Month- and Year-End HomeBuilder Processes

Note

• Always perform all parts of this document for the Year-End and not just the section marked as Year End.
• Most Homebuilders will only need to pay attention to the following (however, it is advisable to read through the whole document to ensure you are not missing something):
  • AP.
  • Bank.
  • Date Control.
  • Year End.

Important

• If you have more than one currency, e.g., CAD and USD read first the Month End Currency Revaluation for Multicurrency Environments article.
• If you use Non-Construction Inventory Items, read first the Non-Construction Inventory Items article.

AR, AP, and Bank

Accounts Receivable

To reconcile the subledger to the general ledger for foreign currency accounts, the Adjust Exchange Rates Periodic routine must be run first.

• Print the Aged Accounts Receivable Report by Transaction Date
  • The filters on the Customer tab can be left blank unless you are using multiple accounts in the general ledger and wish to print the report by Customer Posting Group.
  • Enter the period ending in the “Aged as of” field.
  • Select Aged by Trans date.
• Agree the balance on the Aged AR report to the GL control accounts.
• Investigate any discrepancies. Generally, the only way to put the subledger out of balance is to post directly to the subledger account through the GL or to forget to run the Adjust Exchange Rate periodic. (more on this in Month End Currency Revaluation for Multicurrency Environments).

Accounts Payable

To reconcile the subledger to the general ledger for foreign currency accounts the adjust exchange rates periodic routine must be run first (details in Month End Currency Revaluation for Multicurrency Environments)

• Print the Aged Accounts Payable Report by Transaction Date.
  • The filters on the Vendor tab can be left blank unless you are using multiple control accounts and wish to print the report by Vendor Posting Group.
  • Enter the period end in the “Aged as of” field.
  • Select Aged by Trans date.
• Agree the balance on the Aged AP report to the GL control accounts.
• Investigate any discrepancies.

Bank Accounts

To reconcile the Bank Account subledger to the general ledger for foreign currency accounts the adjust exchange rates periodic routine must be run first.

On the general tab, the G/L Balance $ is the balance in the general ledger as of the statement date. The next field is the G/L Balance which is simply the G/L Balance $ converted to the foreign currency at the exchange rate as of the statement date. If you have not run the exchange rate adjustment this will not agree to the bank statement regardless of whether all items have been reconciled.

• Complete the bank reconciliation for each account.
• Print the Bank Acc. – Det. Trial Balance report. The report will show the balances in the currency of the bank as well as the local currency.
• Agree the local currency value to the balance to the GL.
• Investigate any discrepancies. Start by filtering the GL entries in each control account for the source code GENJNL.

Date Control

Important

Always ensure that you have both an “allow posting from” and an “allow posting to” date. If, for instance, you are missing the "allow posting to" date, you are allowing the system or that user to post at any time in the future.

Date Control- All Users

• Search General Ledger Setup, then in the General Ledger Setup page change the date ranges to the new period.

Date Control- User by User

• An individual user may have wider or narrower dates than the system dates. A classic scenario here is that the accounting team can post into last month and this month whereas general users can only post into this month.
  • To override the date ranges for posting by user go to User Setup. This is not the same as the User table, this is in addition to it and you must create records in this table to turn on this functionality.
  • As with the system-wide dates always ensure that from and to dates are selected (never have one date filled in leaving the other date blank).
  • If you leave both dates blank, the system-wide dates are available for that user.

Tip

There is an additional control in the User Setup associated with a special field on the GL Entries and Tax Entries called Tax Date. If you would like to know more about this topic, read the following help file from Microsoft: https://learn.microsoft.com/en-us/dynamics365-release-plan/2022wave2/smb/dynamics365-business-central/new-vat-date-field-documents-entries

Year End

Closing the Financial Year and Posting to Retained Earnings

Note

• Once the year has been completed and all transactions entered the financial year can be closed in a three-stage process (these instructions are a basic reminder only; please contact your system administrator if you are not completely sure how to close the year).
• After marking the Accounting Periods as closed; all this routine does is to take all accounts marked as Income Statement (on the GL Account card) and zero them out in a General Journal. The balance of this journal is then posted to a Retained Earnings Account.

Procedure

Tip

While you are on the Accounting Periods page, we recommend creating a new year at the same time. Most commonly, all that is required is to click on the Create Year button, view the suggestions on the next screen, and click OK unless you need periods that are not calendar months for 12 months.

• Accounting Periods – Close the year:
  • From within the Accounting Periods Page click on the buttons – Actions and then Close Year.
  • Follow the instructions.
  • Note this is not easy to undo so make sure you do not need to make period date changes after this process.
• Run the “Close Income Statement” routine to populate a General Journal
  • Fiscal Year Ending Date is automatically filled in, if it is incorrect check your period closing.
  • Enter a clean Gen. Journal Template (usually “GENERAL”) and Batch.
  • Add a recognizable Document Number.
  • Add the Retained Earnings Account if it is not automatically added or change if you want retained earnings to be posted to a different account.
  • Add a recognizable Posting Description.
  • In the Close By area select all the Dimensions that are used in the GL and select the Business Unit Code if you are in a Consolidation Company.
  • Click OK and move to the final step.
• Post the General Journal that was just created for you:
  • Go to the General Journal Template and Batch that you selected in the previous step.
  • If the entries look reasonable post the journal.
• The year is now closed, and the entries are made in the general ledger against the year-end posting date with a “C” in front of the date.
  • you may make further back-dated posting entries if required.