Year-End – Closing Fiscal Year

Purpose of this document

The closing fiscal year is a process that is run at the end of each calendar or fiscal year to transfer the balances from the revenue and expense accounts to the respective net asset (fund balance) accounts. The transferred entries are marked as closing entries in the G/L Entry Table in compliance with GAAP. Once marked, these entries can be excluded to run revenue and expense reports across multiple fiscal years. Ceres allows the user to run the Close Income Statement process an unlimited number of times. The process to close the fiscal year requires multiple steps which are outlined in the document.

Ceres Object release 6.00.00 is required for the functionality described in this document.

TABLE OF CONTENTS

• Accounting Periods
• Close Income Statement
  • Post the Closing Entries
  • Reclosing the Year

Accounting Periods

The first step in the Year End Process is to close the Accounting Periods. This process sets each period within the fiscal year as closed. This allows the user to begin the closing process. The close process does not stop a user from posting entries to a closed period. Allowable posting dates are controlled by updating the Allow Posting From and Allow Posting To fields in the General Ledger Setup and/or User Setup.

1. To close the Accounting Periods, select “Search” from the Dynamics 365 Business Central Banner and entering “Accounting Periods” in “Tell me what you want to do” then selecting “Accounting Periods” from the results in the Go to Pages and Tasks section OR by selecting the “Accounting Periods” menu action (if present) from your Role Center home page.

2. From the Accounting Periods Page, select Home à Close Year.

3. A dialog box will display indicating which fiscal year you are closing. Select Yes to proceed. This will automatically update the Closed field for each month within the fiscal year.

4. Normally when you close a year, you should create a new year right away. From the Accounting Periods Page, select Process à Create Year. This will automatically enter the data for the next fiscal year. If it is correct, select OK to proceed or adapt the data as needed and select OK.

Close Income Statement

The Close Income Statement process creates Closing Entries to transfer the Revenue and Expense balances by Dimension, Fund, and Branch Code to the applicable Net Asset Account. This process creates a Journal Entry that must be reviewed and posted before the closing is complete.

You can review or delete the closing entries from the Journal and rerun the Close Income Statement process as many times as necessary. Once you post the closing entries you can post additional transactions to the closed fiscal year, such as audit entries. You can then reclose the income statement which will only close the new entries.

Note: Balance Sheet Accounts do not generate closing entries.

1. To create closing entries select “Search” from the Dynamics 365 Business Central Banner and entering “Close Income Statement” in “Tell me what you want to do” then selecting “Close Income Statement” from the results in the Go to Pages and Tasks section OR by selecting the “Close Income Statement” menu action (if present) from your Role Center home page.

2. A Close Income Statement Page will be displayed. On the Option FastTab update the fields, as necessary.

Fiscal Year Ending Date: Confirm that this is the correct fiscal year you want to close. If not, input the correct date. Please note that you can only select a fiscal year that is closed.

Gen. Journal Template: Select the Journal Template you want to use for your closing entries.

Gen. Journal Batch: Select the Batch you want to use for your closing entries. It is recommended you create a Batch just for your closing entries, such as YRCLOSE.

Document No.: Input the Document number you want to use for your closing entries. This field will automatically fill in if a No. Series is linked to the Journal Template.

Retained Earnings Acct.: Input your Retained Earnings (Net Assets) G/L Account. Once the entries have been created, you can split them across multiple Retained Earnings (Net Assets) G/L Accounts.

Posting Description: Enter a description for your closing entries. This field will default to Close Income Statement but can be overridden.

Close by Business Unit Code: Toggle this field on if you want to create a closing entry for each Business Unit. Generally, this is used when creating closing entries in the consolidated company.

Dimensions: On the ellipsis button to the right of the field and then select the Dimensions you would like to create closing entries for.

Fund No.: Toggle this field on if you want to create closing entries for each Fund.

Branch Code: Toggle this field on if you want to create closing entries for each Branch (Responsibility Center).

Inventory Period Close: Toggle this field on to indicate that the inventory periods with ending dates equal to or greater than the last date of the accounting period is closed.

3. Click OK to proceed with the Close Income Statement process.

Post the Closing Entries

Once the closing entries have been created, they should be reviewed and then posted. Posting the entries transfers the balance from the Revenue and Expense Accounts to the Net Asset Accounts.

1. To post the closing entries by selecting “Search” from the Dynamics 365 Business Central Banner and entering “General Journals” in “Tell me what you want to do” then selecting “General Journals” from the results in the Go to Pages and Tasks section OR by selecting the “General Journals” menu action (if present) from your Role Center home page.

2. Select the Journal Template and Journal Batch you selected above when you ran the Close Income Statement process. In this example, the closing entries were written to the YRCLOSE Batch in the General Journal Template.

3. Review the closing entries. You may need to split out the Net Assets entry by Fund No to post.

4. Select Post, or Post and Print to post the closing entries.

5. To review the posted entries select “Search” from the Dynamics 365 Business Central Banner and entering “G/L Registers” in “Tell me what you want to do” then selecting “G/L Registers” from the results in the Go to Reports and Analysis section OR by selecting the “G/L Registers” menu action (if present) from your Role Center home page.

6. To display the closing entries that were posted, select Process à General Ledger. Please note that all closing entries will be preceded with C in the Posting Date field.

Reclosing the Year

The fiscal year can be closed multiple times throughout the year. It is common practice for some food banks to run the Close Income Statement function shortly after their yearend and then again after the audit adjustments have been entered.

Reclosing the Year is as simple as rerunning the Close Income Statement function. Ceres will create closing entries for any new transactions or entries that have not been closed previously. Before running the Close Income Statement function, you should always check to make sure that no closing entries exist in the Journal. If so, either delete or post the entries before you rerun the Close Income Statement function.