Year-end closing procedures for Dynamics GP — tips you don’t want to miss

The year-end close process in Dynamics GP is often a daunting task for accounting teams, but with the right planning and the proper tools and information, this process can be seamless and manageable.  Our team has successfully led many clients through the year-end close process year after year. While the year-end closing process involves a number of steps, below are a few tips and tricks to keep in mind when processing the year-end close in Dynamics GP:

Dynamics GP allows users the flexibility to post General Ledger entries once you have performed year-end closing steps. Once all the sub ledger transactions are complete and posted through to the general ledger, you can proceed with the year-end close for that fiscal year.   You can post back adjusting entries to the general ledger after the year-end close, as long as you do the following:

• Depending on user securities, you can allow posting in a closed year. Majority of the time, this has to go through your Dynamics GP Administrator. Simply check the box to “Allow Posting to History” in the General Ledger Setup window. We recommend that you uncheck this box after you post the adjusting entries. This will prevent users from inadvertently posting back to a closed year.

Financial > Setup > General Ledger

• It is also important to open the Fiscal Period for December of the closed year to post the adjusting entries. Again, the ability to perform this will depend on your predefined user security.

Administration > Setup > Company > Fiscal Periods

Any adjusting entries will automatically carry forward to the new fiscal year, i.e., postings to Balance Sheet accounts will carry over to the same accounts in the new year, and postings to P&L Accounts will carry over to the Retained Earnings account in the new year based on the Retained Earnings Account designated in the General Ledger Setup window.

It is very important to keep in mind that you are only allowed to post one historical year back.

It is important to check the Account Type to confirm that Balance Sheet and P&L Accounts are set up correctly. If assigned the wrong Account Type, the close process will carry over balances incorrectly.

Be sure to run the SmartList for Accounts and search for any accounts that are set up with the incorrect Posting Type.

You will need to click Search and filter by:

• Main Account Segment = Balance Sheet segments and
• Posting Type = “Profit and Loss”

Once you have applied your filters, verify that there are no results returned in the SmartList.

If Accounts are listed, you will need to modify the Posting Type to Balance Sheet.  Doing this will ensure that the Balance Sheet Account carries forward to the Balance Sheet Account.

Click Search and filter by:

• Main Account Segment = Profit and Loss Account segments and
• Posting Type = Balance Sheet

Make sure that there are no results returned in the SmartList.

If Accounts are listed, you should modify the Posting Type to Profit and Loss. This will make sure that the Profit and Loss Account is closed to the Retained Earnings Account.

You have the option to zero out Unit Accounts or carry over their balances to the new fiscal year. All you need to do is change the year-end close preferences on the Unit Account window.

Financial > Cards > Unit Account

By first opting to print the report to screen, this will allow you to confirm that the year-end process completed and that you can see the report before you send it to a printer or pdf.  This will help mitigate any user issues with printing directly to the printer.

In older versions of GP, if users had issues with the year-end close, they had to restore a backup of the database to re-run the year-end close. This can be time consuming. With the release of GP2013 R2, Microsoft added a feature allowing users to reverse the year-end close process through the user interface should a reversal be needed.  

It is extremely important to back up the database before running the Reverse Historical Year process!

While Dynamics GP now offers a process in the front-end to reverse the Historical Year, we still recommend backing up the system and company databases before starting the year-end close process. The Reverse Historical Year option is only meant to reverse the closing of the General Ledger. If you close the sub ledgers in addition to the General Ledger, it is even more critical to back up the databases before running the year-end close process.

Performing year-end close procedures may seem daunting to many ERP users. Microsoft’s support documentation provides step by step instructions for performing all required processes for closing out 2020 and setting up for the new year fiscal periods. Contact our GP Support team for assistance at any point before or during your year-end close. Be sure to use the recommended checklist for processing the year-end close in Dynamics GP.

Complete the year-end closing procedures using the following steps. It is our recommendation that you make a backup of your database as noted. This will enable you to quickly restore your data should a problem arise. Microsoft is not providing tax and year-end updates for clients who are running Microsoft Dynamics GP 2015 per Mainstream Support. If you are a Dynamics GP 2015 user, Rand Group’s support team is available to discuss your options.

1. If General Ledger is integrated with other modules, complete the posting and closing procedures for other modules prior to closing General Ledger.
2. Post the final adjusting entries in General Ledger.
3. Print an account list to verify the posting type for each account.
4. Close the last period of the fiscal year. Note: This step is optional.
5. Optional: Perform file maintenance on the Financial series group of modules.
6. Verify the settings in the General Ledger Setup window.
7. Make a backup.
8. Print a final Detailed Trial Balance report.
9. Print the year-end financial statements.
10. Set up a new fiscal year.
11. Close the fiscal year.
12. Close the fiscal periods for all the series. Note: This step is optional. 
13. Adjust the budget figures for the new year, and then print the financial statements.
14. Make a backup.

If you require support with your year-end close or have questions regarding upgrade options, contact Leticia Graham at [email protected] or 866.714.8422. We are happy to discuss your options for a successful year-end close.