Openbravo QuickStart 2User Manual

Chapter 4 – Period End Closeto Financial Report

v2.0.1

Permission is granted by Openbravo, S.L.U. to Openbravo Business Partners to modify (including adapt, translateand/or extend) and reproduce this work for internal purposes, and reproduce and distribute the original or adaptedwork to their clients having an active subscription to the Openbravo Professional Edition, provided such clients areunder obligations of confidentiality towards the Openbravo Business Partner and may not redistribute the work to

third parties. All other rights are reserved.

Introduction ....................................................................................... 1Abstract Business Process .................................................................. 2Roles Involved .................................................................................... 2Configuration ...................................................................................... 2

Fiscal Calendar and Periods.................................................................. 2Step by Step ....................................................................................... 4

Open Period....................................................................................... 4Create Automatic Accounting Entries ..................................................... 5

Manual Posting ................................................................................ 5Batch Posting .................................................................................. 6Background Posting Process .............................................................. 7

Correct Existing Transactions ............................................................... 7An Example .................................................................................... 8

Manual GL Journals............................................................................. 8Operations that Should not be Done using the GL Journal.....................11

Print Preliminary Report .....................................................................12Balance Sheet and P&L Structure ......................................................12Trial Balance Report ........................................................................13General Ledger Report.....................................................................15General Ledger Journal....................................................................17Not Posted Documents ....................................................................18

Close Period......................................................................................19Close Permanently.............................................................................19Print Final Reports .............................................................................20Fiscal Year End Process ......................................................................20

Introduction

This workflow manages the life-cycle of an accounting period, from the moment the financestaff opens it to the moment they close it and finally permanently close it.

Abstract Business Process

The abstract Period end Close to Financial Report business process is defined by thefollowing diagram:

Roles Involved

The following roles are involved in order to complete this process:• Finance - in charge of auditing and supervising accounting entries and consolidated

reports

Configuration

Before posts to the general ledger can be made the fiscal year and the accounting periodswithin need to be configured.

Fiscal Calendar and Periods

To see the existing fiscal years already created navigate to the Financial Management ||Accounting || Setup || Fiscal Calendar window, [Year] tab:

To create a new one, click the new record icon inside the toolbar and enter the year into theFiscal Year field:

Now, the periods for the newly created year must be created. Using the Create Periodsbutton the system will automatically create one period per month into the [Period]:

If different periods are required the Create Periods process can always be skipped and theperiods created manually one by one within the [Period]. The user can also edit them orcreate new ones, for example Dec A from 1st to 15th and Dec B from 16th to 31st.

Step by Step

Open Period

A period must be opened before any document with its accounting date falling into thatperiod can be posted to the general ledger. The application does not allow the user to post adocument within a period that does not exist or is not opened.

Opening and closing periods is done using the Financial Management || Accounting ||Transactions || Open/Close Period Control window.

Each time the user wants to open or close a period or a group of periods it has to create anew record in this window and specify the action (open or close) desired. This way, it's easyto track who opened or closed a particular period and when it happened.

To open a period, create a new record within the window mentioned:

Fields to note:• Year - fiscal year for which the action will take place• Until Period No. - the last period until which this action is going to be effective to.

For example, to open periods from January to March, choose March in the UntilPeriod No. dropdown.

• Period Action - three options are available:◦ Close Period: closes the periods which can still be opened afterwards◦ Open period: opens a period. Note: after a specific fiscal year has been

created, all periods within it are closed by default and must be openedexplicitely.

◦ Permanently Close Period: closes the period so it cannot ever be reopened.

Note: Periods can be opened and closed as many times as required until the PermanentlyClose Period action is taken.

If you try to post a document (such as a sales invoice) to a period that does not exist or isnot opened, the following message is thrown:

Create Automatic Accounting Entries

There are three different ways of posting documents that have accounting consequences.

Manual Posting

If the background accounting is not configured and turned on, the user must manually postindividual documents upon completion using the Post button:

The general ledger posting generated is then shown as a result of clicking the button:

Once a document has been posted, the Post button will change into Unpost. Clicking itpresents us two options

• Checking off the Delete accounting entry box and clicking OK will unpost thedocument and delete the accounting entry.

• Leaving the Delete accounting entry box empty and clicking OK will take us tothe report that only displays the actual general ledger posting in order to see it:

Batch Posting

To batch post all unposted documents, the Financial Management || Accounting ||Transactions || GL Posting by DB tables window is used.

Imagine there are 10 invoices (sales or purchase) completed but not posted and the userwants to post them at the same time. Using the window mentioned above, enter the filtersavailable or leave them blank to consider all unposted documents:

Click OK to post the matching document to the general ledger and showing the resultingmessage:

The individual document types that can be batch posted are:• Invoices• Amortizations• GL Journals• Financial Account Transactions

• Financial Account Reconciliations• Payments

Note: If the automatic background posting process is activated, executing the batch postingwill show the user an error message saying that the batch posting cannot be used whilebackground accounting process is enabled.

Background Posting Process

There is a possibility to have an automatic background process posting every completeddocument that has accounting effect. This way, the user will not need to post documentsmanually, as it will be done by the application automatically and as such transparent to theuser.

If this is required and not configured yet, please ask your Openbravo consultant to do so.

Correct Existing Transactions

Once a document is posted, it is not possible to edit the document directly The stepsrequired are:

• Un-post the document• Re-activate the document• Change required information• Complete the document back• Post the document again

To unpost a document, open its header and click the Unpost button:

Check the Delete accounting entry box and click OK:

The system will display a message with the number of journal posts deleted:

An Example

Suppose there is a line of an invoice that contains a product expense that has been postedto the 60000 account but the user realizes the posting should actually have been made tothe 62800 account.

Once the invoice has been unposted (see previous section) go to the Master DataManagement || Product window, [Accounting] tab. Change the actual 60000 expenseaccount to the 62800.

Save the record. Go back to the invoice and post it. The result will be the following:

The correct posting has been made this time.

Note: If more than just the expense account of a product should have been changed (likeproduct amounts, quantities, or terms and conditions) then the document also needs to bereactivated and then completed back before it is reposted.

Manual GL Journals

There are some general ledger postings that are not a result of a document within theapplication. Some examples are:

• write offs• period adjustment postings• reclassification of postings due to auditing issues or other reasons• etc.

The application allows the user to create a document that generates these postings. Toenter them use the Financial Management || Accounting || Transactions || G/LJournal window. An example of a G/L Journal we will use in this example is the following:

In order to be able to group several postings together, the [Batch] tab is used. There,create a new record:

Fields to note:• Description - brief note describing the cause of this document• Document Date - the date when this document is created• Accounting Date - not used here• Currency - not used here• Period - not used here• Template - check this if the document will be used as a template for similar posts

in the future• [Header] - the tab where further info of the document will be entered such as

accounting dates, amounts, currencies, etc.

Save the record and switch to [Header] tab to create a new record:

Fields to note:• Description - brief note describing the cause of this document• Document Date - the date when this document is created• Accounting Date - date used to define the fiscal period the resulting posting will

belong to• Currency - currency of the document• Period - Accounting period of the GL Journal used for this posting. The period must

be opened in order to post to it• Opening - use this check to mark the posting as an opening one. This is used to

create the initial journal.• [Lines] - lines where specific accounts and the amounts of the journal are added

Save the record and switch to [Lines] to enter the lines of this journal. This example usestwo separate lines:

Fields to note:• Accounting Combination - an account combination from the chart of accounts• Description - additional notes related to this posting• Currency - currency of the line that inherits its default value from the [Header]• Foreign Currency Debit - the debit amount in the currency selected above• Foreign Currency Credit - the credit amount in the currency selected above

As the resulting posting of this document should be:

...then the first line entered must be:

...and the second one:

Once both lines are correctly entered and saved, go back to [Header] and Process andPost the G/L Journal. See the Create Automatic Accounting Entries section of thisdocument to see how the final posting is done:

Operations that Should not be Done using the GL Journal

The following scenarios should not result in the of a GL Journal document:1. GL Journal for Cash Movements (Bank or Cash)

All transactions related to cash movements must be registered using the BankStatement or Cash Journal document. If a bank movement related posting needsto be done, a payment needs to be created first and then reconciled using a bankstatement.

In order to create payments that do not originate from documents inside thesystem, see the following guide:http://wiki.openbravo.com/wiki/ERP/2.50/Configuration_Manual/Setting_up_accounting#Creating_pending_payments_.28receivables.2C_payables.29

2. Debt Transfer from one Business Partner to AnotherTransferring debt from one business partner to another should not be done usingthis document since the original payment would remain pending. Instead, theSettlement document must be used, settling the old payment and creating a newone to the new business partner with the old amount.

Print Preliminary Report

Accounting reports can be found under the Financial Management || Accounting||Analysis Tools menu node:

1. Balance Sheet and P&L Structure2. Trial Balance Report3. General ledger report4. General ledger journal5. Not posted documents

Balance Sheet and P&L Structure

This window is used to generate the following two reports:• Profit & Loss Statement• Balance Sheet

Use the Financial Management || Accounting || Analysis Tools || Balance Sheet andP&L Structure window to specify the parameters required:

Fields to note:• Accounting Report - choose P&L or Balance Sheet accordingly• Account Level - the level of depth within the chart of accounts that should be used

for displaying the report• Show only accounts with value - check this to show only accounts with amounts

different from zero

• Show Account codes - check this to show the account code before the accountname

• Year - Choose the year you wish to execute the report for◦ From & To date - time window inside the chosen year

• Reference year - choose the year to compare the results to in the report:◦ From & To Reference Date - time window inside the chosen comparison

year

Once the desired parameters are entered click the PDF Format button to generate it:

Trial Balance Report

This report displays exact amounts for each of the accounts. To generate it, use theFinancial Management || Accounting || Analysis Tools || Trial Balance Reportwindow:

Fields to note:• From & To Date - limit transactions included inside a time frame.• Account Level - the level of depth within the chart of accounts to display.• From Account & To Account - narrow down the range of accounts to be displayed.

There is the possibility to choose one or several business partner(s), product(s) andProject(s) in order to filter down the transactions included:

• Business partner - Choose the number of business partners desired to filter theincluded transactions by.

• Product - Choose the number of products desired to filter the included transactionsby.

• Project - Choose the number of projects desired to filter the included transactionsby.

• Group By - Dimension (Business Partner, Product or Project) you want to group theresults by.

To generate the report, click the Search button:

Clicking the blue link showing each account's number will take you to the General LedgerReport and show you the specific postings related to that account. See the next section formore information on this report.

This report can also be seen as a PDF or EXCEL format. Use the toolbar buttons to do so.

General Ledger Report

This report shows the transaction details for the accounts within a desired period of time. Toexecute it go to Financial Management || Accounting || Analysis Tools || GeneralLedger Report window:

Fields to note:• From & To Date - select the time frame to include• Hide Matched Debt/Payments - check this to avoid showing the information of

already matched payments movements. Useful to see only pending payables inbusiness partners accounts.

• From & To Account - select the range of accounts to display

There is the possibility to choose one or several business partner(s), product(s) andProject(s) in order to filter down the transactions included:

• Business partner - Choose the number of business partners desired to filter theincluded transactions by.

• Product - Choose the number of products desired to filter the included transactionsby.

• Project - Choose the number of projects desired to filter the included transactionsby.

• Group By - Dimension (Business Partner, Product or Project) you want to group theresults by.

Click the Search button in order to generate the report:

This report can also be seen as a PDF or EXCEL format. Use the toolbar buttons to do so.

Clicking the blue link containing the date of the transaction the system will take you to theGeneral Ledger Journal report showing the complete general ledger posting.

General Ledger Journal

This report shows complete GL postings that result from a document within the application.To execute the report go to Financial Management || Accounting || Analysis Tools ||General Ledger Journal:

Fields to note:• From & To Date - select a date range of postings to be displayed• Show Closing - check this to show period/year closing entries• Show Regularization - check this to show the period/year regularization journal

entries• Show Opening - check this to show the period/year opening journal entries

Click the HTML Format button to display the journal postings that fit the criteria entered:

This report can also be executed and exported to .pdf and .xls formats. Use the toolbar forthat.

Clicking in the blue link at the top left side of each journal, the system will navigate the userto the document that generated the journal entry (invoice, bank statement, settlement...) .In other words, it will give the user the ability to show the information of the document thatgenerated this posting.

Not Posted Documents

This report lists all documents that are completed but not yet posted to the general ledger.It is a useful report most commonly used to make sure there are no unposted documentsbefore closing a period or executing other financial reports.

To generate it go to Financial Management || Accounting || Analysis Tools || NotTransaction Report:

Choose a date range to be included in the search and click the HTML Format button.Results are grouped by document type.

Close Period

Please refer to the Open Period section of this chapter to learn how to close a period sincethe process is analogous. Instead of the Open Period Action Type, select the Close Periodone.

Note: No documents with the Accounting Date that falls into the closed period can beposted.

Close Permanently

Please refer to the Open Period section of this chapter to learn how to permanently close aperiod since the process is analogous. Instead of the Open Period Action Type, select thePermanently Close Period one.

Note: No documents with the Accounting Date that falls into the permanently closedperiod can ever be posted again.

Print Final Reports

Please refer to the Print Preliminary Reports section of this chapter to learn how to usethe financial reports. Generating preliminary and final reports process is the same.

Fiscal Year End Process

Executing this process will make the system:• Create the regularization journal entry• Create the year closing journal entry• Create the new year opening journal entry

To execute this process go to Financial Management || Accounting || Setup || FiscalCalendar window and switch to [Year] tab:

Choose the year you need to close, and click the Create Reg Fact Acct button. This willautomatically trigger the following actions:

• Creating the regularization journal for the closing year• Creating the year closing journal for the closing year• Creating the new year opening journal for the opening year

Note: Once this process has been executed, no document can be posted to the closed year.However, this closing process can be undone by clicking the button Drop Reg Fact Acct.