Fiscal year-end procedures are basically the same as those for closing an accounting period, except for some additional steps. Many companies never actually close the last period of the year. Instead, they leave it open so they can run reports and make audit adjustments. If you do this, you should also adjust the entry edit status of all transaction screens for this period to prevent entry of unauthorized transactions. Leaving this final period open lets you complete adjustments at any time.
One of the main differences between closing a regular accounting period and closing a fiscal year is that most companies adjust revenue to actual in the last period of the fiscal year. If you have been posting revenue at target rates with variances during the fiscal year, posting revenue at actual rates clears all variance accounts. All revenue is then calculated at actual rates and compared to actual expenses. The only exception is if you select Fixed in the Ceiling Method column on the Burden Cost Ceilings screen in Manage Project User Flow. This method uses a fixed rate regardless of the rate method used in closing.
This list of fiscal year-end procedures does not include any procedures for Costpoint add-on modules. Refer to the documentation for the individual add-ons for information on closing procedures for those modules.
As with any other accounting period of the year, you can continue to process transactions for the next fiscal year as you move through the closing process. The proper time to begin closing procedures for the fiscal year is after you have completed the steps for closing the final accounting period. (This topic assumes that you have already completed the accounting period closing procedures. See Closing the Accounting Period for information on the accounting period closing process.)
In addition to your regular period-end procedures, complete these steps before closing the fiscal year.
You should complete all reconciliations listed in Closing the Accounting Period. It is particularly important to reconcile the project ledger to the General Ledger (see steps 2 and 3 below). Otherwise, contract-to-date costs will not be correct on the project reports when project balances are rolled forward.
The Compare Project Ledger to General Ledger utility compares amounts in the GL_POST_SUM tables to those in the PROJ_SUM table. The Compute Burden Cost process updates the project ledger with amounts from the general ledger. If post amounts to the general ledger after you run the Compute Burden Cost process, the PROJ_SUM table will not contain the new data unless you run the Compute Burden Cost process again. The PROJ_SUM table determines what is rolled forward to the new year during the fiscal year closing process. The PROJ_SUM table amounts must be correct when the roll-forward occurs. This Compare Project Ledger to General Ledger utility can help account for differences.
The View Invalid Pools in Project Ledger screen compares the ALLOC_APPLIC table to the PROJ_BURD_SUM table. The ALLOC_APPLIC table contains a map of the current pool structure. This utility reviews that structure and determines if any amounts are improperly burdened in the PROJ_BURD_SUM table. Because the PROJ_BURD_SUM table is rolled forward to the next fiscal year and becomes the basis for contract-to-date information, the PROJ_BURD_SUM table amounts must be correct when the roll-forward occurs. If this utility identifies a problem, run the Repair Invalid Pools in Project Ledger utility to correct the problem.
Perform a complete backup of the database and the applications before you roll any of the balances forward. Keep this backup until you are sure that the roll-forward process was successful.
Print a Trial Balance report, so you can compare the ending balances this year to the beginning balances of the new year after you roll balances forward.
Print any General Ledger Detail reports for which you need printed copies for your files. Although you can run these reports at any time, it is recommended that you run a preliminary report before you roll balances forward.
Use the Update General Ledger Beginning Balances process to roll the balances forward based on the account type of the accounts. For each account with an account type of Asset, Liability, or Stockholders' Equity, the process rolls its balance forward as the beginning balance for the next fiscal year. If you have multiple companies set up in your Costpoint database, run the Update General Ledger Beginning Balances process separately for each company.
Print a Trial Balance report for the first period of the new fiscal year and compare that report to the Trial Balance you printed in step 5 to make sure that your roll-forward has gone as planned. Do this immediately after you roll the balances forward, so that you can make corrections and repeat the process, if necessary, before continuing with the closing process. You may want to consider also running a balance sheet for comparison with the previous year's balance sheet.
If you use a Current Year Retained Earnings account, zero out the beginning balance for that account and add that amount to the balance of the Prior Year Retained Earnings account. Use the Manage Non-Project Beginning Balances screen to update these balances. This step enables you to show the correct income or loss for the new fiscal year on the Current Year Retained Earnings line on financial statements.
If you have more than one company set up in the Costpoint database, make all retained earnings updates in Company 1.
Each row in the project ledger has an account function code that indicates how to treat that cost. The Assign Account Function Codes utility ensures that each row in the project ledger has an account function code and that the code is correct. If the account function code is not correct, the project balances will not roll forward properly.
Run the Update Project Prior Year History process. This process inserts information from the PROJ_SUM and PROJ_BURD_SUM tables into the PSR_PY_SUM and PSR_PY_BURD_SUM tables. These costs then form the basis for the contract-to-date costs. If you completed all of the preceding steps, the balances that come forward should be correct.
Run the Update Project Status Report Table process and the Update Other Project Report Tables process after the year-end closing to create a reference. You will use these figures in step 13.
Compare the "contract-to-date" columns on the Project Status Reports and Revenue Summaries that you generated at the end of the prior fiscal year to the "prior year" columns on the current year's Project Status Reports and Revenue Summaries. If the amounts are different, try running the Assign Account Function Codes utility again (step 10) to make sure that all accounts have codes. If you do that, you must also repeat step 11 to roll the project balances forward again.
Perform the following procedures before you begin processing in the new fiscal year:
Complete these tasks before doing any processing in the new year. (If you have entered this information, you can skip this step.) Make sure that the entry edit status for your transaction screens is set to Open so that you can begin entering transactions.
Update the Allocation Group Number field to 1 on the Manage Allocation Groups screen to reflect pool structure changes in order to calculate indirect rates in the new fiscal year. You must perform this step before you can clone your pools.
Clone all cost pools so that you can calculate indirect rates in the new fiscal year. Keep in mind that you should clone the first screen of the cost pool (the Manage Cost Pools screen) and use the Save/Continue option on the File menu to clone the subtasks. If you do not do this, the result is partially cloned pools. However, you should generally not clone the Pool Rates subtask because rates are usually different between fiscal years. You will set up your pool rates in the next step. See Manage Cost Pools for more detailed information on cloning pools.
You should not have cloned this subtask (on the Manage Cost Pools screen) in the previous step because rates typically change for a new year. For the new cost pools that you created in step 3, enter the target and provisional rates for the new fiscal year.
If you incurred costs in a prior year that you need to bill in the current year, Costpoint applies the correct provisional rates based on the year in which you incurred the costs. If you want to bill these costs on the same invoice, they will be properly burdened. You may, however, want to bill them separately so that it is easy to determine the rates that were applied. Retroactive billings for rate revision purposes are available in Costpoint Billing.
Clone your burden ceilings and overrides on the Burden Cost Ceilings screen in Manage Project User Flow. Because these records are tied to a specific fiscal year, you need to set up a new fiscal year for each project, as necessary, and add the new fiscal year's ceiling and override data.
Check your billing formats on the Manage Generic Billing Formats screen to see if you listed any fiscal years in the Accounts subtask. If you did, add new lines with the new fiscal year. You can leave the Fiscal Year column in this subtask blank to include all fiscal years. If you did, you can skip this step.
If you use budgets, enter new budgets and choose a new default budget revision so you can include budget information on project reports.
If you want to make structural changes to system setup, the timing of those changes can be crucial. For example, if you want to change project account groups, owning organizations for projects, revenue levels or formulas, or organization structures, do not make those changes until after you compute the final revenue for the fiscal year being closed. Making changes at the wrong time could result in incorrect calculations in the current fiscal year.
There are many other considerations when you make these types of critical structural changes. Always discuss them with Deltek Customer Care before proceeding with them.