How to Run Closing Procedures in Acumatica
Follow these Steps to Close Periods in Acumatica
1. Understanding Closing Periods
In Acumatica, the financial year is closed automatically when you close the last period of the current financial year. Therefore, you should only close the last period of a financial year if your company has prepared and finalized all financial statements.
Year-End Closing Procedure Overview
- Generate periods for the new year and activate at least one of these periods using the Master Financial Calendar (GL201000).
- Complete the tasks on your company’s “year-end” checklist.
- Close the period in your subledger(s).
- Close the last period in the Finance/General Ledger module.
Accounts and Balances
The YTD Net Income account balance is updated with the Retained Earnings account when you close the financial year. The Retained Earnings account accumulates the net income or loss achieved throughout each financial year. After closing the year, the balance of the YTD Net Income account is reset to zero for the start of the new financial year. All balances for balance sheet accounts remain in place for the new financial year, while balances of income statement accounts are reset to zero.
2. Closing Procedures
Prior to close, follow your company’s internal procedures to ensure any prerequisite are complete before closing a financial period. These tasks may include the following:
- Generate recurring documents and releasing them
- Performing allocations
- Performing revaluation of currency accounts
- Releasing and depreciating Fixed Assets
- Tax adjustments
- Inventory adjustments
- Generating and reviewing the trial balance
To close a period in your Finance/General Ledger, you must first close the the period in all subledger modules.
These include the following:
- Accounts Receivable
- Accounts Payable (Note: At year end you must also print the 1099 Form Report and close the year for 1099 payments)
- Cash Management
- Fixed Assets
- Inventory
3. Closing a Period
Once you close a financial period in Acumatica, users can no longer posting new transactions to it. For this reason, you should verify that all transactions have been posted for the period prior to closing it. Please also note, you cannot close a financial period if there is a previously unclosed financial period; however, you can close close multiple periods at one time.
Closing Process
- Close the period in the subledger. Make sure to review the unreleased documents report for the financial period and make any corrections needed prior to closing. The unreleased documents report should be blank before closing the financial period.
- Generate and post any recurring transactions.
- Perform period-end adjustments.
- Revaluing general ledger accounts so that the balances of the accounts in foreign currencies are correct in using the end-period exchange rate.
- Review the trial balance and transactions.
- Reclassify transactions if there are errors.
- Run allocations if distributions between branches, accounts and subaccounts are needed.
- Close the period in the general ledger.
4. Closing a Period in Subledgers
When you close the General Ledger, Acumatica also provides the option to close the period in your subledgers so the processes can be done at the same time. However, you may decide to close periods in subledgers (Accounts Receivable, Accounts Payable, Cash Management, Fixed Assets, Inventory) separately in your system.
Review the status of financial periods on the Manage Financial Periods (GL503000) screen. Also, before closing a period in a subledger, make sure that there are no unreleased documents.
To close financial period for a subledger, use one of the corresponding forms:
- Accounts Receivable > Processes > Close Financial Periods (AR509000)
- Accounts Payable > Processes > Close Financial Periods (AP506000)
- Cash Management > Processes > Close Financial Periods (CA506000)
- Fixed Assets > Processes > Close Financial Periods (FA509000)
- Inventory > Processes > Close Financial Periods (IN509000)
5. Closing a Period in the General Ledger
To assign a closed status to a financial period in Acumatica, use the Manage Financial Periods (GL503000) screen.
Before closing any period, run the Unposted Documents report to check for any unposted documents. This report should be blank before you start closing the financial period.
Note: When closing the General Ledger, Acumatica automatically generates auto-reversing batches for the selected financial period if the Generate Auto-Reversing Entries on Period Closing checkbox is marked for the General Ledger Preferences. Also, validate that the next financial period is open before starting the financial period close to ensure these auto-reversing entries can populate the correct period.