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Financials Year-End Processing

Paul Sterzinger

Senior Business Analyst

Lawson R&D

This information is confidential and proprietary to Lawson © and cannot be reproduced without permission.

Accounts Payable

• AP195 – Period Closing is run to insure all transactions have been processed and interfaced to the general ledger.

• After the last period is closed for the fiscal year, run AP199 – Vendor Balance Year End– Updates the new year period end dates on the vendor group.– Transfers the current year vendor balances to last year.

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Accounts Payable

• Archiving/Purging Vendor Invoices– Archiving invoices is used to speed up batch and on-line

performance (AP198).• Moves historical invoice, distribution and payment records to

archive files.

– May be used instead of purging– You can inquire and or report on archived invoices.– Purged invoices permanently deletes records and archives

them to a csv file (AP300).

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Asset Management

• Make sure you are finished adding, adjusting, transferring and disposing of asset records.

• Release transactions using AM170.• Determine if the 40% tax rule applies to the depreciation

calculations.– This rule requires that if 40% or more of all assets are placed into

service in the last fiscal quarter, special depreciation calculations apply

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Asset Management

• 40% tax rule determination.– Run AM220 to list assets added during the past year.– Run the AM220 again for assets added during the last

quarter.– Compare the reports to determine if 40% of the assets placed

in service during the year were placed in the last quarter.

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Asset Management

• If the 40% rule applies, adjust the depreciation conventions for the assets that were placed in service during the fourth quarter of the year.– Run AM125 – Mass Adjustments. On the Asset Book

Adjustment tab change the convention code to MQ (Mid Quarter)

– Update the changes made in AM125 by running AP170 – Processing Release

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Asset Management

• Continue running the normal period close process.– Run AP180 - Depreciation Calculation.– Run system reports and verify asset information.– Once satisfied that the reports and assets are correct post

and close the period by running AM190 - Period Close. – Running AM190 with the release parameter set to yes is

irreversible.

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Asset Management

• Run year end reports.– Addition Report AM220– Adjustment Report AM225– Transfer Report AM230– Disposal Report AM240– Projection report AM255– Asset Report AM260– Property Report AM265– Account Balance Report AM270– Current Year Deprecation Report AM280– Book Comparison Report AM285– Tax Credit Report AM290– Recapture Report AM292– FASB Reconciliation Report AM295

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Asset Management

• Make sure you have run all reports. You can not run them once year end is processed.– Note: If you have depreciation history enabled for the books

you can use AM281 – Depreciation History Report to report on previous year depreciation history

• Back up the data.• Run AM195 – Year End Close to close out the year.• Verify the year end was successful by opening

AM01.1 – Calendar and inquiring on the company and book.

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Activities

• There are no mandatory procedures for year end processing.

• Optional - run AC195-System Control to close activities on a monthly basis.– Closing the activities allows the users control over

transactions for balancing purposes.– Most clients do not close activities because there is no back

posting functionality

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Accounts Receivable

• AR199 – Period Closing Report is also used for year end processing.– The AR199 is run with the year end parameter set to “Y”.

• In addition to normal period end processing the AR199 will rolls the following balances from current year to last year.– Period Billed, Chargebacks, Credits, Write-offs and Paid

• Moves any value for the next year to the first period.• Moves the year-to-date Invoice Payment Average

(IPA) and Days Beyond Terms (DBT) totals to last year to update customer statistics.

• The AR199 should prompt you to run the year end option for the last period– Do NOT run the AR199 twice .

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Lawson General Ledger Year-End Procedures

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Year-End Process Flow

Backup Lawson Data

Verify Fin. Stmts. for LY (2004)•Run GL291, GL292

& GL293

Verify all subsystems are closed in CY (2005)

•Required if using closing control

Final Close allperiods of LY (2004)

•Run GL190 to post all entries

•Run GL199 with Final Status

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Verify Fin Statements for Last Year (2004)

• Verify totals • Verify company is in balance

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Final Close All Periods of Last Year (2004)

• May want to verify year-end fin statements after running this

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Verify Subsystems are Closed in Current Year (2005)

• Access from Drill around on Company field• Interface subsystem entries, then close subsystems

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Year-End Process Flow

Run Currency Revaluation (GL191)

•Run AP191 and AR196, if applicable

Run GL195 or GL196 to translate

multiple CUs into a common CU

Are you using Currency Exchange?

Are you using Currency Translation?

YesNo

Yes

No

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Year-End Process Flow

Do you store statistical amounts/units in Budgeting?

Roll statistical or historical budgets forward one year using FB120

No

Yes

Backup Lawson Data

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Roll Statistical/Historical Budgets Forward

• Roll statistical or historical budgets ahead one year so RW reports don’t need to be modified

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Roll Statistical/Historical Budgets Forward

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Year-End Process Flow

Verify Year-End Fin. Stmts. for CY (2005)•GL291, GL292 & GL293

Verify Fin. Stmts. for pd. 1, CY (2006)

Close last period of the current year

•GL199-Limited status

Review period end datesfor NY (2006)•GL10.1

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Verify Year-End Fin Statements for Current Year (2005)

• Verify totals • Verify company is in balance

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Review Period Ending Dates

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Close Last Period of Current Year (2005)

• Closes the last period and the year• Rolls account balances forward

– Current year last year– Next year current year

• Creates consolidation records for next year• Calculates beg. balance for all BS accounts for next

year• Creates a closing entry with a status of history in

period 99– Undistributed RE RE

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Close Year - Consolidation Company

• Doesn’t auto-reverse entry in next period• Reverses out balance sheet account balances in

period 1– Prepares system for translation in new year

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Year-End Closing Entry

• Use Journal Control (GL45), Journal Analysis (GL41) or Trans. Analysis (GL90) to display year-end closing entry

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Processing in NY before Closing CY

• Select Next Yr Beg Bal prior to closing year to calc beg balances for the next year

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Processing in NY before Closing CY

• Use to bring adjustments from CY to NY prior to closing year• Can run multiple times for multiple batches of adjustments

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Verify Fin Statements for Period 1 (2006)

• Verify totals • Verify company is in balance

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Year-End Process Flow

Adjust dates on CA and RJ entries

•Use CA10.2 & GL70.2to adjust dates for CY (2006)

Delete Transaction History using GL300

Delete unused accounts•Use GL122 for posting accounts •Use GL100 for detail accounts

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Adjust Dates on CA Entries

• May want to adjust ending dates beyond the end of the CY (2006)

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Adjust Dates on RJ Entries

• May want to adjust ending dates beyond the end of the CY (2006)

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Delete Transaction History

• Can delete unwanted transactions, balances & budgets• Can optionally save information in archive files

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Delete Unused Posting Accounts

• Accounts must have no budgets or transactions for at least two years

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Delete Unused Detail Accounts

• Accounts must have no budgets or transactions for at least two years

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Special Considerations – Period 13

• Can I use period 13 as an adjustments period?– At least one day must be dedicated to this period – Journal entries can be auto-reversed from period 12 to period

1, other entries cannot– Spread action in budgeting spreads to all periods

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Special Consideration – Commitment Accruals

• What is the purpose of Period Year End GL Commitment Accrual?– Optional process– Updates period/year on outstanding commitments &

encumbrances– Create accruals for outstanding commitments &

encumbrances• Auto reverse accruals in next period

– Year-end – can create a budget journal entry for NY instead of an accrual entry

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Related Knowledge Base Articles

• General Ledger Year End Closing Process – Articles 83938, 74398, 532032, 550248– What Happens When I Accrue Encumbrances & Commitments?– Articles 73832, 100884

• Consolidation Company Year-end Entry– Article 72115, 83940

• Performing Optional Year-end Procedures– Article 532046, 92992, 73910

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QUESTIONS ??

Paul Sterzinger

Senior Business Analyst