year end closing entry i.e. YE-2000 for year end 2000.
Posting Description - Enter the description for the year-end closing entry.
Close Per Business Unit Code - Check box if you want the system to make separate entries for each business unit.
Close Per Department Code - Check box if you want the system to make separate entries for each department.
Close Per Project Code - Check box if you want the system to make separate entries for each project. However, if you have a project spanning over two or more fiscal years, do not check this box.
Click OK to confirm information and exit window.
Completing and Posting the Year-End Closing Entry
After you use the Close Income Statement option to generate the year-end closing entry or entries, you must then go into the journal you specified in the definition window and make the balancing entry. Then you can post the entry.
Make an offsetting entry in the journal for the balancing amount using your Retained Earnings account. You can enter this account number in the Balancing Account field in the closing entry for the same result. However, using this field will cause detailed transactions to show up in the Retained Earning account.
From the journal, on the Posting button pull-down menu, select Post and Print to post the entries and print a posting report or Post to post without printing a posting report.
If the system detects an error, it displays a message describing the error. If the posting is successful, the system removes the posted entries from the journal.