southware training guide year end processing end processing 2016.pdfpayments in the new year.** 4....

Florida Business Software Solutions LLC Clearwater, FL 33755

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SOUTHWARE TRAINING GUIDE

Year End Processing

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Year End Processing

Year End Processing v2016.1 of 22 Enabling Business Success through Innovation™ Created, Published and Copyright © by Florida Business Software Solutions LLC

Table of Contents

Before Processing Year End 3

Year End Timing 3

Year End Reminders & Optional Processes 3

Inventory Sales 4-5

Service Management 5

Accounts Receivable 5-7

Accounts Payable 7-13

Payroll 13-17

Cash Flow Ledger 17

Fixed Assets 17-18

General Ledger 19-22


Year End Processing


Before Year-End 1. Do your normal monthly processing. 2. Do your quarter processing if using Payroll. 3. Make a separate backup to keep permanently. Verify this backup and do not proceed

until complete.

Year End Timing

1. Year end processing should be completed for all other modules before doing year end for General Ledger. Follow the instructions specified below for each SouthWare module you have licensed. 2. Year end for General Ledger may be run after all other modules and prior to receiving final adjustments from your accountants. Some information requires GL year end in order to be accurate like ExecuMate and Cash Flow Ledger. You are allowed to make Prior Year “PY” journal entries to the GL for the prior year which carries all information forward to the current year. Year-end should be run within the first couple of weeks of January. With prior year entries, there is no reason to keep GL open for an extended period of time. 3. Only one year can be open at a time in SouthWare. If you elect to leave your year

open for several weeks you will not be able to post to the permanent ledger for the new year and produce financial statements until the prior year is closed.

The one exception to this rule is ExecuMate—information in ExecuMate does look at not-posted transactions.

Year End Reminders & Optional Processes

1. Fiscal Year vs. Calendar Year - These procedures are designed for use when fiscal and calendar year-end occurs simultaneously. When the fiscal year-end occurs in a month other than December, you will have several optional procedures. Usually the year-to-date information is kept for a fiscal year, but it may also be kept for a calendar year even if the fiscal year is different. Please contact Haruspex with any questions.

2. Reminder about spooling reports— When spooling (write to disk OR option 2), it is important to name the spool files appropriately for later retrieval & audit purposes. Plan accordingly. SouthWare uses the program name for the spool file. We recommend using that name but adding the date to the name. For example spooling the Inventory Valuation will result in a file name of RSVALRPT.SP. Use the F2 option when spooling to change the name to RSVALRPT123103.SP or SVALRPT031231.SP so that the information can be preserved.

3. All modules transactional data cleanup—Year end is a good time to review all transactional files: quotes, sales orders, service orders, purchase orders, etc. to ensure that your environment is clean and accurate. Review and remove transactions that were done in error or not posted.

4. We do not recommend purging data in any application!


Year End Processing


The following screen references will be used through out the document: Periodic Menu (i.e. Periodic / Inventory Sales / xx)

Report Menu (i.e. Report / Inventory Sales / xx)

Launch Bar (type in IS0503)

1. Inventory Sales Does not have a formal year-end process as long as you use SouthWare’s

Accounts Receivable. If you do not use SW AR you must run Periodic, Inventory Sales & IS-06-10 – Clear Other YTD Info (or IS0610).

If you do use SW AR we recommend: 1. Completing your normal month-end procedures. 2. Update Stock Order Controls (choose Periodic at the top of your menu and Inventory/Sales and Update Stock Order Controls). Or type IS0609 in launch bar.

Run an Inventory Valuation report (spooling it if desired) to record the item quantities and costs as well as valuation - choose Reports, Inventory/Sales, All Reports and Stock Valuation Report. Or type IS0503 in launch bar.

Run Stock Trial Balance (choose Reports, Inventory/Sales, All Reports & Stock Ledger Trial Balance). Or type IS0520 in launch bar.

You may optionally process and post a Physical Inventory – Periodic, Inventory Sales & IS0604xx. Or type IS0604 from launch bar.

NOTE: This process can create GL distributions based on the settings in your IS control record (Set- up/Inventory Sales/The Control Record, field 24 or IS-08-02 field 24). Please review newer options available prior to beginning a Physical Inventory. Physical Inventories should be completed prior to processing year end.


Year End Processing


Inventory Sales (screen shot)

2. Service Management

Does not have a formal year-end procedure. Due to the transactional nature of service orders this is a good time to schedule a review of open service orders to clean up old transactions. It is also a good time to review your contracts and pricing to ensure accuracy.

3. Accounts Receivable

Select year-end processing ( Periodic Processes, Accounts Receivable or AR0606) to close and clear all year-to-date accumulations. This step may be skipped if processing a fiscal year-end and you desire to track A/R information on a calendar year.

Run an Aging report (Reports, Accounts Receivable or AR0501) and Trial Balances (AR0502) and any other point in time reports prior to closing the year.


Year End Processing



Year End Processing


Accounts Receivables (screen shot)

4. Accounts Payable

There is not a year end process in Accounts Payable since the excellence history is perpetually maintained. However, there are several optional processes that may be executed at this time.


Year End Processing


Process 1099's - (Periodic Processes, Accounts Payable or AP0506). For calendar

year processing only and if you have captured 1099 data during the year for any vendors.

SouthWare can produce three formats for the 1099-MISC forms: printed forms, tape format, and diskette format. *Note: You must clear the vendor totals even if you do not print the 1099's. To do this, process “Clear the Vendor Totals” (AP050603). 1. Choose #6 – Report and Clear YTD 1099-Misc Info from the menu choices under

Periodic Processes.

2. Build the 1099 work file

Verify that you are updating to the correct year. The AP control record shows the date that the last 1099 file was updated.

Modify / Maintain Company Information if necessary by reviewing the 1099 Control Record. This is where you can change address, contact and telephone number information.

Build the 1099 work file.

If a work file already exists, you have the option to save it under a different name prior to creating a new one.


Year End Processing


(verify year)

(modify company information)


Year End Processing


(company information / 1099 Control screen)

(build work file)


Year End Processing


(rename file for archiving)

3. Review / Print a 1099-Misc Edit List. Review the work file by printing an edit list. 4. If you need to make any changes manually, you can change data by using Edit the 1099-Misc work file menu option. 5. If your data looks correct, you can clear the 1099-MISC Information (AP-05-06-

03). ** You must clear 1099-MISC information prior to doing any A/P payments in the new year.**

4. Create 1099-Misc forms. You may specify a minimum 1099-MISC amount (vendors who were paid less than this amount will not receive a 1099-MISC form). If you select the magnetic media options (options 2 or 3) you must also enter the payment year.


Year End Processing


5. A question will ask if this is a correction run. If you have already submitted 1099-MISC information and are preparing corrected information, enter "Y" and the system will mark the Corrected Return box on the forms. Otherwise, choose No. The amount box used on each form is controlled by the field number specified in the vendor record (Field 21 in AP-06-01 or Maint/Accounts Payable/Vendors): 1 = Rents 2 = Royalties 7 = Non-employee compensation F4 = Special – additional 1099 Misc Types (choices below)

6. If you are producing 1099-MISC information on tape the file name will be located in your company subdirectory and the file name will be IRSTAX. You must load this file to a magnetic tape and send the tape to the Federal Government. See the current IRS publication on 1099-MISC reporting for more information.


Year End Processing


7. If you are producing 1099-MISC information on diskette the file will be located

in your company subdirectory and the file name will be IRSTAX. You must load this file to diskette and send it to the Federal Government.

8. Forms may be ordered from www.southwareforms.com

Carbonless Non-Mailer Carbon Self-Mailer 7154—3 3-Part 2134—3 3-Part 7154—4 4-Part 2134—4 4-Part 7154—5 5-Part 2134—5 6-Part 7164—3 5-Part

Magnetic Media Mailer 2134—2 3-Part 8134—3 3-Part

9. If you have over 800 1099 vendors, a disk file named: IRSTAX.001 will be created for the first 800 vendors. The next 800 vendors will go into a file: IRSTAX.002, and so on for each additional 800 vendors.

5. Payroll Make sure you have a separate backup of your Payroll files to keep permanently

before proceeding

You are ready for year-end processing in Payroll when you have done the processing for the fourth quarter (printed 941, SUI and City tax reports and reset QTD totals.

Calendar Year-End 1. Build the W-2 work file (Periodic/Payroll/Year end or PR060201). See W-2

Documentation for more information (Payroll W2 Guide). Please review the documentation before proceeding with creating and printing W2's.

2. To ensure the accuracy of your W2 forms and magnetic media please test your

totals and files before printing and submitting your W2's by following the steps below:

3. Build the W2 workfile using the instructions from your Circular E and the PR

W2 documentation (Payroll W2 Guide)

http://www.southwareforms.com/


Year End Processing


4. Print a full-employee listing (Reports/Payroll Employee Listing or PR040901) to

include YTD Federal and State Accumulations. Include Recurring Deductions/Earnings on the report.

5. Print the W2 Edit Listing ( Periodic/Payroll/Year end or PR060202) for all

employees

6. Compare the federal and state taxable totals along with the tax amounts.

7. Print the Cumulative Deducts/Earnings Report ( Reports/Payroll/ Cumulative Deducts/Earnings or PR0405) to verify the deduction and earnings totals on the W2 edit listing match the YTD totals from the Recurring Deduction/Earnings file.

8. Print the W2’s. (Periodic / Payroll / End of Year / W2 Processing / produce W2

forms/ Magnetic Media or PR060204) If printing W2’s on a laser printer: Make sure the printer you select has the laser flag set to "Y"es in (Setup/Hardware setup/Printer Definition or XX-05-05-01 in field #7) In rev. 11 and up only you may print 4-to-a-page W2's. This is EMPLOYEE COPIES only. In this mode, you MUST PRINT 4 W2's per employee. This is exactly one page. WARNING: This form requires 8 lines per inch init string. Also the top margin should be 3/8 inches.


Year End Processing


NOTE: you may want to print an alignment test before printing the W2’s to insure the data lines up with the forms you have purchased. If the alignment is not correct, you must use init strings to change the left margin and/or the top margin (these values are the decimal representation).

• If left margin needs to move to the right less than one column (027 038 108 # 085) where # is the # of Decipoints (1/720”). • If top margin needs to move down less than one line (027 038 108 # 090) where # is the # of Decipoints (1/720”). • If left margin needs to move to right at least one column (027 038 097 # 076) where # is the number of columns. • If set the top margin: (027 038 108 # 069) where # is the number of lines. NOTE: When replacing # with a value, you should enter the number in the character set field. For example to move the left margin to the right two characters, the decimal values would be: 027, 038, 097, 050, 076. 050 is the decimal representation for 2.

9. If you are submitting W2's to the SSA, download the MMREF test software

- (ACCUWAGE) from http://www.ssa.gov/employer/software.htm and install the software. - Test the magnetic file created from SouthWare (W2REPORT) using the SSA software. The magnetic media file will be created in your SouthWare data subdirectory. - Using the AccuWage software - verify the totals record (RT record) with the totals from the W2 Edit Listing.

Reset the YTD totals (Periodic/PayRoll/Year End/ Reset Calender Fiscal YTD Totals

or PR0603) 1. This option should be done before a payroll is run for the new year.

2. You will be asked to reset YTD information used for tax reporting

(Calendar Year). Fiscal Year-End Note: You are also asked about clearing YTD fiscal information. If your company is not on a calendar year, you should not reset fiscal information until the end of your fiscal year. If you answer Y to the YTD question, the program will ask if you want to clear sick leave due, vacation due, and holiday due fields in the employee file.

3. You also have the option to clear labor distribution YTD.

4. The appropriate YTD reset date will update in the control record


Year End Processing


(Payroll screen shot)

**** NOTEWORTHY*** Recurring Deductions/Earnings: The calendar or fiscal accumulations will be cleared according to the answers to the clear questions. In addition, during the calendar year end, records which were set to inactive status by the system because the YTD limit was reached will be re-activated automatically. Any remaining inactive records should be deleted using the Maintain Recurring Deductions/Earnings. If you have any recurring records in which you set the "Reset YTD?" flag to N, these will not be cleared during the calendar year reset. They will also not be reactivated. You must manually reset these records if needed. Do not rebuild your W-2 workfile once you have cleared YTD information. The work-file can't be built properly without the YTD data. If you accidentally rebuild the workfile you will either have to:

• Restore from a backup prior to when Year-End Clear was done and rebuild the workfile. • Or restore your W-2 work files (PW2F3.FIL and PW2F5.FIL) from backup.

Check to make sure you have the correct FICA tax rates in the Payroll control file before you process your first year payroll checks. (PR0802 or Setup/Payroll/Company Control Info).


Year End Processing


Make sure to update your Federal and State tax table from the latest circular e.

- Payroll portal / File Maintenance

6. Cash Flow Ledger Although there is no specific year end processing for this module it is recommended

that you ensure that your monthly bank reconciliations are current prior to closing the year in General Ledger. Reconciling the bank account is a good audit that all transactions were properly recorded in Accounts Receivable and Accounts Payable.

7. Fixed Assets Fixed Assets Year End Processing (Periodic / Fixed Assts / Year End Processing or

FA-03-03). For this program will update the beginning of year information into the asset file. For all schedules including 1, it will update the last year-end fields in the schedule file.

Close each schedule one at a time by entering the last year closed date and the date to close through. This will prevent these depreciation records from ever being computed again. The “Accumulated Depreciation Beginning of Year” fields will be


Year End Processing


rolled forward for each asset record. (If you do not interface to GL you do not need to run this process.)


Year End Processing


8. General Ledger

Year-end Processing (Periodic/General Ledger/Year End or GL06). This option lets you close out the current year and prepare the records for the New Year. All other applications should be closed before closing GL. You may continue processing in the new year as well as making prior year adjustments as “PY” types.

Closing GL is the final step in the year end process—NOTE: Prior to running year end you must set up at least one capital account for retained earnings. You must set up an account per profit center if you choose to distribute the profit.

Make year-end adjustments (Periodic/General Ledger/Year End or GL0601). This lets you make any final G/L adjustments and/or accruals for the year before you close. You don’t need to transfer net income to retained earnings or zero out the income and expense accounts-- this will be done automatically by the system. (If you finish all the year-end processing and then discover you need to make additional adjustments to the year, you may still adjust the prior year using a “PY” transaction type.)

Close out your last fiscal period (Periodic/General Ledger/Year End or GL0602). If you entered year-end entries these must be posted in the last period. This is the same process as month-end G/L close.


Year End Processing


Print Financial Statements (Periodic/General Ledger/Year End or GL0603). You should have run when the period was closed, but if you made more adjustments since then you will want to run your statements again. After the year-end process, you may print prior year statements from your comparative information if you need more copies. Any budgets for the year will have already been cleared.

Note: navigate to Setup – GL – Control Record (or GL0801) and record the last Journal Entry number prior to closing.


Year End Processing


Run the Year-end Program (Periodic/General Ledger/Year End or GL0604) The year-end program performs the following functions: 1. Transfers net profit and loss to retained earnings and clears all the balances in the

income statement accounts.

2. Carries all account balance records forward as comparatives, moves the ending balance for all balance sheet accounts forward as beginning balances, and clears out the current year fields.

3. Resets all the year periods (Next Year becomes Current Year; Current Year becomes Last Year, etc.) The next year periods are created by incrementing the period dates for the new current year by one.

4. Resets the next transaction number in the control record to 1. (You should reset this value to the last number you noted at the start of the program!)

5. Optionally zeroes out or updates the original and current budgets for the New Year.

6. Purge transaction history (Periodic/General Ledger/Year End or GL0605). This selection is a part of the year-end process but we DO NOT recommend you purge data, please contact Haruspex with questions..


Year End Processing


Prior Year transactions may be made after you have closed the year to affect last years in formation. The date you enter must be in the prior fiscal year. Posting this type of transaction will update prior-year balances (in the account file) through the end of the year and the beginning balances for the current year. If the adjusted account is a Balance Sheet account, the transaction will affect the beginning balance of the current fiscal year. If the adjusted account is an Income Statement account, the transaction will affect the beginning balance of the Retained Earnings account defined in the control record (GL-08-01). In either case the adjustment of balances will be reflected in any closed periods in the current fiscal year. If you make a prior-year adjustment, you should re-run financial statements for any affected periods.

Example of a PY entry: Forgot to post cash sales of $100.00 from November of 2005, and you are now in February of 2006 (and you use a calendar fiscal year).

Cash Account 1010-000 Sales Account 4010-000 Retained Earnings 3040-000

In GL-01-01, enter a "PY" type transaction using a date of 11-30-2005. (If you don't enter a transaction type of "PY", the entry program will not allow a date outside the current fiscal year).

Debit 1010-000 for $100.00 and Credit 4010-000 for $100.00.

When you post this transaction (GL-01-03), the balance for the cash account will be increased by $100.00 for periods 11 and 12 of the prior year and also for periods 1 and 2 of the current year. The Sales Account will be increased by $100.00 for periods 11 and 12 of the prior year only and the retained earnings account balance (3040-000) will be increased by $100.00.

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