Suggested End-of-Year Procedures
Note: in the following procedures, "last year"
means the year being closed, and "next year" means the subsequent
year, no matter in which year the procedures are being performed.
Follow the steps in the order they are given. If
you are using the Traffic system only, skip the accounting steps as they do not
apply. Explicit instructions for prompts that appear in individual programs can
be found in the help screens and your SUMMIT User's Manual. Check the Table of
Contents for the exact page numbers. If you have any questions on any of the
steps, please give SUMMIT support staff a call before continuing on to the next
step.
Billing and A/R
1. Your accountant may want you to write-off bad debt
amounts before the beginning of the new year. (If you are using the General
Ledger module, verify there is a G/L account for bad-debt entered on field #9
for each cash sales type in Sales Type Data Entry on Menu 1.) Go to menu 9, Enter Other A/R Transactions and add an aw transaction to
reduce the invoices that have balances to be written off.
2. After printing the last batch of invoices for last year
and before printing any invoices for the next year, you must
update sales figure history. On menu 9, choose Update Billing History At
Year End. Specify what to do with goal figures (see manual). If you have
never entered goal figures, choose the option to leave them alone.
3. It is OK to print invoices in January before closing last
year's General Ledger, as long as step 2 has been completed.
Accounts Payable
For the vendor "purchases this year" field
to be accurate, you must do the following BEFORE entering any vouchers for the
new year:
4. First, it is a good idea to backup vouchers before
updating vendor figures. You can backup just accounts payable by selecting Backup
Summit Data Files on menu 41 and choosing (s)ome. Answer (y)es to
Accounts Payable only. This backup should require only one formatted disk (two
at the most). Hold onto this disk in case of a problem during the next step.
5. On the Accounts Payable menu choose Vendor Purchases
Year End Update. This program will move YTD figures to Purchases Last Year
on the vendor records, leaving you with $00.00 YTD purchases for each vendor.
6. Now you can resume normal A/P operations. January dates
can be entered on both the purchases and cash disbursement sides of the
voucher (but remember, you cannot print G/L for January unless last year has
been closed).
Optional Activities:
7. Print a Check Register for all of last year if
you want to keep it for your records.
8. Print 1099's if you have entered the codes on vouchers.
You will have a chance to make a test run on 1099's.
Payroll
AFTER the last payroll of last year has been run, do the
following steps:
9. Run the Payroll Summary for last year to keep for
your records.
10. Run the 940 Report (annual Federal Unemployment
Insurance Report) for year ending last year.
11. Print W2's on BLANK paper. Check for correct alignment
against the forms you have ordered. Verify information in boxes is correct. If
everything is alligned and the information is correct, print the final W2's on the printed forms.
12. Check your last year Circular E tax booklet for any
changes to FICA and federal tax figures. Also, check your last year state tax
requirements. Change these figures in Payroll Customization before running
your first payroll for next year.
NOTE: If you need to run payroll for next year
before printing W2's for last year, print/screen the customization pages to
record last year's settings. Then change the tax figures in customization to the new year's figures to
run the new year's payroll. When you are ready to run W2's, change customization
back to last year's figures and run the W2's. Finally, return the rates and
amounts back to the new year's figures.
General Ledger
The following steps must be completed BEFORE Printing
General Ledger for the new accounting year:
13. If you are using the SUMMIT accounting modules, one of
the steps to close December will be to enter year-end adjustments specified by
your accountant. This may include writing off bad debt on invoices and other
year-end journal entries. However, you may not get all the year end adjustments
from your accountant by the end of December. In this case, you can enter
transactions for January in the various accounting programs (A/P, Payroll, A/R),
but you will not be permitted to Print G/L for January, until you have
closed last year.
Toward the end of February, if your accountant still has not
given you the final adjustments and you need to print the G/L, close last year and enter the final adjustments after you receive them through Enter
End Of Year Adjustments on Menu 33. The only repercussion to waiting this
long to finalize last year is that you will be required to revise your financial
statement formats in order to print last year's end financials. In the Define
Financial Statement Formats program, the item definitions that read cur
will need to be changed to ly; and, ytd should be changed to ytdly.
After printing the last year financials, change back to cur and ytd.
14. After all adjustments have been made to December print
the journals, the general ledger, financial statements and a trial balance for
December of last year.
15. If everything is correct, print and post December's
General Ledger.
16. Go to menu 41 and do a complete Summit Data Backup
for (a)ll files. You may label this backup and retain it in your records for
last year.
17. On menu 33 run Year End G/L Close. This shifts
the columns in Account Definition Data Entry and closes the revenue and
expenses accounts to the Retained Earnings account.
18. In Customization on menu 33 change the fiscal
period start date to 1/1/xx.
19. Run a Trial Balance for January xxxx and check the
YTD balances for the following:
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expense and Income accounts should be zero |
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balance sheet accounts (assets, liabilities and capital accounts) should have a
balance equal to the ending balance on your final Trial Balance (or financial
statement) for last year |
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total DR and CR should be equal |
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Your Retained Earnings account(s) should include the profit/(loss) for last year. Do NOT let more than
one day lapse between closing the G/L and running the trial balance check! |
If these four things do not happen, don't panic, you have a
backup. You will need to do some research to determine what went wrong. Call SUMMIT
if you need help.
20. After closing the year, any adjusting entries for last
year must be entered thru End-of-Year Adjustments (menu 33). If you make
any End-of-Year Adjustments to income or expense accounts, don't forget
to also make an entry to transfer the amounts to your Retained Earnings account.
You may want to reprint Journals and Financial Statements for
last year for accounting records after making any additional adjustments. (See
instructions at step #15 on revising financial statements to print financials
for "last year").
Removing Old Data
The following steps are optional. You are not required to
remove data before beginning the new year. You may actually enter any "Thru
date" you choose, but consider your available disk space when choosing a
date.
21. On menu 34 run the Year-End Misc. Journal Entry
Removal through 12/31/xx.
22. On menu 31 run Year-End Completed Vouchers
Removal thru 12/31/xx. (This step is not required to resume normal A/P
operations for the next year).
23. Print any payroll reports you wish to keep for the last
year and then run Year-End Pay Period Data Removal thru 12/31/xx. WARNING:
Some states may require that you retain payroll information for the last
quarter to permit reports to be run for that fiscal year. In that case, remove
payroll records thru 9/30/xx only.
NOTE: It is not required that you remove last year's
payroll data before running a payroll for the new year. You can remove old
data at anytime.
24. On menu 4,9, and 10 use Remove Unneeded/Old Data to
remove any of the following data thru xx/xx/xx, or thru whatever date you
choose: programs, variable timings, invoices, contracts,
copy and bulk contracts. Invoices with a zero balance will be
removed. Programs, variable timings, contracts, copy and bulk contracts that
have a completed "Valid thru" date will be removed.
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