Year-End Processing

Year-end closing is accomplished by preparing a manual journal to transfer the year-end balance in the year-to-date (YTD) retained earnings account to the inception-to-date (ITD) retained earnings account.  This entry can be made manually or automatically, but must be done in the first accounting period of the new fiscal year before and any posts are processed for the first period.

The period totals and account balances for the previous fiscal years remain in their appropriate fields in the Account/Center Master File by year.  If the year-to-date retained earnings account is not transferred in period one, unnecessary rounding will be printed when financial statements are run.

In order to have the system automatically transfer the YTD retained earnings account balance to the ITD retained earnings account balance, you must set the Automatic Retained Earnings Flag (AUT/RE) on Reference File category P01 (General Ledger Processing Options) to Y (Yes).  If you use the automatic function, the amounts are transferred when the first demand post is requested for period one.

The General Ledger Post Program (GL200P) performs the following actions as part of processing for the first period of each fiscal year:

1.   The amount in the year-to-date last year field on the Account/Center Master File record of each income statement account is replaced with the amount in the current year-to-date field.

2.   The amounts in the quarter-to-date and year-to-date fields are reset to zero.

3.   The amount in the final period (12 or 13) actual amount field of each balance sheet account is transferred to the year-end balance last year field.

The system has two accounts that require special year-end processing:  the year-to-date retained earnings account and the suspense account.  Each period, the suspense account should be checked to ensure that no transactions have been posted to the suspense account.  The General Ledger Post Program will post transactions to suspense if an account number is not found on the Account Master File or if the account has been deactivated.  This allows transactions to be posted but posts errors to the suspense account.

The Verify Control Year field on the Processing Options Reference File category (category P01) should be changed for the new year.  The Initialize Control File option should then be selected from the General Ledger Menu so that the control file records for the new year are created.  This way manual journals may be entered for the new year.

Lastly, transaction and master file history options may be selected, if desired.  These options allow the purging of transaction files and account files for previous years.  In addition, you have the option to copy the Account Master File to history, and thus archive account balances by year, or run custom reports over the data.  This is an optional step because all account master records are stored by year.  The ability to copy the Account Master File to history can facilitate the upload and download of account information to a PC without affecting the account records in the MAC-PAC system.

Related

• Year-End Journal Entry Reports