General Ledger Year End Procedure

The Year End Close can be done any time after the end of your Fiscal Year, when your accountant provides the final Year End adjustments.
However, until the Year has been closed in the software, the Balance Sheet for the next Year is not in balance and prints with a discrepancy equal to the Year End Close amount. This is automatically corrected once the Year is closing entries are posted.

Texada SRM does not require the revenue and expense accounts to be reset to zero. The software achieves the same result by recognizing the YEAR START within General Ledger programs.
The year-to-date revenue and expense totals are then accumulated from this YEAR START.

By taking this approach, SRM provides full access to information from previous Years. To take advantage of this feature, do NOT reset the revenue and expense accounts to zero at Year End.

To close your Fiscal Year, follow these 7 steps:

STEP 1:

Complete all daily and month end maintenance.

STEP 2:

Make sure that the PLRE account is in the Chart of Accounts as an Expense account. The PLRE account is used by the system for Year End Close of Retained Earnings only.
It should NOT be used at any other time. If it is not there, add it as an expense account using Chart Of Accounts:

       ACCOUNT #    Type in PLRE.
       DESCRIPTION  Enter PROFIT/LOSS YEAR END CLOSE.
       TYPE         Type in X for Expense.

STEP 3:

Post the accountant's closing entries.

After your accountant has reviewed your books for the Year, several adjusting entries to the G/L are usually required. Obtain this list of closing entries from your accountant, and enter them using Miscellaneous G/L Journals.
Post the entries using Post Miscellaneous Journals.

Note: Do not make year end adjusting journal entries to the A/P or A/R Control Accounts.
See the Adjustment comments below:

A/P Adjustments:
If the accountant's closing entries refer to the Accounts Payable account, determine first if the Accountant meant the ACCRUED Accounts Payable account instead. Usually there are several accruals that the accountant requires to be entered for this year end and then reversed again for the next fiscal year.
If the accountant wants entries posted to Accounts Payable, do NOT post that entry using Miscellaneous G/L Journals as this will make the A/P Sub-ledger out of balance with the A/P Control Account in the G/L. Instead, select specific Vendors and make the adjustments to them using A/P Invoices in order to post the accountant's entries.

A/R Adjustments:
If the accountant wants entries posted to the Accounts Receivable Account, do NOT post that entry using Miscellaneous G/L Journals as this will make the A/R Sub-ledger out of balance with the A/R Control Account in the G/L. Instead, select specific Customers and make the adjustments to them from the A/R Menu. Use either A/R Invoices or Bad Debts in order to post the accountant's entries.

STEP 4:

Determine the Net Income amount for the Fiscal Year.

If the Net Income amount has changed due to closing entries from the accountant, determine the final Net Income by running Summarize G/L For Financial Statements again, then re-printing Income Statement.

The Net Income for year-to-date at the bottom of this report is the NET INCOME figure needed in the next step. It should be IDENTICAL to the accountant's figure for Net Income.

STEP 5:

Make the closing journal entry using Miscellaneous G/L Journals and post in Post Miscellaneous Journals.
Debit the PLRE account and Credit the Retained Earnings for the Net Income Amount, as of the last day of the Fiscal year.
For a profit, enter the amount as positive. For a loss, enter the amount as negative.

Screen Layout of Journal entry for Year End Close

~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~
                        MISCELLANEOUS JOURNALS

JOURNAL ENTRY NUMBER......<      159     JOURNAL TOTAL:
TRANSACTION DATE..........< 10/31/20XX     TRANS TOTAL:
BATCH.....................<

SEQ#      ACCT#       DESCRIPTION      DIV TRANS AMOUNT       D/C  SOURCE
----      =====       -----------      === ------------       ---  ------
001       PLRE        YR END CLOSE            89778.40         D    JN159
    REF: YEAR END CLOSE                DETAILS:

002       3200        RETAINED EARNINGS       89778.40         C    JN159
    REF: YEAR END CLOSE                DETAILS:

         ENTER TO CONTINUE ____

~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~

STEP 6:

Post the journal entry using Post Miscellaneous Journals to finish the Year End.

To confirm the adjustments are correct, run Summarize G/L For Financial Statements again, and reprint Income Statement and Balance Sheet.

STEP 7:

To reset the default reporting dates to the new period, run Summarize G/L For Financial Statements again, but this time for the new fiscal year and the new period.