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D365 Month end and year end process


Period Closing
  1. Accounts Payable

a.         Post invoices for all open/received purchase orders.

b.         Post all pending invoices if received from Vendor.

c.         Post and settle all payments.

d.         Run Currency revaluation

e.         Reconcile Vendor balance and trial balance for control accounts.

f.          Set fiscal period on-hold for Vendor.

  1. Accounts Receivable

a.         Post invoices for all open/delivered sales orders.

b.         Post all pending free text invoices.

c.         Post and settle all received payments.

d.         Run Currency revaluation

e.         Reconcile Vendor balance and trial balance for control accounts.

f.          Set fiscal period on-hold for Customer.

  1. Cash and Bank

a.         Perform Bank reconciliation

b.         Set fiscal period on-hold for Bank.

  1. Procurement / Sales

a.         Review and Close all open purchase/sales orders/Requisition if require.

b.         Perform sort closing of purchase/sales orders if require.

c.         Set fiscal period on-hold for purchase/sales.

  1. Production Control

a.         Post picking list and Route for the current month production.

b.         Post RAF

c.         Post End production for current month

d.         Set fiscal period on-hold for Production.

  1. Fixed asset

a.         Post all acquisitions or adjustments (From inventory, project etc…) if require.

b.         Post all sales/scrap of assets.

c.         Run depreciation for the month.

d.         Reconcile fixed asset balance and trial balance for control accounts.

e.         Set fiscal period on-hold for fixed asset.

  1. Inventory Management

a.         Make sure all physical inventory is posted as financial (Delivered/Received/RAF)

b.         Post all require inventory adjustment journals.

c.         Post inventory counting

d.         Perform inventory adjustments if require.

e.         Run inventory recalculation.

f.          Run Inventory closing

g.         Reconcile Inventory to trial balance.

h.         Set fiscal period on-hold for Inventory.

  1. Tax

a.         Post adjustments if require.

b.         Generate require statutory reports as per localization.

c.         Reconcile Tax transactions with Trial balance/Vendor invoices/Customer invoices.

d.         Perform Tax settlements using Declaration process (Both Direct and Indirect Tax)

e.         Reconcile Tax transactions with Trail balance after declaration.

f.          Set fiscal period on-hold for Tax.

  1. General Ledger

a.         Post all adjustments in ledger.

b.         Post all provisions if require.

c.         Post all allocations.

d.         Post all Accruals if require.

e.         Generate all financial reports.

f.          Set fiscal period o-hold for Ledger.

  1. Consolidation

a.         Post all eliminations.

b.         Run fiscal period consolidation.

c.         Generate consolidated financial statements.

 

Fiscal Year Closing

  1. General ledger parameters setup
  2. Define Retained earning Main account.
  3. Validate Main account type for all Main accounts.
  4. Run fiscal year close.

 

 Define all your closing roles and related personnel that participate in closing process:

This process defines all the business functions and people in each of those functions that are required to be actively participating in your year-end closing.


       


 


Define the task areas and templates with Due date and time for users to work on:

Task areas and templates define the business function. You can define each of the business functions that are involved in the closing activities. 



 Templates associate the business function, with each of the individual tasks that are to be performed as part of the year end activities. This also determines the roles that are to be associated, the Due date when the activity would have to be completed and provides the navigation link (Task Link) that can take the user directly into to perform the required activity. You can define the dependencies on each of these tasks. For example, Custom Aging is dependent on Payment journals being posted, that can be marked as a dependency as posting of Customer Payment journals gives an accurate picture of the outstanding AR.





 


Define Calendars and Closing schedule for closing:

Calendars define the working days that can be utilized for scheduling the closing tasks.  



 Closing schedules bring all the key aspects (Templates, Calendars, Legal Entities etc.,) together to build and propose a logical sequence of steps that are to be completed in the Financial close workspace.



 Once all these steps are followed, a logical pictorial depiction of the status of the closure can be viewed Financial Period Close workspace for each Legal entity.





 Besides these, the year-end process can also be executed across legal entities, for example, grouping by region. This helps by allowing an Accounting Manager to execute closing by being in one Legal entity and across all the regions without having to execute for individual Legal entity separately. 



 By using the tips and some of the features provided here, you can effectively manage the Year end closing in Dynamics 365 Finance and Operations with confidence and in a disciplined way.

 Once those are configured, go to General ledger> Posting setup> Accounts for automatic transactions



Accounts for Automated Transactions – For Profit Transfer

This is require as system has to identify the account for transfer of all profit and loss account’s balance.

Check to make sure you have a fiscal calendar created for the following year (2021). If not create before further process. As we need opening balance in next year (2021).

There are certain other process also but I am not going to explain in this blog, such as “Closing Period Adjustments”



Other Closing Process

Now that we are all setup, let’s go to General ledger> Period close> Year end close



Group – Year end close

As you can seen in this screen, you can create multiple groups based on Financial Calendars. In this case I have created Group for US based companies which follows same Financial Year (Jan-Dec). In one group you can add multiple legal entities and you can define Transfer of Balance sheet combination for each legal entity.

Transfer of Dimension:

if you want to transfer balance sheet dimensions or not by toggling the switch.  This is optional, but it is considered best practice to have switched to Yes.  Also, determine which dimensions for profit and loss accounts you would like to transfer.  The Close all option will close all dimensions used for that main account and dimensions.  So, if there were multiple transactions to the same main account, but to different business units, this option would create opening balances for each main account – business unit segment.  If you choose Close one then you must select the financial dimension to close to.  The financial dimension you close to will take all the transactions from the main account – business unit segment.



Year end process

Now you can “Run fiscal close” and select Single or Multiple Legal entity from selected group.



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