powerpoint presentation · • confirm open accounts payable ties to the trial balance and the...

CP-18:A Checklist Approach to Financial Statements

Linda Runyeon, Redhorse Corporation

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Agenda

• This session will cover a checklist approach to

the 5 steps in the monthly close

• Target audience is small to medium sized

organizations that have recently moved from to

Costpoint and are looking for a step by step

approach to month end close

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5 Step Process:

Subledger Close

Billing

Service Centers & Pools

Revenue

Financial Statements

1

2

3

4

5A checklist

summarizing

all the steps is

included at

the end to the

package

01 Subledger Close

5

Subledger Close

Complete subledger

processing

Update fixed price

contracts percentage of

completion calculations

Post journal entries

(all types)

Reconciliations

Freeze the general

ledger

Run a test close

Perform any remaining

subledger reconciliations and

create general ledger tables

and run prelim trial balance

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34

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7

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• Post all vouchers that impact the current period

• Freeze the Accounts Payable subledger (Accounting/General Ledger/Company Calendar/Manage Accounting Periods, then Accounting/General Ledger/Company Calendar/Manage Subperiods )

• Change the Journal Entry Status of the Accounts Payable code to "Not Available"

• Don’t forget to update both the Accounting Period and Subperiod screens

Subledger Processing:

Accounts Payable

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Subledger Processing: Timesheets• Bring in all timesheets for the current accounting period

from Deltek T&E (or other timekeeping system)

• Confirm accrued salaries account balance matches labor distributions for any timesheets that were paid in a subsequent period

• In this example, the employees are paid every two weeks and the pay date lags a week behind the payroll period end date

– March 24 was the last pay date in Period 3, and covered the payroll period March 4 to 17

– April 7 was the next pay date, it was in Period 4 and covered the payroll period March 18 to 31

– Accrued salaries account balance at the end of period 3 should equal the labor distribution totals for March 18-31

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• Compute and post leave for each payroll period that had a pay date within the period (People/Leave/Leave Processing/)

– Manage Leave Periods (to open/confirm the pay period you are processing)

– Compute Leave Accruals

– Print Leave Edit Report (and review for accuracy)

– Manage Leave Edit Table (if need to adjust leave for payouts or other reasons)

– Post Leave Accruals

– Print preliminary Leave Accrual Report (and review against offline reporting systems as needed for accuracy)


Leave

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• Reconcile leave balances (People/Leave/Leave Utilities/Reconcile Leave Balances)

─ Corrects general ledger leave accrual for pay rate changes

─ Transfer balances for home organization and leave account changes

─ Also corrects for the impact of total time accounting for exempt employees

─ Print final leave accrual report and reconcile to offline systems as needed

─ Pay rate change example

• John Doe, an exempt employee makes $40 per hour, $1600 per week, he has 10 hours or $400 ($40 X 10 hours) of accrued leave on the books. He gets a pay raise to $44 per hour, and then uses all the leave he accrues until he leaves the company.

• Leave payout when he leaves the company would be $440 ($44 X 10 hours)

• Reconcile leave balances will update the general ledger leave accrual liability to add the additional $40 cost for pay rate changes, (note there is no change in the hours)

Subledger Processing: Leave (cont.)

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• Voucher distribution (AP), labor distribution,

leave

• Cash receipts, cash disbursements

• Other

• This completes the subledger processing actions


Confirm All Entries Are In

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• Updated calculations will be needed to book

revenue. Can do the calculations based on prior

period cost to keep on schedule, (except at year

end). Are often done quarterly unless there is a

significant interim change.

• This completes the update fixed price contract

percentage of completion calculation actions

Update FFP Percentage of

Completion

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• Depreciation

• Prepaids

• Accruals (over threshold)

– Leave, payroll related expenses & taxes

– Direct costs (materials, subs, travel, other direct costs)

– Indirect costs (rents, travel, recurring expenses, other)

– Warranty expense

• Other entries specific to your business

• This completes the post journal entries actions

Post Journal Entries (All Types)

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• May need to reopen subledgers and make corrections if omissions or errors are

found

– Some need to be done before the current period is closed as corrections are

difficult to do in subsequent periods

– Some may be done on a period lag to shorten the close cycle

• Examples of common reconciliations, (some may be to offline tools):

– Bank reconciliation (if using the Costpoint bank reconciliation module should

be done before the period close)

– Fixed Assets and Accumulated Depreciation

– Prepaid Expenses

– Company Paid Travel

– Notes Payable

– Other

• This completes the reconciliations actions

Reconciliations

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• Once posting is done, freeze the general ledger (Accounting/ General Ledger/Company Calendar/Manage Accounting Periods, then Accounting/ General Ledger/Company Calendar/Manage Subperiods)

• Go in to Manage Period and Manage Subperiods screens change the journal entry status section of the various codes to "Not Available“

• This completes the freeze GL actions

Freeze the

General Ledger

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• Run a test close (Accounting/General Ledger/ Company Calendar/Close Period)

– Be sure and select Test under Close Options

– There should be no pop-up messages

– Expect revenue and allocations to be open at this point

• If errors, need to troubleshoot

• This completes the test close actions

Run Test Close

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• Labor History to General Ledger reconciliation is an automated report (Accounting/General Ledger/General Ledger Utilities/Print Labor History to General Ledger Comparison Report)

Vendor labor may appear on this report if you are using vendor labor hours in AP, (no action required)

Accrued Leave is not an issue if it appears on this report

• Confirm Open Accounts Payable ties to the trial balance and the balance sheet (Accounting/Accounts Payable/Accounts Payable Reports/Inquiries/Print Open Accounts Payable Report)

Check report parameters if your balances do not tie, otherwise check for invoice dates and check dates that occur after the end of the current accounting period

• Confirm Accounts Receivable Aging Report ties to the trial balance and the balance sheet (Accounting/Accounts Receivable/Accounts Receivable Reports/Inquiries/Print Accounts Receivable Aging Report

Check report parameters if your balances do not tie, otherwise check for invoice dates and check dates outside of the current accounting period

Perform Remaining Reconciliations

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• Run Create General Ledger

Tables to update the

financial reports

(Accounting/General

Ledger/General Ledger

Reports/Inquiries/Create

General Ledger Report

Tables)

Create General

Ledger Tables

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• Print prelim trial balance to

ensure that it is balanced and

no variances are reported at the

bottom (Accounting/General


Reports/Inquiries/Print Trial

Balance Report)

• This completes the final action

in the Subledger Close Step,

perform any remaining

subledger reconciliations,

create general ledger tables

and run prelim trial balance

Prelim Trial Balance

02 Billing

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• This timeline allows you to complete billing as close to month end as possible, while you may still be entering final journal entries that could impact actual indirect rates

– Invoices using actual indirect rates would need to be prepared after the cost pools are finalized each period

• Load labor rates for revenue and billings (Projects/Cost and Revenue Processing/Revenue Processing/ Load Labor Rates)

Prepare Billing

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• Create first cut of a Preliminary

Project Status Report (PSR) to

support the billing

• Compute burden costs to get

rates in the Preliminary Project

Status Report (Projects/Cost

and Revenue

Processing/Project Cost

Processing/Compute Burden

Costs)

– Note actual indirect rates

are not finalized at this point

Prelim PSR

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• If you use the Costpoint Purchasing module and want commitments to appear on the PSR’s, compute and print commitments (Projects/Project Inquiry and Reporting/Report Processing/Compute/Print Purchasing Commitments)

• Update Project Status Report tables (Projects/Project Inquiry and Reporting/Report Processing/Update Project Status Report Tables)

• Update other project reporting tables (Projects/Project Inquiry and Reporting/Report Processing/Create Project Report Tables)

Prelim PSR (cont.)

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• Print Project Status Report

(Projects/Project Inquiry and

Reporting/Project

Reports/Inquiries/Print Project

Status Report)

Prelim PSR (cont.)

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• Review the preliminary Project Status Report to confirm non-labor cost support for T&M billings

• Reconcile T&M billings to the printed Project Status Report and labor hour cumulative amounts as needed

• For projects where revenue method is equal to billings, billings must be posted to GL before revenue is run

• Bills at actual indirect rates would need to prepared after cost pool rates are run below

• This completes the final action in the Billing Step

Process and Post Billings

03 Service Centers & Pools

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Service Centers and Pools

Service center (SC)

allocation & perform

pool maintenance

Calculate pool rates

Create second prelim PSR and

balance to general ledger to prove all

cost is in before revenue recognition

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3

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• Enter allocation journals for service centers that are based on manual inputs, (service centers bases that are not labor dollars or labor hours) (Projects/Cost and Revenue Processing/Cost Pool Processing/Manage Allocation Journals)

– Can save some time by importing the manual entry from the previous month, can also import from Excel

– Once posted allocations disappear from Manage Allocation Journal screen

SC Allocation & Pool Maint:

Service Centers

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• Run create pool links to update the pool costs and bases with any new accounts, orgs and account/org links (Projects/Cost and Revenue Processing/Cost Pools/Create Pool Links)

– Be sure to include Pool Cost Accounts and Pool Base Accounts

• Then run build rate application table (Projects/Cost and Revenue Processing/Cost Pool Processing/Build Rate Application Table)

• This completes the SC allocation and pool maintenance actions

SC Allocation & Pool Maint:

Pool Maintenance

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• Compute pool rates (Projects/Cost and Revenue Processing/Cost Pool Processing/Compute/Print Pool Rates)

• Print Statement of Indirect Expenses (SIE)

– Same screen, select the Print icon to print the report

– If you want a summary report with all the organizations rolled up enter 1 for Organizational Level, enter 0 in this field for a detailed report

Calculate Pool Rates

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• Confirm accounts/orgs are in the correct cost pools and bases

• Reconcile the amounts to the general ledger to be sure all costs are in the correct pools/bases

• May be helpful to keep a list of new accounts and account/org links created each period to confirm they are in the correct pool/base

• If account or orgs are added in the general ledger and not the pool structure the SIE can be missing costs

• If cost is missing from a pool base confirm the debit allocation account is linked to the org for the missing cost

• If an account/org combination is missing from a cost pool check to see if it is not already used in another pool, (if it already exists in another pool you will need to delete it from the erroneous pool first, then update the Pool Cost wildcard setup to remove form the incorrect pool)

• Confirm rates are tracking with plan/target rates, (if not, you may need to review, enter accruals and recompute the rates)

Calculate Pool Rates (cont.): Review SIE

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• Note information for service centers with manual bases does not print on the SIE so if you have those types of service centers you should also Print Service Center Cost Allocation report (Projects/Cost and Revenue Processing/Cost Pool Processing/Print Service Center Allocation Report)

• Compute pool rates can be run multiple times as long as it is not posted

• If calculating revenue on target rates, and not actual rates, calculate pool rates can be done after calculating and reviewing revenue

• Post pool journals (Projects/Cost and Revenue Processing/Cost Pool Processing/Post Pool Journals)

• Can reverse pool and revenue journals if needed to clean up entries and start fresh but note this will also reverse service center entries that are manual, manual service center allocation units will need to be reentered

• If you post pools more than once manual service center allocation units also must be reentered (or they will zero out and reverse the previous entry in the second posting)

• This completes the Calculate Pool Rates actions

Calculate Pool Rates (cont.)

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To create the second prelim PSR, that includes updated burdens, follow the same steps outlined in the Prelim PSR slides above

Compare Project Status Report at organizational level 1 and below to general ledger and resolve any issues

This completes the final action in the Service Centers and Pools Step, create second prelim PSR to prove all cost is in before revenue recognition

PSR balanced to General Ledger

04 Revenue

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Revenue

Book Revenue

Create final PSRs that

include revenue as well as

cost and balance to GL

Review Unbilled

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3

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• Go to the project set up (Projects/Project Setup/Project Master/Manage Project User Flow/Basic Info and Revenue Info screens) and check for revenue adjustments

• Confirm fee rates (losses) tie to the percentage of completion calculations done previously on FFP work

• After reviewing revenue by project you may need to make a change to the project setup, such as adding more funding or adding a bill rate for a labor category. If so then repeat the book revenue steps above before posting

Book Revenue

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• Compute revenue (Projects/Cost and Revenue Processing/Revenue Processing/Compute Revenue)

• Run Revenue Summary Report and confirm fee rates (losses) in RSR look reasonable (Projects/Project Inquiry and Reporting/Project Reports/Inquiries/Print Revenue Summary Report)

• Can setup different parameters for different users of the RSR (and other) reports

Book Revenue (cont.)

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• If you want more detail on how the system

computed revenue for a project you can print a

Revenue Worksheet (Projects/Project Inquiry

and Reporting/Project Reports/Inquiries/Print

Revenue Worksheet)

• Once the review is complete, post revenue

(Projects/Project Cost and Revenue

Processing/Revenue Processing/Post Revenue)

Book Revenue (cont.)

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• Create final PSR to include

revenue (as well as cost)

follow the same steps

outlined in the Prelim PSR

slides above

• Confirm PSR revenue at org

level 1 ties to the general

ledger

Create Final PSR

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• Update unbilled tables (Projects/Billing/Unbilled Receivables/Create Unbilled Analysis Report Tables)

• Print unbilled receivable analysis (Projects/Billing/Unbilled Receivables /Print Unbilled Analysis Report)

• Reconcile unbilled balance to general ledger

• Update unbilled comments as needed

• This completes the final Revenue action

Book Revenue (cont.):

Review Unbilled

05 Financial Statements

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• First step is to create the general ledger report tables (Accounting/General Ledger/General Ledger Reports/Inquiries/Create General Ledger Report Tables)

• Must be done once a year for entire year, (not just a period) and when adding new accounts, orgs or account org links

• If have trouble reconciling the financial statements to the trial balance try running this update, (especially when the Comparison Column options are selected on the financial statements)


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• Print final trial balance to

ensure that it is balanced and

no variances are reported at

the bottom

(Accounting/General


Reports/Inquiries/Print Trial

Balance Report)


(cont.)

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• Print and review financial statements (Accounting/General Ledger/General Ledger Reports/Inquiries/Print Financial Statements)

Save the different statement formats using parameters

Do a final verification that total income statement revenue ties to the Revenue Summary Report

Verify income statement costs tie to the Organization Cost Summary (Projects/Project Inquiry and Reporting/Project Reports/Inquiries/Print Organization Cost Summary Report)

Print a final Statement of Indirect Expenses and verify against the income statement

Confirm balance sheet total assets and total liabilities are in balance

Confirm the Unbilled Analysis Report “Unbilled Per G/L” total ties to the balance sheet

Reconcile other material balances on the financial statements as needed

Financial Statements (cont.)

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• Make any necessary adjustments

to correct problems found while

performing the above steps and

reprocess if necessary

• Print final financial statements

and any other supporting reports

before closing the period.

• Run a final test close and close

the period (Accounting/General

Ledger/Company Calendar/Close

Period)

• This completes the final Financial

Statement action


(cont.)

06 Checklist

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Checklist – 1 of 6Completed

1. Subledger Close

1. Complete subledger processing

Accounts Payable

Post current period vouchers

Freeze AP subledger period and subperiods

Timesheets

Bring in time and post labor distribution

Confirm accrued salaries account ties to unpaid labor distributions

Leave

Compute and post leave

Manage leave periods to open the pay period

Compute leave accruals

Print Leave Edit Report and make changes in Manage Leave Edit Table if needed

Post leave accruals

Print preliminary Leave Accrual Report and review against offline systems as needed

Reconcile leave balances (pay rate changes and total time impacts), print final Leave Accrual Report and review against offline systems as needed

Confirm all entries are in

Voucher distribution (AP), labor distribution, leave

Cash receipts, cash disbursements

Other

2. Update percentage of completion

Update fixed price contracts percentage of completion calculations as needed

Month End Close: A Checklist Approach to Financial Statements Page 1Completed

1. Subledger Close

1. Complete subledger processing

Accounts Payable

Post current period vouchers

Freeze AP subledger period and subperiods

Timesheets

Bring in time and post labor distribution

Confirm accrued salaries account ties to unpaid labor distributions

Leave

Compute and post leave

Manage leave periods to open the pay period

Compute leave accruals

Print Leave Edit Report and make changes in Manage Leave Edit Table if needed

Post leave accruals

Print preliminary Leave Accrual Report and review against offline systems as needed

Reconcile leave balances (pay rate changes and total time impacts), print final Leave Accrual Report and review against offline systems as needed

Confirm all entries are in

Voucher distribution (AP), labor distribution, leave

Cash receipts, cash disbursements

Other

2. Update percentage of completion

Update fixed price contracts percentage of completion calculations as needed

Month End Close: A Checklist Approach to Financial Statements Page 1

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1. Subledger Close

3. Post journal entries (all types)

Depreciation

Prepaids

Accruals (over threshold)

Leave, payroll related expenses & taxes

Direct costs (materials, subs, travel, other direct costs)

Indirect costs (rents, travel, recurring expenses, other)

Warranty expense

Other entries specific to your business

4. Reconciliations

Bank reconciliation (if using the Costpoint bank reconciliation module should be done before the period close)

Fixed Assets and Accumulated Depreciation

Prepaid Expenses

Company Paid Travel

Notes Payable

Other

5. Freeze the general ledger

Freeze the general ledger subledger codes for the period, and subperiods

6. Run a test close

Run a test close

7. Perform any remaining subledger reconciliations, create general ledger tables and run prelim trial balance

Confirm Labor History to General Ledger Comparison Report labor ties out to the general ledger

Confirm Open Accounts Payable report and AR Aging each tie to both the trial balance and the balance sheet

Create General Ledger Tables

Run final trial balance and confirm trial balance is in balance


1. Subledger Close

3. Post journal entries (all types)

Depreciation

Prepaids

Accruals (over threshold)

Leave, payroll related expenses & taxes

Direct costs (materials, subs, travel, other direct costs)

Indirect costs (rents, travel, recurring expenses, other)

Warranty expense

Other entries specific to your business

4. Reconciliations

Bank reconciliation (if using the Costpoint bank reconciliation module should be done before the period close)

Fixed Assets and Accumulated Depreciation

Prepaid Expenses

Company Paid Travel

Notes Payable

Other

5. Freeze the general ledger

Freeze the general ledger subledger codes for the period, and subperiods

6. Run a test close

Run a test close

7. Perform any remaining subledger reconciliations, create general ledger tables and run prelim trial balance

Confirm Labor History to General Ledger Comparison Report labor ties out to the general ledger

Confirm Open Accounts Payable report and AR Aging each tie to both the trial balance and the balance sheet

Create General Ledger Tables



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2. Billing

Load labor rates for revenue and billings

Create first cut of a Preliminary Project Status Report (PSR) to support the billing

Compute burden costs

Compute commitments

Update PSR report tables

Create project report tables

Print PSR

Prepare and post billings


2. Billing

Load labor rates for revenue and billings

Create first cut of a Preliminary Project Status Report (PSR) to support the billing


Compute commitments



Print PSR

Prepare and post billings


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Checklist – 4 of 63. Service Centers & Pools

1. Service center allocations and perform pool maintenance

Enter and post allocation journals for service centers that are based on manual inputs

Pool Maintenance

Create pool links

Build rate application table

2. Calculate pool rates

Compute pool rates

Print and review Statement of Indirect Expenses

Post pool journals

3. Create second prelim PSR and balance to GL prove all cost is in before revenue recognition

Create second prelim PSR


Compute commitments



Print PSR

Compare PSR at organizational level 1 and below to general ledger and resolve any issues

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4. Revenue

1. Book revenue

Review/update Revenue Info screens in Manage Project User Flow

Check for revenue adjustments

Confirm fee rates/losses tie to percentage of completion calculations for FFP work

Compute revenue

Run Revenue Summary Report and confirm fee rates are as expected on all contracts

Post Revenue

2. Create final PSRs that include revenue as well as cost and balance to GL


Compute commitments



Print PSR

Confirm PSR revenue at org level 1 ties to the general ledger

3. Review unbilled

Update unbilled tables

Print Unbilled Analysis Report

Confirm report total “Unbilled Per G/L” ties to general ledger

Update unbilled comments as needed


4. Revenue

1. Book revenue

Review/update Revenue Info screens in Manage Project User Flow

Check for revenue adjustments

Confirm fee rates/losses tie to percentage of completion calculations for FFP work

Compute revenue

Run Revenue Summary Report and confirm fee rates are as expected on all contracts

Post Revenue

2. Create final PSRs that include revenue as well as cost and balance to GL


Compute commitments



Print PSR

Confirm PSR revenue at org level 1 ties to the general ledger

3. Review unbilled

Update unbilled tables

Print Unbilled Analysis Report

Confirm report total “Unbilled Per G/L” ties to general ledger

Update unbilled comments as needed


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5. Financial Statements

Print financial statements

Update financial statement summary balances


Print and review financial statements

Verify total income statement revenue ties to the Revenue Summary Report

Verify income statement costs tie to the Organization Cost Summary





Make any necessary adjustments

Print any final reports

Run a final test close and close the period


5. Financial Statements

Print financial statements

Update financial statement summary balances


Print and review financial statements

Verify total income statement revenue ties to the Revenue Summary Report

Verify income statement costs tie to the Organization Cost Summary





Make any necessary adjustments

Print any final reports

Run a final test close and close the period


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5 Step Process:

Subledger Close

Billing

Service Centers & Pools

Revenue


1

2

3

4

5This session covered a 5 Step Process to monthly close and included a checklist summarizing the detail.

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Questions?

Thank you for attending!

– Linda Runyeon, Redhorse

Corporation

powerpoint presentation · • confirm open accounts payable ties to the trial balance and the...

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